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                                        As filed with the Securities and Exchange Commission on April 20, 2004
                                                                                                                                             Registration No. 333-111289


                           SECURITIES AND EXCHANGE COMMISSION
                                                                     Washington, DC 20549

                                                                    AMENDMENT NO. 3
                                                                         TO
                                                      FORM S-1
                                               REGISTRATION STATEMENT
                                                                            Under
                                                                   The Securities Act of 1933


                                                         salesforce.com, inc.
                                                             (Exact name of Registrant as specified in its charter)




                     Delaware                                                         7372                                                    94-3320693
             (State or other jurisdiction of                              (Primary Standard Industrial                                        (I.R.S. Employer
            incorporation or organization)                                 Classification Code number)                                       Identification No.)

                                                            The Landmark @ One Market, Suite 300
                                                                San Francisco, California 94105
                                                                        (415) 901-7000
                              (Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)




                                                                         Marc Benioff
                                                             Chairman and Chief Executive Officer
                                                                      salesforce.com, inc.
                                                            The Landmark @ One Market, Suite 300
                                                                San Francisco, California 94105
                                                                        (415) 901-7000
                                      (Name, address, including zip code, and telephone number, including area code, of agent for service)




                                                                                 Copies to:

         Gregory M. Gallo, Esq.                                       David Schellhase, Esq.                                        Gordon K. Davidson, Esq.
           Peter M. Astiz, Esq.                                 Vice President and General Counsel                                   Jeffrey R. Vetter, Esq.
          David A. Hubb, Esq.                                           salesforce.com, inc.                                         Fenwick & West LLP
   Gray Cary Ware & Freidenrich LLP                               The Landmark @ One Market,                                          Silicon Valley Center
         2000 University Avenue                                               Suite 300                                               801 California Street
     East Palo Alto, CA 94303-2248                                   San Francisco, CA 94105                                        Mountain View, CA 94041
             (650) 833-2000                                                (415) 901-7000                                                 (650) 988-8500



    Approximate date of commencement of proposed sale to the public:                              As soon as practicable after the Registration Statement becomes
effective.
    If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act, check the following box. 
    If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following
box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. 
    If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective registration statement number for the same offering. 
    If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective registration statement for the same offering. 
    If delivery of the Prospectus is expected to be made pursuant to Rule 434, check the following box. 



    The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date
until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become
effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.
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The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities
and Exchange Commission is effective. This prospectus is not an offer to sell these securities and we are not soliciting offers to buy these securities in any
jurisdiction where the offer or sale is not permitted.

PROSPECTUS (Subject to Completion)
Issued April 20, 2004

                                                              10,000,000 Shares




                                                                    COMMON STOCK



Salesforce.com, inc. is offering shares of its common stock. This is our initial public offering and no public market currently exists for our
shares. We anticipate that the initial public offering price will be between $7.50 and $8.50 per share.



We have applied to list our common stock on the New York Stock Exchange under the symbol “CRM.”




Investing in our common stock involves risks. See “ Risk Factors ” beginning on page 5.



                                                                 PRICE $             A SHARE



                                                                                                                   Underwriting
                                                                                        Price to                   Discounts and                    Proceeds to
                                                                                        Public                     Commissions                    salesforce.com

Per Share                                                                                       $                             $                              $
Total                                                                                       $                             $                              $

We have granted the underwriters the right to purchase up to an additional 1,500,000 shares of common stock to cover over-allotments.

The Securities and Exchange Commission and state securities regulators have not approved or disapproved these securities, or determined if
this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

Morgan Stanley & Co. Incorporated expects to deliver the shares to purchasers on                            , 2004.




MORGAN STANLEY
  DEUTSCHE BANK SECURITIES
     UBS INVESTMENT BANK
        WACHOVIA SECURITIES
         WILLIAM BLAIR & COMPANY
, 2004
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                                                         TABLE OF CONTENTS
                                                                                                                                       Page

Prospectus Summary                                                                                                                           1
Risk Factors                                                                                                                                 5
Special Note Regarding Forward-Looking Statements                                                                                           18
Use of Proceeds                                                                                                                             19
Dividend Policy                                                                                                                             19
Capitalization                                                                                                                              20
Dilution                                                                                                                                    21
Selected Consolidated Financial Data                                                                                                        23
Management’s Discussion and Analysis of Financial Condition and Results of Operations                                                       25
Business                                                                                                                                    42
                                                                                                                                      Page

Management                                                                                                                                   56
Certain Relationships and Related Party Transactions                                                                                         70
Principal Stockholders                                                                                                                       73
Description of Capital Stock                                                                                                                 75
Shares Eligible for Future Sale                                                                                                              79
Underwriters                                                                                                                                 81
Legal Matters                                                                                                                                84
Experts                                                                                                                                      84
Change in Independent Accountants                                                                                                            84
Where You Can Find Additional Information                                                                                                    85
Index to Consolidated Financial Statements                                                                                                  F-1



      You should rely only on the information contained in this prospectus. We have not authorized anyone to provide you with information
different from that contained in this prospectus. We are offering to sell, and seeking offers to buy, shares of our common stock only in
jurisdictions where offers and sales are permitted. The information contained in this prospectus is accurate only as of the date of this
prospectus, regardless of the time of delivery of this prospectus or any sale of our common stock.

     Until         , 2004 (25 days after the commencement of this offering), all dealers that buy, sell or trade shares of our common
stock, whether or not participating in this offering, may be required to deliver a prospectus. This delivery requirement is in addition to
the obligation of dealers to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or
subscriptions.


                                                                     (i)
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                                                          PROSPECTUS SUMMARY

      You should read the following summary together with the entire prospectus, including the more detailed information in our consolidated
financial statements and related notes appearing elsewhere in this prospectus. You should carefully consider, among other things, the matters
discussed in “Risk Factors.”

                                                         SALESFORCE.COM, INC.

      Salesforce.com is the leading provider, based on market share, of application services that allow organizations to easily share customer
information on demand, according to a March 2004 report by Forrester Research, Inc. We provide a comprehensive customer relationship
management, or CRM, service to businesses of all sizes and industries worldwide. By designing and developing our service to be a low-cost,
easy-to-use application that is delivered through a standard Web browser, we substantially reduce many of the traditional expenses and
complexities of enterprise software implementations. As a result, our customers incur less risk and lower upfront costs. Our service helps
customers more effectively manage critical operations including: sales force automation; customer service and support; marketing automation;
document management; analytics; and custom application development. We market our services on a subscription basis, primarily through our
direct sales efforts and also indirectly through partners. From the introduction of our service in February 2000 through January 31, 2004, our
customer base had grown to approximately 8,700, and these customers had purchased an aggregate of over 127,000 paying subscriptions for
use by their employees and other customer-authorized users in approximately 70 countries.

      The pervasiveness of the Internet, along with the dramatic declines in the pricing of computing technology and network bandwidth, have
enabled a new generation of enterprise computing in which substantial components of information technology, or IT, infrastructure can be
provisioned and delivered dynamically on an outsourced basis. This new computing paradigm is sometimes referred to as utility computing,
while the outsourced software applications are referred to as on-demand application services. On-demand application services enable
businesses to subscribe to a wide variety of application services that are developed specifically for, and delivered over, the Internet on an
as-needed basis with little or no implementation services required and without the need to install and manage third-party software in-house.
The market for on-demand application services is projected to grow from $425 million in 2002 to $2.6 billion in 2007, which represents a
compounded annual growth rate of 44 percent, according to a May 2003 report by International Data Corporation, or IDC, an independent
market research firm.

      We believe that the CRM applications market, which was approximately $7.1 billion in 2002 according to a July 2003 report by IDC, is
one of the first to benefit from on-demand application services. CRM applications are intended to enable businesses to automate sales,
customer service and support and marketing. Despite the significant potential benefits that can be attained from CRM, many enterprises have
failed to successfully deploy the CRM applications that they have purchased for a variety of reasons including the difficulty and relatively high
cost of implementing and maintaining enterprise applications, as well as the historically low rates of user adoption and lack of ubiquitous
access that have contributed to lower returns on investment in CRM deployments.

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     From inception, our service has been specifically designed to provide customers with robust CRM solutions on an outsourced basis
through our proprietary, scalable and secure multi-tenant application architecture. Key benefits of our solution include:

            Rapid deployment. Our service can be deployed rapidly and provisioned easily, since our customers do not have to spend time
             installing or maintaining the servers, networking equipment, security products or other infrastructure hardware and software
             necessary to ensure a scalable and reliable service.

            Enable high levels of user adoption. We have designed our service to be easy-to-use and intuitive. Since our service contains
             many tools and features recognizable to users of popular websites such as those of Amazon.com, eBay and Yahoo!, it has a more
             familiar interface than typical CRM applications. As a result, our users do not require substantial training on how to use and benefit
             from our service.

            Lower total cost of ownership. We enable customers to achieve significant savings relative to the traditional enterprise software
             model. Our service enables customers to automate sales, customer service and support and marketing processes without having to
             make large and risky upfront investments in software, hardware and implementation services and additional IT staff.

            Extensive features, functionality and configurability. We offer a comprehensive array of CRM capabilities across sales,
             customer service and support and marketing that meet the needs of businesses of any size. We also enable customers to tailor
             important characteristics of our service to meet their unique requirements without the use of significant IT resources.

            Secure, scalable and reliable delivery platform. We built and maintain a multi-tenant application architecture that has been
             designed to enable our service to scale securely, reliably and cost-effectively to tens of thousands of customers and millions of
             users.

            Ease of integration. We have developed a set of application programming interfaces, or APIs, which we provide on a platform
             we call sforce, that enable customers and independent developers to integrate our service with existing third-party, custom and
             legacy applications and write their own application services that integrate with our service.

      Our objective is to be the leading provider of application services for businesses worldwide. To achieve this objective we intend to:

            continue to lead the industry transformation to on-demand application services;

            strengthen and extend our service offering;

            pursue new customers and new territories aggressively;

            deepen relationships with our existing customer base; and

            encourage the development of third-party applications on our sforce platform.

      We were incorporated in Delaware in February 1999. During our limited history of operations, we have incurred significant losses and
had negative cash flow from operations in fiscal quarters from our inception through fiscal 2003. As of January 31, 2004, we had an
accumulated deficit of $71.9 million. The address of our principal executive office is The Landmark @ One Market, Suite 300, San Francisco,
California 94105 and our telephone number is (415) 901-7000. Our website address is www.salesforce.com. The information on, or that can be
accessed through, our website is not part of this prospectus.

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                                                                    THE OFFERING

Common stock offered                                                          10,000,000 shares
Common stock to be outstanding after this offering                            99,554,971 shares
Use of proceeds                                                               We expect to use the net proceeds for general corporate purposes,
                                                                              including working capital and capital expenditures. We may also
                                                                              use a portion of the net proceeds to fund possible investments in,
                                                                              or acquisitions of, complementary businesses, services or
                                                                              technologies. See ―Use of Proceeds.‖
Proposed NYSE symbol                                                          CRM

     The number of shares to be outstanding immediately after the offering is based on 89,554,971 shares of common stock outstanding as of
January 31, 2004, which assumes the conversion of all of our outstanding shares of our convertible preferred stock into 58,024,345 shares of
common stock, and excludes:

            15,928,395 shares of common stock issuable upon the exercise of options outstanding as of January 31, 2004, with exercise prices
             ranging from $0.02 to $8.00 per share and a weighted average exercise price of $2.29 per share;

            4,000,000 shares of common stock to be available for issuance under our 2004 Equity Incentive Plan, 1,000,000 shares of common
             stock to be available for issuance under our 2004 Outside Directors Stock Plan and 1,000,000 shares of common stock to be
             available for issuance under our 2004 Employee Stock Purchase Plan, each plan to be effective upon completion of the offering;

            1,299,496 shares of common stock issuable upon the exercise of warrants outstanding as of January 31, 2004, with exercise prices
             ranging from $1.10 to $3.89 per share and a weighted average exercise price of $2.43 per share; and

            2,889,379 shares of common stock reserved for future grants under our 1999 Stock Option Plan as of January 31, 2004.

      Except as otherwise indicated, all information contained in this prospectus assumes:

            an initial public offering price of $8.00 per share;

            the automatic conversion of all outstanding shares of our convertible preferred stock into 58,024,345 shares of common stock upon
             the closing of this offering;

            that the underwriters do not exercise their over-allotment option; and

            the filing of our amended and restated certificate of incorporation following the conversion of our convertible preferred stock.

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                                           SUMMARY CONSOLIDATED FINANCIAL DATA

      The following tables provide summary consolidated financial data and should be read in conjunction with ―Management’s Discussion and
Analysis of Financial Condition and Results of Operations‖ and our consolidated financial statements and related notes appearing elsewhere in
this prospectus.
                                                                                                            Fiscal Year Ended January 31,

                                                                                              2002,                        2003,
                                                                                           As Restated                  As Restated                    2004

                                                                                                         (in thousands, except per share data)
Consolidated Statement of Operations Data:
Revenues                                                                                  $      22,409                 $      50,991              $ 96,023
(Loss) income from operations (1)                                                               (29,525 )                     (10,500 )               3,718
Net (loss) income (1)                                                                           (28,609 )                      (9,716 )               3,514
Net (loss) income per share:
  Basic                                                                                   $       (1.36 )               $       (0.37 )            $      0.12
  Diluted                                                                                         (1.36 )                       (0.37 )                   0.04
  Pro forma (unaudited)                                                                                                                                   0.04
Weighted-average shares used in computing per share amounts:
 Basic (2)                                                                                      21,039                         26,375                  29,605
 Diluted (2)                                                                                    21,039                         26,375                  95,409
 Pro forma (unaudited) (2)                                                                                                                             95,409

(1)   Loss from operations and net loss for fiscal 2002 include a $7.7 million non-cash charge for office space that we abandoned in fiscal
      2002. Income from operations and net income for fiscal 2004 include non-cash income of $3.4 million associated with the net reduction
      in accruals associated with the office space that we abandoned.

(2)   For information regarding the computation of per share amounts, refer to notes 1 and 10 of the notes to our consolidated financial
      statements.

      The pro forma per share amounts in the consolidated statement of operations data table above give effect to the automatic conversion of
all outstanding shares of our convertible preferred stock into common stock upon the closing of this offering.

     See note 1 of the notes to our consolidated financial statements and Management’s Discussion and Analysis of Financial Condition and
Results of Operations—Quarterly Results of Operations for a discussion of the restatement of our fiscal 2002 and fiscal 2003 results.
                                                                                                               As of January 31, 2004

                                                                                                                             Pro                 Pro Forma
                                                                                               Actual                       Forma                As Adjusted

                                                                                                                                 (unaudited)
                                                                                                                   (in thousands)
Consolidated Balance Sheet Data:
Cash, cash equivalents and short-term marketable securities                                $    35,812              $        35,812          $      106,512
Working capital                                                                                  4,140                        4,140                  74,840
Total assets                                                                                    87,511                       87,511                 158,211
Convertible preferred stock                                                                     61,137                           —                       —
Accumulated deficit                                                                            (71,934 )                    (71,934 )               (71,934 )
Total stockholders’ (deficit) equity                                                           (46,237 )                     14,900                  85,600

      The pro forma column of the consolidated balance sheet data table above reflects the automatic conversion of all outstanding shares of
our convertible preferred stock into common stock upon the closing of this offering. The pro forma as adjusted column in the consolidated
balance sheet data table above reflects the sale of 10,000,000 shares of our common stock in this offering at an assumed initial public offering
price of $8.00 per share, resulting in estimated net proceeds of $70.7 million after deducting estimated underwriting discounts and commissions
and estimated offering expenses payable by us.

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                                                                RISK FACTORS

       Investing in our common stock involves a high degree of risk. You should carefully consider the following risk factors, as well as the
other information in this prospectus, before deciding whether to invest in shares of our common stock. If any of the following risks actually
occurs, our business, financial condition and results of operations would suffer. In this case, the trading price of our common stock would
likely decline and you might lose all or part of your investment in our common stock. The risks described below are not the only ones we face.
Additional risks that we currently do not know about or that we currently believe to be immaterial may also impair our business operations.

Risks Related to Our Business and Industry

      We are an early-stage company in an emerging market with an unproven business model, a new and unproven enterprise technology
model and a short operating history, which makes it difficult to evaluate our current business and future prospects and may increase the
risk of your investment.

      We have only a limited operating history and our current business and future prospects are difficult to evaluate. We were founded in
February 1999 and began offering our on-demand CRM application service in February 2000. You must consider our business and prospects in
light of the risks and difficulties we encounter as an early-stage company in the new and rapidly evolving market of on-demand CRM
application services. These risks and difficulties include the following:

            our new and unproven business and technology models;

            a limited number of service offerings and risks associated with developing new service offerings; and

            the difficulties we face in managing rapid growth in personnel and operations.

      We may not be able to successfully address any of these risks or others, including the other risks related to our business and industry
described below. Failure to adequately do so could seriously harm our business and cause our operating results to suffer.

      We have incurred significant operating losses in the past and may incur significant operating losses in the future.

      We incurred significant losses in each fiscal quarter from our inception in February 1999 through fiscal 2003 and we may incur
significant operating losses in the future. Our business does not have an established record of profitability and we may not continue to be
profitable. In addition, we expect our operating expenses to increase in the future as we expand our operations. If our revenue does not grow to
offset these expected increased expenses, we will not continue to be profitable. You should not consider recent quarterly revenue growth as
indicative of our future performance. In fact, in future quarters we may not have any revenue growth, and our revenue could decline.
Furthermore, if our operating expenses exceed our expectations, our financial performance will be adversely affected.

     If we experience significant fluctuations in our operating results and rate of growth and fail to meet revenue and earnings
expectations, our stock price may fall rapidly and without advance notice.

      Due to our limited operating history, our evolving business model and the unpredictability of our emerging industry, we may not be able
to accurately forecast our rate of growth. For example, in the last two fiscal years, we have recorded quarterly operating income of as much as
$4.3 million and quarterly operating losses of as much as $4.9 million. We base our current and future expense levels and our investment plans
on estimates of future revenue and future rate of growth. Our expenses and investments are, to a large extent, fixed and we

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expect that these expenses will increase in the future. We may not be able to adjust our spending quickly enough if our revenue falls short of
our expectations.

      As a result, we expect that our operating results may fluctuate significantly on a quarterly basis. Revenue growth may not be sustainable
and may decrease in the future. We believe that period-to-period comparisons of our operating results may not be meaningful, and you should
not rely upon them as an indication of future performance.

     Interruptions or delays in service from our third-party Web hosting facility could impair the delivery of our service and harm our
business.

      We provide our service through computer hardware that is currently located in a third-party Web hosting facility in Sunnyvale, California
operated by Qwest Communications International Inc. We do not control the operation of this facility, and it is subject to damage or
interruption from earthquakes, floods, fires, power loss, telecommunications failures and similar events. It is also subject to break-ins, sabotage,
intentional acts of vandalism and similar misconduct. Despite precautions taken at the facility, the occurrence of a natural disaster, a decision to
close the facility without adequate notice or other unanticipated problems at the facility could result in lengthy interruptions in our service. In
addition, the failure by the Qwest facility to provide our required data communications capacity could result in interruptions in our service. We
have an agreement with SunGard Data Systems, a provider of availability services, to provide access to a geographically remote disaster
recovery facility that would provide us access to hardware, software and Internet connectivity in the event the Qwest facility becomes
unavailable. Even with this disaster recovery arrangement, however, our service would be interrupted during the transition. We are in the
process of obtaining additional rapid recovery services from another third-party vendor. However, we do not expect to have this arrangement in
place before July 2004 at the earliest. Any damage to, or failure of, our systems could result in interruptions in our service. Interruptions in our
service may reduce our revenue, cause us to issue credits or pay penalties, cause customers to terminate their subscriptions and adversely affect
our renewal rates. Our business will be harmed if our customers and potential customers believe our service is unreliable.

     If our security measures are breached and unauthorized access is obtained to a customer’s data, our service may be perceived as not
being secure and customers may curtail or stop using our service.

      Our service involves the storage and transmission of customers’ proprietary information, and security breaches could expose us to a risk
of loss of this information, litigation and possible liability. If our security measures are breached as a result of third-party action, employee
error, malfeasance or otherwise, and, as a result, someone obtains unauthorized access to one of our customers’ data, our reputation will be
damaged, our business may suffer and we could incur significant liability. Because techniques used to obtain unauthorized access or to
sabotage systems change frequently and generally are not recognized until launched against a target, we may be unable to anticipate these
techniques or to implement adequate preventative measures. If an actual or perceived breach of our security occurs, the market perception of
the effectiveness of our security measures could be harmed and we could lose sales and customers.

      If our on-demand application service is not widely accepted, our operating results will be harmed.

      Historically, we have derived substantially all of our revenue from subscriptions to our on-demand application service, and we expect this
will continue for the foreseeable future. As a result, widespread acceptance of our service is critical to our future success. Factors that may
affect market acceptance of our service include:

            potential reluctance by enterprises to migrate to an on-demand application service;

            the price and performance of our service;

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            the level of customization we can offer;

            the availability, performance and price of competing products and services; and

            potential reluctance by enterprises to trust third parties to store and manage their internal data.

     Many of these factors are beyond our control. The inability of our service to achieve widespread market acceptance would harm our
business.

     The market for our technology delivery model and on-demand application services is immature and volatile, and if it does not develop
or develops more slowly than we expect, our business will be harmed.

      The market for on-demand application services is new and unproven, and it is uncertain whether these services will achieve 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 on-demand application services in general and for CRM, in particular. Many enterprises have invested substantial
personnel and financial resources to integrate traditional enterprise software into their businesses, and therefore may be reluctant or unwilling
to migrate to on-demand application services. Furthermore, some enterprises may be reluctant or unwilling to use on-demand application
services because they have concerns regarding the risks associated with security capabilities, among other things, of the technology delivery
model associated with these services. If enterprises do not perceive the benefits of on-demand application services, then the market for these
services may not develop at all, or it may develop more slowly than we expect, either of which would significantly adversely affect our
operating results. In addition, as a new company in this unproven market, we have limited insight into trends that may develop and affect our
business. We may make errors in predicting and reacting to relevant business trends, which could harm our business.

     Because we recognize revenue from subscriptions for our service over the term of the subscription, downturns or upturns in sales may
not be immediately reflected in our operating results.

      We recognize revenue from customers monthly over the terms of their subscription agreements, which are typically 12 to 24 months,
although terms can range from one to 60 months. As a result, much of the revenue we report in each quarter is deferred revenue from
subscription agreements entered into during previous quarters. Consequently, a decline in new or renewed subscriptions in any one quarter will
not necessarily be fully reflected in the revenue in that quarter and will negatively affect our revenue in future quarters. In addition, we may be
unable to adjust our cost structure to reflect these reduced revenues. Accordingly, the effect of significant downturns in sales and market
acceptance of our service may not be fully reflected in our results of operations until future periods. Our subscription model also makes it
difficult for us to rapidly increase our revenue through additional sales in any period, as revenue from new customers must be recognized over
the applicable subscription term.

      We do not have an adequate history with our subscription model to predict the rate of customer subscription renewals and the impact
these renewals will have on our revenue or operating results.

       Our customers have no obligation to renew their subscriptions for our service after the expiration of the initial subscription period and in
fact, some customers have elected not to do so. In addition, our customers may renew for a lower priced edition of our service or for fewer
users. We have limited historical data with respect to rates of customer subscription renewals, so we cannot accurately predict customer
renewal rates. Our customers’ renewal rates may decline or fluctuate as a result of a number of factors, including their dissatisfaction with our
service and their ability to continue their operations and spending levels. If our customers do not renew their subscriptions for our service, our
revenue may decline and our business will suffer.

     Our future success also depends in part on our ability to sell additional features or enhanced editions of our service to our current
customers. This may require increasingly sophisticated and costly sales efforts that are targeted at senior management. If these efforts are not
successful, our business may suffer.

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     We derive a significant portion of our revenue from small businesses, which have a greater rate of attrition and non-renewal than
medium-sized and large enterprise customers.

       Our small business customers, which we consider to be companies with fewer than 200 employees, typically have shorter initial
subscription periods and, based on our limited experience to date, have had a higher rate of attrition and non-renewal as compared to our
medium-sized and large enterprise customers. We estimate that sales to small businesses were approximately 40 percent of our revenue during
fiscal 2004. If we cannot replace our small business customers that do not renew their subscriptions for our service with new customers quickly
enough, our revenue could decline.

      Our limited operating history may impede acceptance of our service by medium-sized and large customers.

       Our ability to increase revenue and maintain profitability depends, in large part, on widespread acceptance of our service by
medium-sized and large businesses. Our efforts to sell to these customers may not continue to be successful. In particular, because we are a
relatively new company with a limited operating history, these target customers may have concerns regarding our viability and may prefer to
purchase critical CRM applications from one of our larger, more established competitors. Even if we are able to sell our service to these types
of customers, they may insist on additional assurances from us that we will be able to provide adequate levels of service, which could harm our
business.

      The market for our service may be limited if prospective customers, particularly large customers, require customized features or
functions that we do not currently intend to provide in our service or that would be difficult for individual customers to customize within
our service.

     Prospective customers, especially large enterprise customers, may require heavily customized features and functions unique to their
business processes. If prospective customers require customized features or functions that we do not offer, and that would be difficult for them
to implement themselves, then the market for our service will be more limited and our business could suffer.

     As more of our sales efforts are targeted at larger enterprise customers, our sales cycle may become more time-consuming and
expensive, potentially diverting resources and harming our business.

      As we target more of our sales efforts at larger enterprise customers, we will face greater costs, longer sales cycles and less predictability
in completing some of our sales. In this market segment, the customer’s decision to use our service may be an enterprise-wide decision and, if
so, these types of sales would require us to provide greater levels of education to prospective customers regarding the use and benefits of our
service. In addition, larger customers may demand more customization, integration services and features. As a result of these factors, these
sales opportunities may require us to devote greater sales support and professional services resources to individual sales, driving up costs and
time required to complete sales and diverting sales and professional services resources to a smaller number of larger transactions.

    The market in which we participate is intensely competitive, and if we do not compete effectively, our operating results could be
harmed.

      The market for CRM applications is intensely competitive and rapidly changing, barriers to entry are relatively low, many of our
competitors are larger and have more resources than we do, and with the introduction of new technologies and market entrants, we expect
competition to intensify in the future. If we fail to compete effectively, our operating results will be harmed. Some of our principal competitors
offer their products at a lower price, which has resulted in pricing pressures. If we are unable to maintain our current pricing, our operating
results could be negatively impacted. In addition, pricing pressures and increased competition generally could result in reduced sales, reduced
margins or the failure of our service to achieve or maintain more widespread market acceptance, any of which could harm our business.

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      Our current principal competitors include:

            enterprise software application vendors including Amdocs Limited, E.piphany, Inc., IBM Corporation, Microsoft Corporation,
             Oracle Corporation, PeopleSoft, Inc. SAP AG and Siebel Systems, Inc.;

            packaged CRM software vendors, some of whom offer hosted services, such as BMC Software Corporation, FrontRange
             Solutions, Inc., Onyx Software Corp., Pivotal Corporation, which has signed an agreement to be acquired by CDC Software
             Corporation, a subsidiary of chinadotcom corporation, and Sage Group plc;

            on-demand CRM application service providers such as NetSuite, Inc., RightNow Technologies, Inc. and Salesnet, Inc.; and

            enterprise application service providers including British Telecom, Corio, Inc. and IBM.

      In addition, we face competition from businesses that develop their own CRM applications internally, as well as from enterprise software
vendors and online service providers who may develop and/or bundle CRM products with their products in the future. We also face
competition from some of our larger and more established competitors who historically have been packaged CRM software vendors, but who
are developing directly competitive on-demand CRM application services offerings, such as Siebel Systems through Siebel CRM OnDemand
and through its acquisition of Upshot Corporation. Our professional services organization competes with a broad range of large systems
integrators, including Accenture Ltd., BearingPoint, Inc. and IBM, as well as smaller independent consulting firms specializing in CRM
implementations. We have relationships with many of these consulting companies and frequently work cooperatively on projects with them,
even as we compete for business in other customer engagements.

      Many of our potential competitors enjoy substantial competitive advantages, such as greater name recognition, longer operating histories,
larger marketing budgets as well as substantially greater financial, technical and other resources. In addition, many of our potential competitors
have established marketing relationships and access to larger customer bases, and have major distribution agreements with consultants, system
integrators and resellers.

       As a result, our competitors may be able to respond more quickly and effectively than we can to new or changing opportunities,
technologies, standards or customer requirements. Furthermore, because of these advantages, even if our service is more effective than the
products that our competitors offer, potential customers might accept competitive products and services in lieu of purchasing our service. For
all of these reasons, we may not be able to compete successfully against our current and future competitors.

     We may not be able to develop enhancements and new features to our existing service or acceptable new services that keep pace with
technological developments.

      If we are unable to develop enhancements to and new features for our existing service or acceptable new services that keep pace with
rapid technological developments, our business will be harmed. The success of enhancements, new features and services depends on several
factors, including 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 will need to continuously modify and enhance our service to keep pace with changes in Internet-related hardware,
software, communication, browser and database technologies. We may not be successful in either developing these modifications and
enhancements or in timely bringing them to market. Furthermore, uncertainties about the timing and nature of new network platforms or
technologies, or modifications to existing platforms or technologies, could increase our research and development expenses. Any failure of our
service to operate effectively with future network platforms and technologies could reduce the demand for our service, result in customer
dissatisfaction and harm our business.

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      Any efforts we may make in the future to expand our service beyond the CRM market may not succeed.

      To date, we have focused our business on providing on-demand application services for the CRM market, but we may in the future seek
to expand into other markets. However, any efforts to expand beyond the CRM market may never result in significant revenue growth for us. In
addition, efforts to expand our on-demand application service beyond the CRM market may divert management resources from existing
operations and require us to commit significant financial resources to an unproven business, which may harm our business.

      If we fail to develop our brand cost-effectively, our business may suffer.

       We believe that developing and maintaining awareness of the salesforce.com brand in a cost-effective manner is critical to achieving
widespread acceptance of our existing and future services and is an important element in attracting new customers. Furthermore, we believe
that the importance of brand recognition will increase as competition in our market develops. Successful promotion of our brand will depend
largely on the effectiveness of our marketing efforts and on our ability to provide reliable and useful services at competitive prices. In the past,
our efforts to build our brand have involved significant expense. Brand promotion activities may not yield increased revenue, and even if they
do, any increased revenue may not offset the expenses we incurred in building our brand. If we fail to successfully promote and maintain our
brand, or incur substantial expenses in an unsuccessful attempt to promote and maintain our brand, we may fail to attract enough new
customers or retain our existing customers to the extent necessary to realize a sufficient return on our brand-building efforts, and our business
could suffer.

      Any failure to adequately expand our direct sales force will impede our growth.

      We expect to be substantially dependent on our direct sales force to obtain new customers, particularly large enterprise customers, and to
manage our customer base. We believe that there is significant competition for direct sales personnel with the advanced sales skills and
technical knowledge we need. Our ability to achieve significant growth in revenue in the future will depend, in large part, on our success in
recruiting, training and retaining sufficient direct sales personnel. New hires require significant training and may, in some cases, take more than
a year before they achieve full productivity. Our recent hires and planned hires may not become as productive as we would like, and we may be
unable to hire sufficient numbers of qualified individuals in the future in the markets where we do business. If we are unable to hire and
develop sufficient numbers of productive sales personnel, sales of our service will suffer.

      Sales to customers outside the United States expose us to risks inherent in international sales.

      Because we sell our service throughout the world, we are subject to risks and challenges that we would otherwise not face if we
conducted our business only in the United States. For example, sales in Europe and Asia Pacific represented approximately 14 percent and 18
percent of our total revenue in fiscal 2003 and fiscal 2004, respectively, and we intend to expand our international sales efforts. The risks and
challenges associated with sales to customers outside the United States include:

            localization of our service, including translation into foreign languages and associated expenses;

            laws and business practices favoring local competitors;

            compliance with multiple, conflicting and changing governmental laws and regulations, including employment, tax, privacy and
             data protection laws and regulations;

            foreign currency fluctuations;

            different pricing environments;

            difficulties in staffing and managing foreign operations;

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            longer accounts receivable payment cycles and other collection difficulties; and

            regional economic and political conditions.

      Some of our international subscription fees are currently denominated in U.S. dollars and paid in local currency. As a result, fluctuations
in the value of the U.S. dollar and foreign currencies may make the service more expensive for international customers, which could harm our
business. We do not currently engage in currency hedging activities to limit the risk of exchange rate fluctuation.

      Defects in our service could diminish demand for our service and subject us to substantial liability.

      Because our service is complex, it may have errors or defects that users identify after they begin using it, which could harm our reputation
and our business. Internet-based services frequently contain undetected errors when first introduced or when new versions or enhancements are
released. We have from time to time found defects in our service and new errors in our existing service may be detected in the future. Since our
customers use our service for important aspects of their business, any errors, defects or other performance problems with our service could hurt
our reputation and may damage our customers’ businesses. If that occurs, customers could elect not to renew, or delay or withhold payment to
us, we could lose future sales or customers may make warranty claims against us, which could result in an increase in our provision for
doubtful accounts, an increase in collection cycles for accounts receivable or the expense and risk of litigation.

      Any failure to protect our intellectual property rights could impair our ability to protect our proprietary technology and our brand.

       If we fail to protect our intellectual property rights adequately, our competitors might gain access to our technology, and our business
might be harmed. In addition, defending our intellectual property rights might entail significant expense. Any of our trademarks or other
intellectual property rights may be challenged by others or invalidated through administrative process or litigation. We currently have no issued
patents and may be unable to obtain patent protection in the future. In addition, if any patents are issued in the future, they may not provide us
with any competitive advantages, or may be challenged by third parties. Furthermore, legal standards relating to the validity, enforceability and
scope of protection of intellectual property rights are uncertain. Effective patent, trademark, copyright and trade secret protection may not be
available to us in every country in which our service is available. The laws of some foreign countries may not be as protective of intellectual
property rights as those in the United States, and mechanisms for enforcement of intellectual property rights may be inadequate. Accordingly,
despite our efforts, we may be unable to prevent third parties from infringing upon or misappropriating our intellectual property.

       We might be required to spend significant resources to monitor and protect our intellectual property rights. We may initiate claims or
litigation against third parties for infringement of our proprietary rights or to establish the validity of our proprietary rights. Any litigation,
whether or not it is resolved in our favor, could result in significant expense to us and divert the efforts of our technical and management
personnel.

      We may be sued by third parties for alleged infringement of their proprietary rights.

       The software and Internet industries are characterized by the existence of a large number of patents, trademarks and copyrights and by
frequent litigation based on allegations of infringement or other violations of intellectual property rights. As the number of entrants into our
market increases, the possibility of an intellectual property claim against us grows. Our technologies may not be able to withstand any
third-party claims or rights against their use. Any intellectual property claims, with or without merit, could be time-consuming and expensive to
litigate or settle, and could divert management attention from executing our business plan. In addition, many of our subscription agreements
require us to indemnify our customers for third-party intellectual property infringement claims, which would increase the cost to us of an
adverse ruling in such a claim. An adverse determination could also prevent us from offering our service to others.

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      We rely on third-party hardware and software that may be difficult to replace or which could cause errors or failures of our service.

       We rely on hardware purchased or leased and software licensed from third parties in order to offer our service, including database
software from Oracle Corporation. This hardware and software may not continue to be available on commercially reasonable terms, or at all.
Any loss of the right to use any of this hardware or software could result in delays in the provisioning of our service until equivalent technology
is either developed by us, or, if available, is identified, obtained and integrated, which could harm our business. Any errors or defects in
third-party hardware or software could result in errors or a failure of our service which could harm our business.

     We may be required to purchase the interest in our Japanese joint venture held by our joint venture partner, under certain
circumstances, on terms that may not be favorable to us.

      In some circumstances, we may be required to purchase the interest of our Japanese joint venture partner. If we default under the terms of
our joint venture agreement with our joint venture partner, or if we and our partner disagree over a course of action proposed for the joint
venture entity and the disagreement continues, then our partner may require that we purchase its interest in the joint venture. In the event we are
required to purchase our partner’s interest in the joint venture, we could be forced to make an unanticipated outlay of a significant amount of
capital, which could harm our operating results. Although the timing and circumstances of any such purchase, were it to be required, are not
predictable, if the joint venture were valued based on its most recent financing, which occurred in September 2003, the buyout price could be as
much as approximately $13.0 million.

     If we acquire any companies or technologies in the future, they could prove difficult to integrate, disrupt our business, dilute
stockholder value and adversely affect our operating results.

      We may acquire or make investments in complementary companies, services and technologies in the future. We have not made any
acquisitions or investments to date, and therefore our ability as an organization to make acquisitions or investments is unproven. Acquisitions
and investments involve numerous risks, including:

            difficulties in integrating operations, technologies, services and personnel;

            diversion of financial and managerial resources from existing operations;

            risk of entering new markets;

            potential write-offs of acquired assets;

            potential loss of key employees;

            inability to generate sufficient revenue to offset acquisition or investment costs; and

            delays in customer purchases due to uncertainty.

     In addition, if we finance acquisitions by issuing convertible debt or equity securities, our existing stockholders may be diluted which
could affect the market price of our stock. As a result, if we fail to properly evaluate and execute acquisitions or investments, our business and
prospects may be seriously harmed.

      Evolving regulation of the Internet may affect us adversely.

      As Internet commerce continues to evolve, increasing regulation by federal, state or foreign agencies becomes more likely. For example,
we believe increased regulation is likely in the area of data privacy, and laws and regulations applying to the solicitation, collection, processing
or use of personal or consumer information could affect our customers’ ability to use and share data, potentially reducing demand for CRM
solutions and

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restricting our ability to store, process and share data with our customers. In addition, taxation of services provided over the Internet or other
charges imposed by government agencies or by private organizations for accessing the Internet may also be imposed. Any regulation imposing
greater fees for Internet use or restricting information exchange over the Internet could result in a decline in the use of the Internet and the
viability of Internet-based services, which could harm our business.

      The success of our business depends on the continued growth and acceptance of the Internet as a business tool.

      Expansion in the sales of our service depends on the continued acceptance of the Internet as a communications and commerce platform
for enterprises. The Internet could lose its viability as a business tool due to delays in the development or adoption of new standards and
protocols to handle increased demands of Internet activity, security, reliability, cost, ease-of-use, accessibility, and quality-of-service. The
performance of the Internet and its acceptance as a business tool has been harmed by ―viruses,‖ ―worms,‖ and similar malicious programs and
the Internet has experienced a variety of outages and other delays as a result of damage to portions of its infrastructure. If for any reason the
Internet does not remain a widespread communications medium and commercial platform, the demand for our service would be significantly
reduced, which would harm our business.

     Our growth could strain our personnel and infrastructure resources, and if we are unable to implement appropriate controls and
procedures to manage our growth, we may not be able to successfully implement our business plan.

      We are currently experiencing a period of rapid growth in our headcount and operations, which has placed, and will continue to place, a
significant strain on our management, administrative, operational and financial infrastructure. We anticipate that further growth will be required
to address increases in our customer base, as well as our expansion into new geographic areas.

      Our success will depend in part upon the ability of our senior management to manage this growth effectively. To do so, we must continue
to hire, train and manage new employees as needed. If our new hires perform poorly, or if we are unsuccessful in hiring, training, managing
and integrating these new employees, or if we are not successful in retaining our existing employees, our business may be harmed. To manage
the expected growth of our operations and personnel, we will need to continue to improve our operational, financial and management controls
and our reporting systems and procedures. The additional headcount and capital investments we are adding will increase our cost base, which
will make it more difficult for us to offset any future revenue shortfalls by offsetting expense reductions in the short term. If we fail to
successfully manage our growth, we will be unable to execute our business plan.

     We are dependent on our management team, and the loss of any key member of this team may prevent us from implementing our
business plan in a timely manner.

      Our success depends largely upon the continued services of our executive officers and other key personnel, particularly Marc Benioff, our
Chief Executive Officer and Chairman of the Board. We are also substantially dependent on the continued service of our existing development
personnel because of the complexity of our service and technologies. We do not have employment agreements with any of our executive
officers, key management or development personnel that require them to remain our employees and, therefore, they could terminate their
employment with us at any time without penalty. We do not maintain key person life insurance policies on any of our employees. The loss of
one or more of our key employees could seriously harm our business.

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      Because competition for our target employees is intense, we may not be able to attract and retain the highly skilled employees we need
to support our planned growth.

       To execute our growth plan, we must attract and retain highly qualified personnel. Competition for these personnel is intense, especially
for engineers with high levels of experience in designing and developing software and Internet-related services and senior sales executives. We
may not be successful in attracting and retaining qualified personnel. We have from time to time in the past experienced, and we expect to
continue to experience in the future, difficulty in hiring and retaining highly skilled employees with appropriate qualifications. Many of the
companies with which we compete for experienced personnel have greater resources than we have. In addition, in making employment
decisions, particularly in the Internet and high-technology industries, job candidates often consider the value of the stock options they are to
receive in connection with their employment. Significant volatility in the price of our stock after this offering may, therefore, adversely affect
our ability to attract or retain key employees. Furthermore, proposed changes to accounting principles generally accepted in the United States
relating to the expensing of stock options may discourage us from granting the size or type of stock options awards that job candidates require
to join our company. If we fail to attract new personnel or fail to retain and motivate our current personnel, our business and future growth
prospects could be severely harmed.

      We might require additional capital to support business growth, and this capital might not be available.

       We intend to continue to make investments to support our business growth and may require additional funds to respond to business
challenges, including the need to develop new services or enhance our existing service, enhance our operating infrastructure and acquire
complementary businesses and technologies. Accordingly, we may need to engage in equity or debt financings to secure additional funds. If we
raise additional funds through further issuances of equity or convertible debt securities, our existing stockholders could suffer significant
dilution, and any new equity securities we issue could have rights, preferences and privileges superior to those of holders of our common stock,
including shares of common stock sold in this offering. Any debt financing secured by us in the future could involve restrictive covenants
relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional
capital and to pursue business opportunities, including potential acquisitions. In addition, we may not be able to obtain additional financing on
terms favorable to us, if at all. If we are unable to obtain adequate financing or financing on terms satisfactory to us, when we require it, our
ability to continue to support our business growth and to respond to business challenges could be significantly limited.

      Our reported financial results may be adversely affected by changes in accounting principles generally accepted in the United States.

      Generally accepted accounting principles in the United States are subject to interpretation by the Financial Accounting Standards Board,
or FASB, the American Institute of Certified Public Accountants, the Securities and Exchange Commission, or SEC, and various bodies
formed to promulgate and interpret appropriate accounting principles. A change in these principles or interpretations could have a significant
effect on our reported financial results, and could affect the reporting of transactions completed before the announcement of a change.

      For example, we currently are not required to record stock-based compensation charges if the employee’s stock option exercise price is
equal to or exceeds the deemed fair value of our common stock at the date of grant. However, several companies have recently elected to
change their accounting policies and begun to record the fair value of stock options as an expense. Although the standards have not been
finalized and the timing of a final statement has not been established, FASB has announced its support for recording expense for the fair value
of stock options granted. If we were required to change our accounting policy in accordance with Statement of Financial Accounting Standards
(SFAS) No. 123, Accounting for Stock-Based Compensation and SFAS No. 148. Accounting for Stock-Based Compensation—Transition and
Disclosure , and retroactively restate prior periods as if we had adopted these standards for all periods presented, then our cost of revenues and
operating expenses would have increased by approximately $1.7 million for fiscal 2003 and $4.1 million for fiscal 2004.

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Risks Related to this Offering

     The trading price of our common stock is likely to be volatile, and you might not be able to sell your shares at or above the initial
public offering price.

      The trading prices of the securities of technology companies have been highly volatile. Accordingly, the trading price of our common
stock is likely to be subject to wide fluctuations. Further, our common stock has no prior trading history. Factors affecting the trading price of
our common stock will include:

            variations in our operating results;

            announcements of technological innovations, new services or service enhancements, strategic alliances or significant agreements
             by us or by our competitors;

            recruitment or departure of key personnel;

            changes in the estimates of our operating results or changes in recommendations by any securities analysts that elect to follow our
             common stock; and

            market conditions in our industry, the industries of our customers and the economy as a whole.

      In addition, if the market for technology stocks or the stock market in general experiences continued or greater loss of investor
confidence, the trading price of our common stock could decline for reasons unrelated to our business, operating results or financial condition.
The trading price of our common stock might also decline in reaction to events that affect other companies in our industry even if these events
do not directly affect us.

      If securities analysts do not publish research or reports about our business or if they downgrade our stock, the price of our stock could
decline.

      The trading market for our common stock will rely in part on the research and reports that industry or financial analysts publish about us
or our business. We do not control these analysts. There are many large, well- established publicly traded companies active in our industry and
market, which may mean it will be less likely that we receive widespread analyst coverage. Furthermore, if one or more of the analysts who do
cover us downgrade our stock, our stock price would likely decline rapidly. If one or more of these analysts cease coverage of our company, we
could lose visibility in the market, which in turn could cause our stock price to decline.

      Future sales of shares by existing stockholders could cause our stock price to decline.

      If our existing stockholders sell, or indicate an intention to sell, substantial amounts of our common stock in the public market after the
180-day contractual lock-up and other legal restrictions on resale discussed in this prospectus lapse, the trading price of our common stock
could decline below the initial public offering price. Based on shares outstanding as of January 31, 2004, upon completion of this offering, we
will have outstanding 99,554,971 shares of common stock, assuming no exercise of the underwriters’ over-allotment option. Of these shares,
only the 10,000,000 shares of common stock sold in this offering will be freely tradable, without restriction, in the public market. Morgan
Stanley & Co. Incorporated may, in its sole discretion, permit our officers, directors, employees and current stockholders who are subject to the
180-day contractual lock-up to sell shares prior to the expiration of the lock-up agreements.

      After the lock-up agreements pertaining to this offering expire 180 days from the date of this prospectus, up to an additional 89,554,971
shares will be eligible for sale in the public market, 54,466,612 of which are held by directors, executive officers and other affiliates and will be
subject to volume limitations under Rule 144 under the Securities Act and various vesting agreements. In addition, the 1,299,496 shares subject
to outstanding warrants and the 24,817,774 shares subject to outstanding options and reserved for future issuance under our

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1999 Stock Option Plan, 2004 Equity Incentive Plan, 2004 Outside Directors Stock Plan and 2004 Employee Stock Purchase Plan will become
eligible for sale in the public market to the extent permitted by the provisions of various vesting agreements, the lock-up agreements and Rules
144 and 701 under the Securities Act of 1933, as amended, or the Securities Act. If these additional shares are sold, or if it is perceived that
they will be sold, in the public market, the trading price of our common stock could decline.

      The concentration of our capital stock ownership with insiders upon the completion of this offering will likely limit your ability to
influence corporate matters.

      We anticipate that our executive officers, directors, current 5 percent or greater stockholders and affiliated entities will together
beneficially own approximately 54.8 percent of our common stock outstanding after this offering. As a result, these stockholders, acting
together, will have control over most matters that require approval by our stockholders, including the election of directors and approval of
significant corporate transactions. Corporate action might be taken even if other stockholders, including those who purchase shares in this
offering, oppose them. This concentration of ownership might also have the effect of delaying or preventing a change of control of our
company that other stockholders may view as beneficial.

      Our management will have broad discretion over the use of the proceeds to us from this offering and might not apply the proceeds of
this offering in ways that increase the value of your investment.

     Our management will have broad discretion to use the net proceeds from this offering, and you will be relying on the judgment of our
management regarding the application of these proceeds. They might not apply the net proceeds of this offering in ways that increase the value
of your investment. We expect to use the net proceeds from this offering for general corporate purposes, including working capital and capital
expenditures, and for possible investments in, or acquisitions of, complementary services or technologies. We have not allocated these net
proceeds for any specific purposes. Our management might not be able to yield a significant return, if any, on any investment of these net
proceeds.

      You will experience immediate and substantial dilution in the net tangible book value of the shares you purchase in this offering.

      The initial public offering price of our common stock will be substantially higher than the book value per share of the outstanding
common stock after this offering. Therefore, based on an assumed offering price of $8.00 per share, if you purchase our common stock in this
offering, you will suffer immediate and substantial dilution of approximately $7.15 per share. If the underwriters exercise their over-allotment
option, or if outstanding options and warrants to purchase our common stock are exercised, you will experience additional dilution.

     Provisions in our amended and restated certificate of incorporation and bylaws or Delaware law might discourage, delay or prevent a
change of control of our company or changes in our management and, therefore, depress the trading price of our common stock.

      Our amended and restated certificate of incorporation and bylaws contain provisions that could depress the trading price of our common
stock by acting to discourage, delay or prevent a change in control of our company or changes in our management that the stockholders of our
company may deem advantageous. These provisions:

            establish a classified board of directors so that not all members of our board are elected at one time;

            provide that directors may only be removed ―for cause‖ and only with the approval of 66 / 3 percent of our stockholders;
                                                                                                          2




            require super-majority voting to amend some provisions in our amended and restated certificate of incorporation and bylaws;

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            authorize the issuance of ―blank check‖ preferred stock that our board could issue to increase the number of outstanding shares and
             to discourage a takeover attempt;

            limit 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 stockholder meetings.

      In addition, Section 203 of the Delaware General Corporation Law may discourage, delay or prevent a change in control of our company.

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                                 SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

      This prospectus, including particularly in the sections entitled ―Prospectus Summary,‖ ―Risk Factors,‖ ―Management’s Discussion and
Analysis of Financial Condition and Results of Operations‖ and ―Business,‖ contains forward-looking statements. In some cases, you can
identify forward-looking statements by terminology such as ―may,‖ ―will,‖ ―should,‖ ―expects,‖ ―intends,‖ ―plans,‖ ―anticipates,‖ ―believes,‖
―estimates,‖ ―predicts,‖ ―potential,‖ ―continue‖ or the negative of these terms or other comparable terminology. These statements relate to
future events or our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our
actual results, levels of activity, performance or achievements to differ materially from any future results, levels of activity, performance or
achievements expressed or implied by these forward-looking statements. These risks and other factors include those listed under ―Risk Factors‖
and elsewhere in this prospectus. You should specifically consider the numerous risks discussed under ―Risk Factors.‖ These statements are
only predictions based on our current expectations and projections about future events and we cannot guarantee future results, levels of activity,
performance or achievements.

      You should read this prospectus and the documents that we reference in this prospectus and that are filed as exhibits to the registration
statement on Form S-1, of which this prospectus is a part, that we have filed with the SEC, completely and with the understanding that our
actual future results, levels of activity, performance and achievements may be materially different from what we expect. We qualify all of our
forward-looking statements by these cautionary statements.



      For investors outside the United States: Neither we nor any of the underwriters have done anything that would permit this offering or
possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. You
are required to inform yourselves about and to observe any restrictions relating to this offering and the distribution of this prospectus.


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                                                              USE OF PROCEEDS

     We estimate that our net proceeds from the sale of the shares in this offering will be approximately $70.7 million, after deducting
estimated underwriting discounts and commissions and estimated offering expenses payable by us. If the underwriters exercise their
over-allotment option in full, we estimate that our net proceeds will be approximately $81.9 million.

      The principal purposes of this offering are to obtain additional capital, to create a public market for our common stock and to facilitate
our future access to the public equity markets.

      We anticipate that we will use the net proceeds for general corporate purposes, including working capital and capital expenditures, but we
have not designated any specific uses. We may also use a portion of the net proceeds to fund possible investments in, or acquisitions of,
complementary businesses, services or technologies. We have no current agreements or commitments with respect to any investment or
acquisition, and we currently are not engaged in negotiations with respect to any investment or acquisition. In addition, the amount and timing
of what we actually spend for these purposes may vary significantly and will depend on a number of factors, including our future revenue and
cash generated by operations and the other factors described in ―Risk Factors.‖ Accordingly, our management will have broad discretion in
applying the net proceeds of this offering. Pending these uses, we intend to invest the net proceeds in high quality, investment grade, short-term
fixed income instruments which include corporate, financial institution, federal agency or U.S. government obligations.

                                                              DIVIDEND POLICY

      We have never paid any cash dividends on our common stock. Our board of directors currently intends to retain any future earnings to
support operations and to finance the growth and development of our business and does not intend to pay cash dividends on our common stock
for the foreseeable future. Any future determination related to our dividend policy will be made at the discretion of the board.

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                                                               CAPITALIZATION

        The following table summarizes our cash, cash equivalents and short-term marketable securities, and capitalization as of January 31,
2004:

             on an actual basis;

             on a pro forma basis assuming the conversion of all outstanding shares of our convertible preferred stock into 58,024,345 shares of
              our common stock upon the closing of this offering; and

             on a pro forma as adjusted basis to give effect to receipt of the net proceeds from the sale by us in this offering of 10,000,000
              shares of common stock at an assumed initial public offering price of $8.00 per share, after deducting the estimated underwriting
              discounts and commissions and the estimated offering expenses payable by us.

     You should read this table in conjunction with ―Selected Consolidated Financial Data,‖ ―Management’s Discussion and Analysis of
Financial Condition and Results of Operations‖ and our consolidated financial statements and related notes included elsewhere in this
prospectus.
                                                                                                                   As of
                                                                                                              January 31, 2004

                                                                                                                                           Pro Forma
                                                                                                Actual             Pro Forma               As Adjusted

                                                                                                                             (unaudited)
                                                                                                               (in thousands)
Cash, cash equivalents and short-term marketable securities                                 $    35,812        $      35,812               $106,512

Convertible preferred stock, $0.001 par value; 63,738,843 shares authorized,
  58,024,345 shares issued and outstanding, actual; 5,000,000 shares authorized,
  none issued and outstanding, pro forma and pro forma as adjusted                          $    61,137        $          —           $              —
Stockholders’ equity (deficit):
    Common stock, $0.001 par value; 200,000,000 shares authorized, 31,530,626
      shares issued and outstanding, actual; 400,000,000 shares authorized,
      89,554,971 issued and outstanding, pro forma; and 400,000,000 shares
      authorized, 99,554,971 shares issued and outstanding, pro forma as adjusted                    32                   90                      100
    Additional paid-in capital                                                                   35,580               96,659                  167,349
    Deferred stock-based compensation                                                            (8,251 )             (8,251 )                 (8,251 )
    Notes receivables from stockholders                                                          (1,674 )             (1,674 )                 (1,674 )
    Accumulated other comprehensive income                                                           10                   10                       10
    Accumulated deficit                                                                         (71,934 )            (71,934 )                (71,934 )

            Total stockholders’ equity (deficit)                                                (46,237 )             14,900                    85,600

                 Total capitalization                                                       $    14,900        $      14,900          $         85,600


        The number of shares shown as issued and outstanding in the table above excludes:

             15,928,395 shares of common stock issuable upon the exercise of options outstanding as of January 31, 2004 with exercise prices
              ranging from $0.02 to $8.00 per share and a weighted average exercise price of $2.29 per share;

             4,000,000 shares of common stock to be available for issuance under our 2004 Equity Incentive Plan, 1,000,000 shares of common
              stock to be available for issuance under our 2004 Outside Directors Stock Plan and 1,000,000 shares of common stock to be
              available for issuance under our 2004 Employee Stock Purchase Plan, each plan to be effective upon the completion of the
              offering;

             1,299,496 shares of common stock issuable upon the exercise of warrants outstanding as of January 31, 2004 with exercise prices
              ranging from $1.10 to $3.89 per share and a weighted average exercise price of $2.43 per share; and

             2,889,379 shares of common stock reserved for future grants under our 1999 Stock Option Plan as of January 31, 2004.

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                                                                       DILUTION

     If you invest in our common stock in this offering, your ownership interest in salesforce.com will be diluted to the extent of the difference
between the initial public offering price per share and the net tangible book value per share after this offering. Our net tangible book value as of
January 31, 2004 was $14.3 million, or $0.16 per share of our common stock. We calculate net tangible book value per share by taking the
amount of our total tangible assets, reduced by the amount of our total liabilities, and then dividing that amount by the total number of shares of
common stock outstanding, after giving effect to the automatic conversion of all shares of our outstanding preferred stock.

     After giving effect to our sale of the shares in this offering at an assumed initial public offering price of $8.00 per share and deducting
estimated underwriting discounts and commissions and estimated offering expenses payable by us, our net tangible book value on January 31,
2004 would have been $85.0 million, or $0.85 per share of our common stock. This amount represents an immediate increase in net tangible
book value of $0.69 per share to existing stockholders and an immediate and substantial dilution in net tangible book value of $7.15 per share
to new investors purchasing shares in this offering at the assumed initial public offering price.

      The following table illustrates this per share dilution:

Assumed initial public offering price per share                                                                                                  $ 8.00
    Net tangible book value per share before offering                                                                               $ 0.16
    Increase per share attributable to new investors (1)                                                                              0.69

As adjusted net tangible book value per share after offering                                                                                       0.85

Dilution per share to new investors                                                                                                              $ 7.15


(1)   Does not give effect to the underwriters’ exercise of their over-allotment option. Also, to the extent any outstanding options or warrants
      are exercised, you will experience further dilution.

      In addition, we may choose to raise additional capital due to market conditions or strategic considerations even if we believe we have
sufficient funds for our current or future operating plans. To the extent that additional capital is raised through the sale of equity or convertible
debt securities, the issuance of these securities could result in further dilution to our stockholders.

      The following table summarizes, as of January 31, 2004, the differences between the number of shares purchased from us, the total
consideration paid, or to be paid, and the average price per share paid, or to be paid, by existing stockholders and by new investors. As the table
shows, new investors purchasing shares in this offering will pay an average price per share substantially higher than our existing stockholders
paid. The table below assumes an initial public offering price of $8.00 per share for shares purchased in this offering before estimated
underwriting discounts and commissions and estimated offering expenses payable by us:
                                                                                                                                             Average
                                                                                                                                             Price Per
                                                                    Shares Purchased                     Total Consideration                  Share

                                                                 Number                Percent         Amount                  Percent

Existing stockholders                                            89,554,971                90 %   $    67,990,000                  46 %      $     0.76
New investors                                                    10,000,000                10          80,000,000                  54              8.00

      Total                                                      99,554,971               100 %   $   147,990,000                 100 %


                                                                              21
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     The number of shares to be outstanding immediately after the offering is based on 89,554,971 shares of common stock outstanding as of
January 31, 2004, which assumes the conversion of all of our outstanding shares of convertible preferred stock into 58,024,345 shares of
common stock, and excludes:

            15,928,395 shares of common stock issuable upon the exercise of options outstanding as of January 31, 2004, with exercise prices
             ranging from $0.02 to $8.00 per share and a weighted average exercise price of $2.29 per share;

            4,000,000 shares of common stock to be available for issuance under our 2004 Equity Incentive Plan, 1,000,000 shares of common
             stock to be available for issuance under our 2004 Outside Directors Stock Plan and 1,000,000 shares of common stock to be
             available for issuance under our 2004 Employee Stock Purchase Plan, each plan to be effective upon the completion of the
             offering;

            1,299,496 shares of common stock issuable upon the exercise of warrants outstanding as of January 31, 2004, with exercise prices
             ranging from $1.10 to $3.89 per share and a weighted average exercise price of $2.43 per share; and

            2,889,379 shares of common stock reserved for future grants under our 1999 Stock Option Plan as of January 31, 2004.

                                                                      22
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                                             SELECTED CONSOLIDATED FINANCIAL DATA

      The following selected consolidated financial data should be read in conjunction with ―Management’s Discussion and Analysis of
Financial Condition and Results of Operations‖ following this section and our consolidated financial statements and related notes appearing
elsewhere in this prospectus. The selected consolidated statement of operations data for the fiscal years ended January 31, 2002, 2003 and
2004, and the selected consolidated balance sheet data as of January 31, 2003 and 2004, are derived from our audited consolidated financial
statements included in this prospectus. The consolidated statement of operations data for the period from inception (February 3, 1999) to
January 31, 2000 and the fiscal year ended January 31, 2001, and the selected consolidated balance sheet data as of January 31, 2000, 2001 and
2002, are derived from audited consolidated financial statements not included in this prospectus. The historical results are not necessarily
indicative of results to be expected in any future period. In our previously issued financial statements, we expensed sales commission payments
for customer contracts entered into during fiscal 2002 when the liabilities were incurred, regardless of whether the customer contracts were
noncancelable or not. At the start of fiscal 2003, we changed our accounting policy to defer and amortize the sales commissions over the
noncancelable terms of the related customer contracts. We erroneously characterized the change in policy as a change in accounting estimate
and applied our deferral and amortization policy only to noncancelable subscription arrangements that were entered into after February 1, 2002.
Upon review, we concluded that the change to the deferral and amortization method was a change in accounting principle and not a change in
accounting estimate. Accordingly, to correct this error, we have restated our fiscal 2002 and 2003 results as though the new method had been
retroactively applied as of May 1, 2001, which is when we began to enter into noncancelable subscription arrangements with customers. As
such, our consolidated financial statements for fiscal 2002, 2003 and 2004 are presented using the same basis of accounting for sales
commissions.
                                                            Period from
                                                              inception
                                                            (February 3,
                                                               1999) to
                                                            January 31,
                                                                2000                               Fiscal Year Ended January 31,

                                                                                                      2002, As                 2003, As
                                                                                 2001                 Restated                 Restated       2004

                                                                                   (in thousands, except per share data)
Consolidated Statement of Operations:
Revenues:
    Subscription and support                            $             —      $     5,022          $     21,513             $     47,656     $ 85,796
    Professional services and other                                   —              413                   896                    3,335       10,227

           Total revenues                                             —            5,435                22,409                   50,991       96,023
Cost of revenues (1):
     Subscription and support                                         —            1,730                  3,718                    7,199       7,782
     Professional services and other                                  —            1,692                  2,329                    3,164       9,491

         Total cost of revenues                                       —            3,422                 6,047                   10,363       17,273
Gross profit                                                          —            2,013                16,362                   40,628       78,750
Operating expenses (1):
    Research and development                                       1,089          3,366                  5,308                    4,648        6,962
    Marketing and sales                                            2,499         25,392                 24,605                   33,522       54,600
    General and administrative                                     1,976          6,855                  8,317                   12,958       16,915
    Lease abandonment (recovery)                                      —              —                   7,657                       —        (3,445 )

           Total operating expenses                                5,564          35,613                45,887                   51,128       75,032
(Loss) income from operations                                     (5,564 )       (33,600 )             (29,525 )                (10,500 )      3,718
Interest income                                                      121           1,715                   755                      471          379
Interest expense                                                      (3 )           (42 )                (272 )                    (77 )        (22 )
Other income (expense)                                                (6 )            63                     8                       98          164

(Loss) income before provision for income taxes
  and minority interest                                           (5,452 )       (31,864 )             (29,034 )                (10,008 )      4,239
Provision for income taxes                                            —               —                     —                        —           541

(Loss) income before minority interest                            (5,452 )       (31,864 )             (29,034 )                (10,008 )      3,698
Minority interest in consolidated joint venture                       —              193                   425                      292         (184 )
Net (loss) income   $   (5,452 )    $   (31,671 )   $   (28,609 )   $   (9,716 )   $   3,514


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                                                               Period from
                                                                 inception
                                                               (February 3,
                                                                  1999) to
                                                               January 31,
                                                                   2000                                              Fiscal Year Ended January 31,

                                                                                                                         2002, As                 2003, As
                                                                                                2001                     Restated                 Restated                   2004

                                                                                                 (in thousands, except per share data)
Net (loss) income per share:
     Basic                                                 $           (0.55 )            $      (2.38 )             $      (1.36 )           $       (0.37 )           $         0.12
     Diluted                                                           (0.55 )                   (2.38 )                    (1.36 )                   (0.37 )                     0.04
     Pro forma (unaudited)                                                                                                                                                        0.04
Weighted-average shares used in computing per
  share amounts:
     Basic (2)                                                        10,000                    13,314                     21,039                   26,375                   29,605
     Diluted (2)                                                      10,000                    13,314                     21,039                   26,375                   95,409
     Pro forma (unaudited) (2)                                                                                                                                               95,409

      The pro forma per share amounts in the consolidated statement of operations data table above give effect to the automatic conversion of
all outstanding shares of our convertible preferred stock into 58,024,345 shares of our common stock upon the closing of this offering.
                                                                                                          As of January 31,

                                                               2000                      2001                       2002                      2003                         2004

                                                                                                              (in thousands)
Consolidated Balance Sheet Data:
Cash, cash equivalents and short-term marketable
  securities                                              $ 12,609                $       22,200               $     11,709           $        16,009               $       35,812
Working capital                                             12,053                        20,163                      6,497                     1,172                        4,140
Total assets                                                14,196                        37,047                     29,713                    39,673                       87,511
Convertible preferred stock                                 17,156                        59,852                     61,137                    61,137                       61,137
Accumulated deficit                                         (5,452 )                     (37,123 )                  (65,732 )                 (75,448 )                    (71,934 )
Total stockholders’ deficit                                 (3,878 )                     (29,329 )                  (51,348 )                 (55,875 )                    (46,237 )

(1)   Cost of revenues and operating expenses include stock-based expenses, consisting of:
                                                                          Period from
                                                                            inception
                                                                          (February 3,
                                                                             1999) to
                                                                          January 31,                                      Fiscal Year Ended
                                                                              2000                                            January 31,

                                                                                                       2001                2002               2003                  2004

                                                                                                                (in thousands)
        Cost of revenues                                              $             —            $       345          $       369         $     428             $     655
        Research and development                                                   214                   431                  436               402                   462
        Marketing and sales                                                        386                 1,350                1,422             1,696                 2,029
        General and administrative                                                 267                 1,326                2,224             2,241                 1,213

             Total stock-based expenses                               $            867           $ 3,452              $ 4,451             $ 4,767               $ 4,359


(2)   For information regarding the computation of per share amounts, refer to notes 1 and 10 of the notes to our consolidated financial
      statements.

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                                          MANAGEMENT’S DISCUSSION AND ANALYSIS
                                    OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

      The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our
consolidated financial statements and related notes that appear in this prospectus. In addition to historical consolidated financial information,
the following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ
materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include those
discussed below and elsewhere in this prospectus, particularly in “Risk Factors.”

Overview

      We are the leading provider, based on market share, of application services that allow organizations to easily share customer information
on demand, according to a March 2004 report by Forrester Research, Inc. We provide a comprehensive CRM service to businesses of all sizes
and industries worldwide.

     We were founded in February 1999 and began offering our on-demand CRM application service in February 2000. Our revenues have
grown from $5.4 million in fiscal 2001 to $96.0 million in fiscal 2004.

      Our objective is to be the leading provider of on-demand application services for businesses worldwide. To address our market
opportunity, our management team is focused on a number of short and long-term challenges, including strengthening and extending our
service offerings, adding new customers and expanding our sales efforts into new territories, deepening our relationships with our existing
customers and encouraging the development of third-party applications on our platform.

      In order to increase our revenues and take advantage of our market opportunity, we will need to add substantial numbers of paying
subscriptions. We define paying subscriptions as unique user accounts, purchased by customers for use by their employees and other
customer-authorized users, that have not been suspended for non-payment. The number of our paying subscribers increased from
approximately 30,000 as of February 1, 2001 to over 127,000 as of January 31, 2004. We plan to re-invest our revenues for the foreseeable
future in the following ways: hiring additional personnel, particularly in marketing and sales; expanding our domestic and international selling
and marketing activities; increasing our research and development activities to upgrade and extend our service offerings and to develop new
services and technologies; expanding the number of locations around the world where we conduct business; adding to our infrastructure to
support our growth; and expanding our operational and financial systems to manage a growing business.

       We expect marketing and sales costs, which were 66 percent of our fiscal 2003 total revenues and 57 percent of our total revenues for
fiscal 2004, to continue to represent a substantial portion of total revenues in the future as we seek to add and manage more paying subscribers,
build brand awareness and increase the number of marketing events that we sponsor.

Fiscal Year

      Our fiscal year ends on January 31. References to fiscal 2004, for example, refer to the fiscal year ended January 31, 2004.

Sources of Revenues

     We derive our revenues from two sources: (1) subscription revenues, which are comprised of subscription fees from customers accessing
our on-demand application service, and from customers purchasing additional support beyond the standard support that is included in the basic
subscription fee; and (2) related professional

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services and other revenues, consisting primarily of training fees. Subscription and support revenues accounted for more than 90 percent of our
total revenues in fiscal 2002 and 2003, and 89 percent of our total revenues during fiscal 2004. Subscription revenues are driven primarily by
the number of paying subscribers of our service and the subscription price of our service. None of our customers accounted for more than 5
percent of our revenues in any fiscal year.

      Subscription and support revenues are recognized on a monthly basis over the life of the contract. The typical subscription and support
term is 12 to 24 months, although terms range from one to 60 months. Our subscription and support contracts are non-cancelable, though
customers typically have the right to terminate their contracts for cause if we fail to perform. We generally invoice our customers in annual or
quarterly installments and typical payment terms provide that our customers pay us within 30 days of invoice. Amounts that have been invoiced
are recorded in accounts receivable and in deferred revenue, or in revenue depending on whether the revenue recognition criteria have been
met. In general, we collect our billings in advance of the subscription service period.

     We market our on-demand application service primarily through direct sales efforts and also indirectly through partners. We offer our
customers three principal editions of our on-demand application service:

            Enterprise Edition, which is our most fully-featured offering and which is targeted at large companies that have several different
             divisions or departments;

            Professional Edition, which is targeted at medium-sized and large businesses that need a robust CRM solution but do not need
             some of the more advanced features and integration capabilities of Enterprise Edition; and

            Team Edition, which is targeted primarily at small businesses that seek a robust sales force automation solution without the more
             sophisticated features of our other editions.

     Professional services and other revenues consist of fees associated with consulting and implementation services and training. Our
consulting and implementation engagements are typically billed on a time and materials basis. We also offer a number of classes on
implementing, using and administering our service that are billed on a per person, per class basis. Our typical payment terms provide that our
customers pay us within 30 days of invoice.

Cost of Revenues and Operating Expenses

      Cost of Revenues . Cost of subscription and support revenues primarily consists of expenses related to hosting our service and providing
support, depreciation expense associated with computer equipment, costs associated with website development activities, allocated overhead
and amortization expense associated with capitalized software. To date, the expense associated with capitalized software has not been material
to our cost of revenues. We allocate overhead such as rent and occupancy charges, employee benefit costs and depreciation expense to all
departments based on headcount. As such, general overhead expenses are reflected in each cost of revenue and operating expense category.
Cost of professional services and other revenues consists primarily of employee-related costs associated with these services and allocated
overhead. The cost associated with providing professional services is significantly higher as a percentage of revenue than for our on-demand
subscription service due to the labor costs associated with providing consulting services.

      To the extent that our customer base grows, we intend to continue to invest additional resources in our on-demand application service and
in our consulting services. The timing of these additional expenses could affect our cost of revenues, both in terms of absolute dollars and as a
percentage of revenues, in a particular quarterly period. For example, we plan to increase the number of employees who are fully dedicated to
consulting services. We also plan to enter into an agreement with a third-party Web hosting provider during fiscal 2005 that will provide
additional disaster recovery services in the event our primary data center becomes unavailable. We currently expect the annual cost of these
services to be less than $1.5 million.

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      Research and Development . Research and development expenses consist primarily of salaries and related expenses and allocated
overhead. We have historically focused our research and development efforts on increasing the functionality and enhancing the ease of use of
our on-demand application service. Because of our proprietary, scalable and secure multi-tenant architecture, we are able to provide all of our
customers with a service based on a single version of our application. As a result, we do not have to maintain multiple versions, which enables
us to have relatively low research and development expenses as compared to traditional enterprise software business models. We expect that in
the future, research and development expenses will increase in absolute dollars as we upgrade and extend our service offerings and develop
new technologies.

      Marketing and Sales . Marketing and sales expenses are our largest cost, accounting for 66 percent of our fiscal 2003 total revenues and
57 percent of our fiscal 2004 total revenues. Marketing and sales expenses consist primarily of salaries and related expenses for our sales and
marketing staff, including commissions, payments to partners, marketing programs, which include advertising, events, corporate
communications, and other brand building and product marketing expenses and allocated overhead. As a result of the initial launch of our
application service in February 2000, marketing costs, particularly advertising, accounted for 62 percent of fiscal 2001 and 47 percent of fiscal
2002 total marketing and sales expenses. Since the beginning of fiscal 2003, our sales costs as a percentage of total marketing and sales
expenses have increased as a result of lower advertising expenditures.

      As our revenues increase, we plan to continue to invest heavily in marketing and sales by increasing the number of direct sales personnel
in order to add new customers and increase penetration within our existing customer base, expanding our domestic and international selling and
marketing activities, building brand awareness and sponsoring additional marketing events. We expect that in the future, marketing and sales
expenses will increase in absolute dollars and continue to be our largest cost.

       General and Administrative . General and administrative expenses consist of salaries and related expenses for executive, finance and
accounting, and management information systems personnel, professional fees, other corporate expenses and allocated overhead. We expect
that in the future, general and administrative expenses will increase in absolute dollars as we add personnel and incur additional professional
fees and insurance costs related to the growth of our business and to our operations as a public company.

      Lease Abandonment and Recovery. In December 2001, we abandoned excess office space in San Francisco, California and recorded a
$7.7 million charge in the fourth quarter of fiscal 2002 pertaining to the estimated future obligations under the non-cancelable lease. In August
2003, we entered into an agreement releasing us from future obligations for some of the abandoned space in connection with the landlord’s
lease of this space to another tenant. Accordingly, we recorded a $4.3 million credit in the third quarter of fiscal 2004 to reflect the reversal of
the remaining accrued liability that was directly associated with this space. During the fourth quarter of fiscal 2004, we recorded an additional
accrual of $900,000 related to the remaining 5,000 square feet of abandoned excess office space in San Francisco. This additional accrual
resulted from a revision of our estimates of the timing and amount of projected subtenant income based on difficulties in subleasing the
remaining space.

      Stock-Based Expenses . Our cost of revenues and operating expenses include stock-based expenses related to options and warrants
issued to non-employees and option grants to employees in situations where the exercise price was less than the deemed fair value of our
common stock at the date of grant. These charges have been significant and are reflected in the historical financial results.

Joint Venture

      In December 2000, we established a Japanese joint venture, Kabushiki Kaisha salesforce.com, with SunBridge, Inc., a Japanese
corporation, to assist us with our sales efforts in Japan. As of January 31, 2004, we owned a 64 percent interest in the joint venture. Because of
this majority interest, we consolidate the venture’s

                                                                         27
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financial results, which are reflected in each revenue, cost of revenues and expense category in our consolidated statement of operations. We
then record minority interest, which reflects the minority investors’ interest in the venture’s results. Through January 31, 2004, the operating
performance and liquidity requirements of the Japanese joint venture had not been significant. While we plan to expand our selling and
marketing activities in Japan in order to add new customers, we believe the future operating performance and liquidity requirements of the
Japanese joint venture will not be significant.

Critical Accounting Policies

       Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States. The
preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets,
liabilities, revenues, costs and expenses and related disclosures. On an ongoing basis, we evaluate our estimates and assumptions. Our actual
results may differ from these estimates under different assumptions or conditions.

      We believe that of our significant accounting policies, which are described in note 1 of the notes to our consolidated financial statements,
the following accounting policies involve a greater degree of judgment and complexity. Accordingly, these are the policies we believe are the
most critical to aid in fully understanding and evaluating our consolidated financial condition and results of operations.

      Revenue Recognition . We recognize revenue in accordance with SEC Staff Accounting Bulletin No. 101, ―Revenue Recognition in
Financial Statements, as amended by Staff Accounting Bulletin No. 104, ―Revenue Recognition.‖ On August 1, 2003, we adopted Emerging
Issues Task Force, or EITF, Issue No. 00-21, ―Revenue Arrangements with Multiple Deliverables.‖

      We recognize revenue when all of the following conditions are satisfied: (1) there is persuasive evidence of an arrangement; (2) the
service has been provided to the customer; (3) the collection of our fees is probable; and (4) the amount of fees to be paid by the customer is
fixed or determinable.

      We recognize revenues from subscription contracts each month over the lives of the contracts. Support revenues from customers who
purchase our premium support offerings are recognized ratably over the term of the support contract. Consulting services and training revenues
are accounted for separately from subscription and support revenues because these services have value to the customer on a standalone basis
and there is objective and reliable evidence of their fair value of the undelivered elements. Our arrangements do not contain general rights of
return. Consulting revenues are recognized upon completion of the contracts that are of short duration (generally less than 60 days) and as the
services are rendered for contracts of longer duration. Training revenues are recognized after the services are performed.

      Accounting for Deferred Commissions. We defer commission payments to our direct sales force. The commissions are deferred and
amortized to sales expense over the noncancelable terms of the related subscription contracts with our customers, which are typically 12 to 24
months. The commission payments, which are paid in full the month after the customer’s service commences, are a direct and incremental cost
of the revenue arrangements. The deferred commission amounts are recoverable through the future revenue streams under the noncancelable
customer contracts. We believe this is the preferable method of accounting as the commission charges are so closely related to the revenue
from the noncancelable customer contracts that they should be recorded as an asset and charged to expense over the same period that the
subscription revenue is recognized.

      During fiscal 2002, we deferred $870,000 of commission expenditures and we amortized $241,000 to sales expense. During fiscal 2003,
we deferred $5.7 million of commission expenditures and we amortized $2.9 million to sales expense. During fiscal 2004, we deferred $16.3
million of commission expenditures and we amortized $8.6 million to sales expense. At January 31, 2004, deferred commissions on our
consolidated balance sheet totaled $11.2 million.

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      Accounting for Stock-Based Awards. We record deferred stock-based compensation charges in the amount by which the exercise price
of an option is less than the deemed fair value of our common stock at the date of grant. Because there has been no public market for our stock,
our board of directors has determined the fair value of our common stock based upon several factors, including, but not limited to, our
operating and financial performance, private sales of our common and preferred stock between third parties, issuances of convertible preferred
stock and appraisals performed by an appraisal firm. We amortize the deferred compensation charges ratably over the four-year vesting period
of the underlying option awards. As of January 31, 2004, we had an aggregate of $8.3 million of deferred stock-based compensation remaining
to be amortized. We currently expect this deferred stock-based compensation balance to be amortized as follows: $3.2 million during fiscal
2005; $2.9 million during fiscal 2006; $1.9 million during fiscal 2007; and $300,000 during fiscal 2008. We have elected not to record
stock-based compensation expense when employee stock options are awarded at exercise prices equal to the deemed fair value of our common
stock at the date of grant. The impact of expensing employee stock awards using the Black-Scholes option-pricing model is further described in
note 1 of the notes to our consolidated financial statements.

      In the past, we have awarded a limited number of stock options and warrants to non-employees. For these options and warrants, we
recognize the stock-based compensation expense over the vesting periods of the underlying awards, based on an estimate of their fair value on
the vesting dates using the Black-Scholes option-pricing model. As of January 31, 2004, we had recognized compensation expense on all
options and warrants issued to non-employees except for options for 105,000 shares of our common stock, substantially all of which will fully
vest by July 2007 and which have a weighted average exercise price of $2.50 per share.

                                                                      29
Table of Contents

Results of Operations

      The following tables set forth selected consolidated statements of operations data for each of the fiscal years indicated. See note 1 of the
notes to our consolidated financial statements for a discussion of the restatement of our results in fiscal 2002 and fiscal 2003.
                                                                                                              Fiscal Year Ended January 31,

                                                                                                 2002, As                  2003, As
                                                                                                 Restated                  Restated                  2004

                                                                                                                      (in thousands)
Revenues:
    Subscription and support                                                                 $     21,513              $     47,656              $    85,796
    Professional services and other                                                                   896                     3,335                   10,227

           Total revenues                                                                          22,409                    50,991                   96,023

Cost of revenues:
     Subscription and support                                                                        3,718                     7,199                   7,782
     Professional services and other                                                                 2,329                     3,164                   9,491

           Total cost of revenues                                                                    6,047                   10,363                   17,273

Gross profit                                                                                       16,362                    40,628                   78,750

Operating expenses:
    Research and development                                                                        5,308                     4,648                    6,962
    Marketing and sales                                                                            24,605                    33,522                   54,600
    General and administrative                                                                      8,317                    12,958                   16,915
    Lease abandonment (recovery)                                                                    7,657                        —                    (3,445 )

           Total operating expenses                                                                45,887                    51,128                   75,032
(Loss) income from operations                                                                     (29,525 )                 (10,500 )                  3,718
Interest income                                                                                       755                       471                      379
Interest expense                                                                                     (272 )                     (77 )                    (22 )
Other income                                                                                            8                        98                      164

(Loss) income before provision for income taxes and minority interest                             (29,034 )                 (10,008 )                  4,239
Provision for income taxes                                                                             —                         —                       541

(Loss) income before minority interest                                                            (29,034 )                 (10,008 )                  3,698
Minority interest in consolidated joint venture                                                       425                       292                     (184 )

Net (loss) income                                                                            $    (28,609 )            $      (9,716 )           $     3,514


                                                                                                                    As of January 31,

                                                                                                  2002                      2003                     2004

                                                                                                            (in thousands, except customer and
                                                                                                                      subscriber data)
Balance sheet data:
    Cash, cash equivalents and short-term marketable securities                              $     11,709              $     16,009              $    35,812
    Deferred revenue                                                                                7,128                    19,171                   49,677
Customer and subscriber data (unaudited):
    Approximate number of customers                                                                 3,500                     5,700                    8,700
    Approximate number of paying subscriptions                                                     53,000                    76,000                  127,000

                                                                                                              Fiscal Year Ended January 31,

                                                                                                  2002                      2003                     2004

                                                                                                                      (in thousands)
Cash flow provided by (used in) operating activities        $   (13,166 )   $   5,213   $   21,781

                                                       30
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                                                                                                                    Fiscal Year Ended January 31,

                                                                                                            2002                 2003                  2004

                                                                                                                           (in thousands)
Revenues by geography:
    Americas                                                                                           $ 20,305              $ 43,855              $ 78,958
    Europe                                                                                                1,680                 5,345                11,754
    Asia Pacific                                                                                            424                 1,791                 5,311

                                                                                                       $ 22,409              $ 50,991              $ 96,023


     Cost of revenues and operating expenses include the following amounts related to stock-based awards:

                                                                                                                    Fiscal Year Ended January 31,

                                                                                                            2002                 2003                  2004

                                                                                                                           (in thousands)
Stock-based expenses:
    Cost of revenues                                                                                   $         369         $      428            $      655
    Research and development                                                                                     436                402                   462
    Marketing and sales                                                                                        1,422              1,696                 2,029
    General and administrative                                                                                 2,224              2,241                 1,213

           Total stock-based expenses                                                                  $       4,451         $    4,767            $    4,359


     The following tables set forth selected consolidated statements of operations data for each of the periods indicated as a percentage of total
revenues.
                                                                                                                   Fiscal Year Ended January 31,

                                                                                                        2002                     2003                   2004

Revenues:
    Subscription and support                                                                                96 %                  93 %                    89 %
    Professional services and other                                                                          4                     7                      11

           Total revenues                                                                                  100                   100                    100

Cost of revenues:
     Subscription and support                                                                               17                    14                       8
     Professional services and other                                                                        10                     6                      10

           Total cost of revenues                                                                           27                    20                      18

Gross profit                                                                                                73                    80                      82

Operating expenses:
    Research and development                                                                                24                     9                       7
    Marketing and sales                                                                                    110                    66                      57
    General and administrative                                                                              37                    26                      18
    Lease abandonment (recovery)                                                                            34                    —                       (4 )

           Total operating expenses                                                                      205                     101                      78
(Loss) income from operations                                                                           (132 )                   (21 )                     4
Interest income                                                                                            3                       1                       1
Interest expense                                                                                          (1 )                    —                       —
Other income                                                                                              —                       —                       —

(Loss) income before provision for income taxes and minority interest                                   (130 )                   (20 )                     5
Provision for income taxes                                                                                —                       —                       (1 )
(Loss) income before minority interest                 (130 )   (20 )   4
Minority interest in consolidated joint venture           2       1     —

Net (loss) income                                           )       )
                                                       (128 %   (19 %   4%


                                                  31
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                                                                                                                Fiscal Year Ended January 31,

                                                                                                         2002                2003               2004


Revenues by geography:
    Americas                                                                                               91 %               86 %               82 %
    Europe                                                                                                  7                 10                 12
    Asia Pacific                                                                                            2                  4                  6

                                                                                                          100 %              100 %              100 %


                                                                                                                Fiscal Year Ended January 31,

                                                                                                         2002                2003               2004


Stock-based expenses:
    Cost of revenues                                                                                        2%                  1%                1%
    Research and development                                                                                2                   1                 1
    Marketing and sales                                                                                     6                   3                 2
    General and administrative                                                                             10                   4                 1

Total stock-based expenses                                                                                 20 %                 9%                5%


Overview of Results of Operations for the Fiscal Year Ended January 31, 2004

      Revenues during fiscal 2004 were $96.0 million, an increase of 88 percent over fiscal 2003. Gross profit during this period was $78.8
million, or 82 percent of total revenues, and operating income was $3.7 million. Operating income included non-cash income of $3.4 million
related to the net reduction in accruals associated with office space that we had abandoned in fiscal 2002. Operating income also included
non-cash stock-based expense of $4.4 million. During fiscal 2003, we generated gross profit of $40.6 million, or 80 percent of revenues, and
incurred an operating loss of $10.5 million. The operating loss included $4.8 million of non-cash stock-based expense.

       The increase in revenues was primarily due to increases in the number of subscription customers, international expansion and expansion
of our consulting services and training offerings. During fiscal 2004, we continued to invest in our operations and increase revenues. We added
sales personnel to focus on adding new customers and increasing penetration within our existing customer base, professional services personnel
to support our consulting services and developers to broaden and enhance our on-demand service. With the increase in personnel and
international expansion efforts, we also added office space under various operating leases. In addition, we incurred costs associated with
corporate governance and regulatory compliance, such as required by the Sarbanes-Oxley Act of 2002. We intend to continue to invest heavily
in marketing and sales in order to pursue new customers and expand relationships with existing customers. We also plan to expand our
infrastructure, including additional geographically remote disaster recovery services provided by a third-party Web hosting service provider in
fiscal 2005, and to continue to invest in research and development activities to upgrade and extend our service offerings.

      During fiscal 2004, we generated $21.8 million of cash from operating activities, as compared to $5.2 million of cash from operating
activities during fiscal 2003. At January 31, 2004, we had cash, cash equivalents and short-term marketable securities of $35.8 million,
accounts receivable of $26.5 million and deferred revenue of $49.7 million.

      Fiscal Years Ended January 31, 2004 and 2003

      Revenues. Total revenues were $96.0 million for fiscal 2004, compared to $51.0 million during fiscal 2003, an increase of $45.0
million, or 88 percent. Subscription and support revenues were $85.8 million, or 89 percent of total revenues, for fiscal 2004, compared to
$47.7 million, or 93 percent of total revenues, for fiscal

                                                                       32
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2003. The increase in subscription and support revenues was due primarily to the increase in the number of paying subscribers to
approximately 127,000 as of January 31, 2004 from approximately 76,000 as of January 31, 2003. Professional services and other revenues
were $10.2 million, or 11 percent of total revenues, for fiscal 2004, compared to $3.3 million, or 7 percent of total revenues, for fiscal 2003.
The increase in professional service and other revenues was due primarily to the higher demand for services from an increasing number of
paying subscribers and customers.

      Revenues in Europe and Asia Pacific accounted for $17.1 million, or 18 percent of total revenues, during fiscal 2004, compared to $7.1
million, or 14 percent of total revenues, during fiscal 2003, an increase of $10.0 million, or 141 percent. The increase in revenues outside of the
Americas was the result of our efforts to expand the number of locations around the world where we conduct business and the expansion of our
international selling and marketing activities.

      Cost of Revenues . Cost of revenues was $17.3 million, or 18 percent of total revenues, during fiscal 2004, compared to $10.4 million,
or 20 percent of total revenues, during fiscal 2003, an increase of $6.9 million. The increase was primarily due to an increase of $5.4 million in
employee-related costs, substantially all of which was due to the 53 percent increase in the headcount of our professional services organization,
and an increase of $700,000 in service delivery costs. We increased the professional services headcount in order to meet the higher demand for
our consulting and training services as our customer base has expanded.

     The increase in our gross margin was the result of our ability to leverage our existing infrastructure to serve new customers and paying
subscribers.

      Research and Development . Research and development expenses were $7.0 million, or 7 percent of total revenues, during fiscal 2004,
compared to $4.6 million, or 9 percent of total revenues, during fiscal 2003, an increase of $2.4 million. The increase was primarily due to an
increase of $1.8 million in employee-related costs. Our research and development headcount increased by 57 percent from fiscal 2003 as we
added personnel to upgrade and extend our service offerings.

      Marketing and Sales . Marketing and sales expenses were $54.6 million, or 57 percent of total revenues, during fiscal 2004, compared
to $33.5 million, or 66 percent of total revenues, during fiscal 2003, an increase of $21.1 million. The increase was primarily due to an increase
of $18.0 million in employee-related costs, $1.0 million in increased marketing event costs, $800,000 in payments to partners, and $700,000 in
allocated overhead. Of the $18.0 million in increased employee-related costs, $6.6 million was related to sales commissions. Our marketing and
sales headcount increased by 42 percent from fiscal 2003 as we hired additional sales personnel to focus on adding new customers and
increasing penetration within our existing customer base.

      General and Administrative . General and administrative expenses were $16.9 million, or 18 percent of total revenues, during fiscal
2004, compared to $13.0 million, or 26 percent of total revenues, during fiscal 2003, an increase of $3.9 million. The increase was primarily
due to an increase of $3.0 million in employee-related costs and an increase of $900,000 in professional and outside service costs. Our general
and administrative headcount increased by 29 percent from fiscal 2003 as we added personnel to support our growth.

      Lease Recovery. In December 2001, we abandoned excess office space in San Francisco, California and recorded a $7.7 million charge
in the fourth quarter of fiscal 2002 pertaining to the estimated future net obligations under the non-cancelable lease. Since the space was not
leased to a subtenant, there were no immediate cash savings from the abandonment.

      In August 2003, we entered into an agreement, releasing us from future obligations for some of the space abandoned, in connection with
the landlord’s lease of this space to another tenant. Accordingly, we recorded a $4.3 million credit to reflect the reversal of the remaining
accrued liability that was directly associated with this space. During the fourth quarter of fiscal 2004, we recorded an additional accrual of
$900,000 related to the

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remaining 5,000 square feet of abandoned office space in San Francisco. This additional accrual resulted from a revision of our estimates of the
timing and amount of projected subtenant income based on difficulties in subleasing the remaining space.

      Operating Income (Loss). Operating income during fiscal 2004 was $3.7 million and included the $3.4 million lease recovery
described above. The operating loss during fiscal 2003 was $10.5 million. The increase in operating income was primarily due to a $45.0
million increase in revenues, most of which was re-invested in an effort to expand our business.

      Loss from operations outside of the Americas was $1.1 million during fiscal 2004 and was $3.8 million during fiscal 2003. The continued
losses outside of the Americas were due to our efforts in expanding the number of locations where we conduct business and expanding our
international selling and marketing activities.

      Interest Income . Interest income consists of investment income on cash and marketable securities balances and interest income on
outstanding loans made to individuals who early exercised their stock options. Interest income was $400,000 during fiscal 2004, compared to
$500,000 during fiscal 2003, a decrease of $100,000. The decrease was primarily due to declining interest rates and the mix of marketable
securities investments, substantially offset by higher cash and marketable securities balances.

      Interest Expense .   Interest expense consists of interest on our capital lease obligations.

     Other Income. Other income was $200,000 during fiscal 2004, compared to other income of $100,000 during fiscal 2003. The increase
of $100,000 was due to realized gains on foreign currency transactions.

      Provision for Income Taxes . The provision for income taxes of $500,000 during fiscal 2004 represented federal alternative minimum
taxes of $200,000, and various state income taxes and foreign withholding taxes of $300,000.

      Our deferred tax asset balance at January 31, 2004 was $19.7 million and was fully offset by a valuation allowance of the same amount
due to uncertainties regarding realization of the deferred tax asset balance. While we have considered future taxable income and ongoing
prudent and feasible tax planning strategies in assessing the need for the valuation allowance, in the event we were to determine that we would
be able to realize our deferred tax assets in the future in excess of our net recorded amount, an adjustment to the deferred tax asset would
increase our net income or reduce our net loss and increase stockholders’ equity in the quarter when such determination is made.

      Minority Interest in Consolidated Joint Venture . The minority interest expense was $200,000 during fiscal 2004 compared to minority
interest income of $300,000 during fiscal 2003.

      Fiscal Years Ended January 31, 2003 and 2002

      Revenues. Total revenues were $51.0 million in fiscal 2003 compared to $22.4 million in fiscal 2002, an increase of $28.6 million, or
128 percent. Subscription and support revenues were $47.7 million, or 93 percent of total revenues, in fiscal 2003, compared to $21.5 million,
or 96 percent of total revenues, during fiscal 2002. The increase in subscription and support revenues was due primarily to the increase in the
number of paying subscribers to approximately 76,000 as of January 31, 2003 from approximately 53,000 as of January 31, 2002. During fiscal
2003, we began offering consulting services. The growth in the number of paying subscribers and customers increased demand for our
consulting, support and training services. Professional services and other revenues were $3.3 million, or 7 percent of total revenues in fiscal
2003, compared to $900,000, or 4 percent of total revenues, in fiscal 2002.

      Revenues in Europe and Asia Pacific accounted for $7.1 million, or 14 percent of total revenues, in fiscal 2003, compared to $2.1 million,
or 9 percent of total revenues, in fiscal 2002, an increase of $5.0 million, or

                                                                         34
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238 percent. The increase in revenues outside of the Americas was the result of our efforts to expand the number of locations around the world
where we conduct business and the expansion of our international selling and marketing activities.

       Cost of Revenues . Cost of revenues was $10.4 million, or 20 percent of total revenues, in fiscal 2003, compared to $6.0 million, or 27
percent of total revenues, in fiscal 2002, an increase of $4.4 million. The increase was primarily due to an increase of $2.2 million in
employee-related costs, $1.9 million of which resulted from the hiring of employees for our consulting services, and increases of $1.2 million
in service delivery costs, $400,000 in allocated overhead and $300,000 in depreciation and amortization expense. We increased the professional
services headcount in order to provide the increased number of customers with consulting services and training that were complementary to
their subscription service.

     Research and Development . Research and development expenses were $4.6 million, or 9 percent of total revenues, in fiscal 2003,
compared to $5.3 million, or 24 percent of total revenues, in fiscal 2002, a decrease of $700,000. The decrease was primarily due to reductions
of $200,000 in employee-related costs and $200,000 in allocated overhead because of a lower proportion of research and development
headcount to our total headcount and an increase of $200,000 in the capitalization of development costs.

      Marketing and Sales. Marketing and sales expenses were $33.5 million, or 66 percent of total revenues, in fiscal 2003, compared to
$24.6 million, or 110 percent of total revenues, in fiscal 2002, an increase of $8.9 million. The increase was primarily due to an increase of
$10.3 million in employee-related costs and commission expense and an increase of $200,000 in allocated overhead, offset in part by $2.4
million of lower advertising spending. Our marketing and sales headcount increased by 160 percent from the same period a year ago as we
hired additional sales personnel to focus on adding new customers and increasing the number of paying subscribers within our existing
customer base.

      General and Administrative. General and administrative expenses were $13.0 million, or 26 percent of total revenues, in fiscal 2003,
compared to $8.3 million, or 37 percent of total revenues, in fiscal 2002, an increase of $4.7 million. The increase was due primarily to an
increase of $1.9 million in employee-related costs, $1.2 million in increased professional and outside service costs and $400,000 in
depreciation expense. Our general and administrative headcount increased by 158 percent from the same period a year ago as we added
personnel to support our growth.

      Operating Loss. The operating loss during fiscal 2003 was $10.5 million and the operating loss during fiscal 2002 was $29.5 million,
of which $7.7 million was attributable to the lease abandonment of office space. The smaller operating loss during fiscal 2003 was primarily
due to a $28.6 million increase in revenues, most of which was re-invested in an effort to expand our business.

      Loss from operations outside of the Americas was $3.8 million during fiscal 2003 and was $3.3 million during fiscal 2002. The continued
losses outside of the Americas were due to expanding the number of locations where we conduct business and expanding our international
selling and marketing activities.

     Interest Income . Interest income was $500,000 in fiscal 2003 compared to $800,000 in fiscal 2002, a decrease of $300,000. The
decrease was primarily due to declining interest rates, partially offset by higher cash and marketable securities balances.

       Interest Expense .   Interest expense associated with our capital lease obligations was $100,000 in fiscal 2003 compared to $300,000 in
fiscal 2002.

      Other Income (Expense).       Other income was $100,000 in fiscal 2003 and consisted primarily of realized gains on foreign currency
transactions.

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       Minority Interest in Consolidated Joint Venture . The minority interest income was $300,000 in fiscal 2003 compared to $400,000 in
fiscal 2002.

Quarterly Results of Operations

      The following tables set forth selected unaudited quarterly consolidated statement of operations data for the eight most recent quarters, as
well as the percentage of total revenues for each line item shown. The information for each of these quarters has been prepared on the same
basis as the audited consolidated financial statements included in this prospectus and, in the opinion of management, includes all adjustments
necessary for the fair presentation of the results of operations for such periods. This data should be read in conjunction with the audited
consolidated financial statements and the related notes included in this prospectus. These quarterly operating results are not necessarily
indicative of our operating results for any future period.

      In fiscal 2002, we changed our method of accounting for sales commissions on noncancelable customer contracts to defer and recognize
such costs over the noncancelable terms of the related contracts. We erroneously characterized the change in policy as a change in accounting
estimate and applied the deferral and amortization policy only to noncancelable subscription arrangements that were entered into after February
1, 2002. Upon review, we concluded that the change to the deferral and amortization method was a change in accounting principle and not a
change in accounting estimate. Accordingly, to correct this error, we restated previously reported fiscal 2002, 2003 and the first three quarters
of 2004 results as though the new method had been retroactively applied as of May 1, 2001, which is when we began to enter into
noncancelable subscription arrangements with our customers. As a result of this restatement of previously reported results to defer
commissions associated with noncancelable subscription contracts, we increased our fiscal 2003 net loss by $377,000, of which $158,000,
$126,000, $73,000 and $20,000 of additional expense was recorded in the first, second, third and fourth quarters, respectively. The impact on
our fiscal 2004 results was $72,000, $59,000, $40,000 and $18,000 of additional expense recorded in the first, second, third and fourth quarter,
respectively.

     As such, the consolidated financial statements and the following quarterly results of operations information for all quarters in fiscal 2003
and 2004 are presented using the same basis of accounting for sales commissions.

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                                                                                   Quarter Ended

                                     Apr. 30,       Jul. 31,     Oct. 31,         Jan. 31,          Apr. 30,          Jul. 31,          Oct. 31,
                                     2002, As      2002, As      2002, As         2003, As          2003, As         2003, As           2003, As         Jan. 31,
                                     Restated      Restated      Restated         Restated          Restated         Restated           Restated          2004

                                                                                     (unaudited)
                                                                                   (in thousands)
Revenues:
    Subscription and support     $      8,810     $ 11,275      $ 12,937         $ 14,634       $ 16,922         $ 19,592           $ 22,480         $ 26,802
    Professional services and
      other                               541            608        1,254              932             1,991            2,031              2,954            3,251

           Total revenues               9,351        11,883        14,191           15,566            18,913           21,623             25,434          30,053

Cost of revenues:
     Subscription and support           1,451         1,517         2,352            1,879             1,597            1,819              2,143            2,223
     Professional services and
       other                              292            635          859            1,378             1,758            2,009              2,525            3,199

           Total cost of
             revenues                   1,743         2,152         3,211            3,257             3,355            3,828              4,668            5,422

Gross profit                            7,608         9,731        10,980           12,309            15,558           17,795             20,766          24,631
Operating expenses:
    Research and development            1,075         1,173         1,105            1,295             1,240            1,685              1,880           2,157
    Marketing and sales                 5,975         7,413        10,039           10,095            10,656           12,205             14,597          17,142
    General and
       administrative                   2,192         2,531         4,709            3,526             3,645            3,771              4,320            5,179
    Lease abandonment
       (recovery)                           —              —            —                —                 —                —             (4,342 )            897

           Total operating
             expenses                   9,242        11,117        15,853           14,916            15,541           17,661             16,455          25,375
(Loss) income from operations          (1,634 )      (1,386 )      (4,873 )         (2,607 )              17              134              4,311            (744 )
Interest income                           114           142           129               86                78               91                 89             121
Interest expense                          (25 )         (26 )         (15 )            (11 )              (9 )             (6 )               (5 )            (2 )
Other income (expense)                    (60 )          67          (137 )            228               315              (70 )              (38 )           (43 )

(Loss) income before provision
  for income taxes and
  minority interest                    (1,605 )      (1,203 )      (4,896 )         (2,304 )             401               149             4,357             (668 )
Provision for income taxes                 —             —             —                —                 49                22               455               15

(Loss) income before minority
  interest                             (1,605 )      (1,203 )      (4,896 )         (2,304 )             352               127             3,902             (683 )
Minority interest in
  consolidated joint venture                43             77           55             117                 16                (5 )           (113 )             (82 )

Net (loss) income                $ (1,562 )       $ (1,126 )    $ (4,841 )       $ (2,187 )     $        368     $         122      $      3,789     $       (765 )


                                                                            37
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      As a percentage of total revenues:
                                                                               Quarter Ended

                                   Apr. 30,       Jul. 31,       Oct. 31,       Jan. 31,       Apr. 30,     Jul. 31,        Oct. 31,     Jan. 31,
                                    2002           2002           2002           2003           2003         2003            2003         2004

                                                                                 (unaudited)
Revenues:
  Subscription and support                 94 %         95 %           91 %           94 %           89 %         91 %            88 %         89 %
  Professional services and
    other                                   6                5          9              6             11                9          12           11

     Total revenues                    100            100            100            100            100          100             100          100

Cost of revenues:
  Subscription and support                 16           12             17             12              8                8           8            7
  Professional services and
     other                                  3                6          6              9             10           10              10           11

     Total cost of revenues                19           18             23             21             18           18              18           18

  Gross profit                             81           82             77             79             82           82              82           82
Operating expenses:
  Research and development                 11           10              8              8              7            8               8            7
  Marketing and sales                      64           62             70             65             56           56              57           57
  General and administrative               24           21             33             23             19           17              17           17
  Lease abandonment
    (recovery)                             —            —              —              —              —            —              (17 )          3

     Total operating expenses            99             93           111              96             82           81              65           84
(Loss) income from operations           (18 )          (11 )         (34 )           (17 )           —             1              17           (2 )
Interest income                           1              1             1               1              1           —               —            —
Interest expense                         —              —             —               —              —            —               —            —
Other income (expense)                   —              —             (1 )             1              1           —               —            —

(Loss) income before
  provision for income taxes
  and minority interest                 (17 )          (10 )          (34 )          (15 )           2            1               17           (2 )
Provision for income taxes               —              —              —              —              —            —               (2 )         —

(Loss) income before minority
  interest                              (17 )          (10 )          (34 )          (15 )            2                1          15           (2 )
Minority interest in
  consolidated joint venture               —                 1         —               1             —            —               —            (1 )

Net (loss) income                           )              )              )              )                                                        )
                                        (17 %           (9 %          (34 %          (14 %            2%               1%         15 %         (3 %


     Revenues increased sequentially in each of the quarters presented, due to increases in the number of subscription customers, international
expansion and the expansion of our consulting services and training offerings. The 106 percent increase in professional services and other
revenues for the quarter ended October 31, 2002 over the preceding quarter reflected the formal introduction of our consulting services
operation over the second and third quarters of fiscal 2003 and continued growth in the size of our customer base.

      Gross profit in absolute dollars also generally increased sequentially for the quarters presented due primarily to revenue growth. As a
percentage of revenues, gross margins have remained constant at 82 percent during the four most recent quarters presented. The $800,000
increase in cost of subscription and support revenues for the quarter ended October 31, 2002 over the preceding quarter was primarily due to
investments made to improve the delivery of our on-demand service. The $300,000 decrease in cost of subscription and support revenues for
the quarter ended April 30, 2003 over the preceding quarter was primarily the result of our ability to leverage our infrastructure to serve new
customers and paying subscribers.
      Operating expenses in total have fluctuated between quarters due to the timing of employee-related spending, new on-demand application
service offerings and marketing events. For example, marketing and sales expenses for the quarter ended October 31, 2002 increased by $2.6
million over the preceding quarter, primarily

                                                                    38
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due to the hiring of additional sales personnel. General and administrative expenses for the quarter ended October 31, 2002 increased by $2.2
million over the preceding quarter primarily due to stock compensation expenses associated with warrants that we issued and the costs
associated with hiring additional staff. Additionally, operating income for the quarter ended October 31, 2003 included non-cash income of
$4.3 million related to the release of future obligations associated with office space that we abandoned in fiscal 2002.

       Our quarterly operating results are likely to fluctuate, and if we fail to meet or exceed the expectations of securities analysts or investors,
the trading price of our common stock could decline. Some of the important factors that could cause our revenues and operating results to
fluctuate from quarter to quarter include:

            our ability to retain and increase sales to existing customers, attract new customers and satisfy our customers’ requirements;

            the renewal rates for our service;

            changes in our pricing policies;

            the introduction of new features to our service;

            the rate of expansion and effectiveness of our sales force;

            the length of the sales cycle for our service;

            new product and service introductions by our competitors;

            seasonality in our markets;

            our success in selling our service to large enterprises;

            variations in the mix of editions of our service;

            technical difficulties or interruptions in our service;

            general economic conditions in our geographic markets;

            additional investment in our service or operations; and

            regulatory compliance costs.

The occurrence of one or more of these factors might cause our operating results to vary widely. As such, we believe that quarter-to-quarter
comparisons of our revenues and operating results may not be meaningful and should not be relied upon as an indication of future
performance.

Liquidity and Capital Resources

      At January 31, 2004, our principal sources of liquidity were cash, cash equivalents and short-term marketable securities totaling $35.8
million and accounts receivable of $26.5 million.

      From our inception in February 1999 through the end of fiscal 2002, we funded our operations primarily through issuances of convertible
preferred stock, which provided us with aggregate net proceeds of $61.1 million. Since the end of fiscal 2002, we have funded our operations
through cash flow generated by the operating activities of our business.

      Net cash provided by operating activities was $21.8 million during fiscal 2004 and $5.2 million during fiscal 2003. These amounts
compare favorably to the operating cash deficit of $13.2 million during fiscal 2002. The improvement in cash flow was due primarily to the
increased number of paying subscribers to our service. Cash provided by or used in operating activities has historically been affected by sales
of subscriptions, support and professional services, changes in working capital accounts, particularly increases in deferred revenue, and
add-backs of non-cash expense items such as depreciation and amortization and the expense associated with stock-based awards.

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     Net cash used in investing activities was $21.1 million during fiscal 2004, $9.6 million during fiscal 2003 and $700,000 during fiscal
2002. These amounts primarily related to the investment of excess cash in high quality, investment grade fixed income securities and capital
expenditures associated with computer equipment and furniture and fixtures in support of expanding our infrastructure and work force.

      Net cash provided by financing activities was $1.1 million during fiscal 2004, primarily consisting of proceeds from employee stock
option exercises. Net cash provided by financing activities was $1.0 million during fiscal 2003 and $3.5 million during fiscal 2002. The
proceeds from stock option exercises and the proceeds from the sale of stock by our Japanese joint venture in these years were offset by
principal payments on capital lease obligations and the repurchase of unvested shares of common stock from terminated employees.

       During fiscal 2001, we established a $3.5 million letter of credit in favor of our principal office landlord. This letter of credit is
collateralized by a certificate of deposit, which is maintained at the granting financial institution, for the same amount. We have reflected this
certificate of deposit as restricted cash on our consolidated balance sheet. As of January 31, 2004, the letter of credit was outstanding and, to
date, no amounts have been drawn against it. The letter of credit renews annually through December 31, 2010.

       In addition, we had two letters of credit outstanding as of January 31, 2004, both of which are collateralized by certificates of deposit
totaling $400,000 at the granting financial institution, for the same amount. Both letters of credit have renewal provisions and expire at various
dates through June 2006.

      We do not have any special purpose entities, and other than operating leases for office space and computer equipment, which are
described below, we do not engage in off-balance sheet financing arrangements. Additionally, we currently do not have a bank line of credit.

      Our principal commitments consist of obligations under leases for office space, computer equipment and furniture and fixtures. We also
have long-term liabilities related primarily to lease abandonments. At January 31, 2004, the future minimum payments under these
commitments as well as our long-term liability were as follows:
                                                                                             Payments Due by Period

                                                                                 Less than               1-3            3-5        More than
        Contractual Obligations                                   Total           1 Year                Years          Years        5 Years

                                                                                                 (in thousands)
        Capital lease obligations                             $       80        $      80
        Operating lease obligations                               38,715            8,192            $ 12,170         $ 8,343     $ 10,010
        Contractual commitments                                    1,450            1,450
        Lease abandonment liabilities and other                    2,307              477                    804          481            545

      Purchase orders are not included in the table above. Our purchase orders represent authorizations to purchase rather than binding
agreements. For purposes of the contractual commitment amounts in the table above, these are amounts associated with agreements that are
enforceable and legally binding and that specify all significant terms, including: fixed or minimum services to be used; fixed, minimum or
variable price provisions; and the approximate timing of the transaction. Obligations under contracts in which we can cancel without a
significant penalty are not included in the table above.

      We believe our existing cash, cash equivalents and short-term marketable securities and cash provided by operating activities will be
sufficient to meet our working capital and capital expenditure needs over the next 12 months. Our future capital requirements will depend on
many factors, including our rate of revenue growth, the expansion of our marketing and sales activities, the timing and extent of spending to
support product development efforts and expansion into new territories, the timing of introductions of new services and enhancements to
existing services, and the continuing market acceptance of our services. To the extent that funds generated by this public offering, together with
existing cash and securities and cash from operations, are

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insufficient to fund our future activities, we may need to raise additional funds through public or private equity or debt financing. Although we
are currently not a party to any agreement or letter of intent with respect to potential investments in, or acquisitions of, complementary
businesses, services or technologies, we may enter into these types of arrangements in the future, which could also require us to seek additional
equity or debt financing. Additional funds may not be available on terms favorable to us or at all.

Quantitative and Qualitative Disclosures about Market Risk

      Foreign currency exchange risk

      Our results of operations and cash flows are subject to fluctuations due to changes in foreign currency exchange rates, particularly
changes in the Euro, British pound, Canadian dollar and Japanese yen. We have a risk management policy that allows us to utilize foreign
currency forward and option contracts to manage currency exposures that exist as part of our ongoing business operations. To date, we have not
entered into any hedging contracts since exchange rate fluctuations have had little impact on our operating results and cash flows.

     If we were to enter into hedging contracts, the contracts by policy would have maturities of less than three months and settle before the
end of each quarterly period. Additionally, by policy we would not enter into any hedging contracts for trading or speculative purposes.

      Interest rate sensitivity

      We had unrestricted cash, cash equivalents and short-term marketable securities totaling $35.8 million at January 31, 2004 and $16.0
million at January 31, 2003. These amounts were invested primarily in money market funds and high quality, investment grade, variable-rate
municipal bonds. The unrestricted cash, cash equivalents and short-term marketable securities are held for working capital purposes. We do not
enter into investments for trading or speculative purposes. Due to the short-term nature of these investments, we believe that we do not have
any material exposure to changes in the fair value of our investment portfolio as a result of changes in interest rates. Declines in interest rates,
however, will reduce future investment income.

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                                                                    BUSINESS

Overview

      Salesforce.com is the leading provider, based on market share, of application services that allow organizations to easily share customer
information on demand, according to a March 2004 report by Forrester Research, Inc. We provide a comprehensive customer relationship
management, or CRM, service to businesses of all sizes and industries worldwide. By designing and developing our service to be a low-cost,
easy-to-use application that is delivered through a standard Web browser, we substantially reduce many of the traditional expenses and
complexities of enterprise software implementations. As a result, our customers incur less risk and lower upfront costs. Our service helps
customers more effectively manage critical operations including: sales force automation; customer service and support; marketing automation;
document management; analytics; and custom application development. We market our services to businesses on a subscription basis,
primarily through our direct sales efforts and also indirectly through partners. From the introduction of our service in February 2000 through
January 31, 2004, our customer base had grown to approximately 8,700, and these customers had purchased an aggregate of over 127,000
paying subscriptions in approximately 70 countries. We define paying subscriptions as unique user accounts, purchased by customers for use
by their employees and other customer-authorized users, that have not been suspended for non-payment.


Industry Background

      The Enterprise Application Software Market

      Advances in computing and communications technology have enabled businesses to automate and improve their basic business processes.
Many businesses have purchased, built and deployed a wide range of enterprise software applications in such areas as enterprise resource
planning, or ERP, and CRM. While technology improvements have brought increased processing power and functionality to enterprise
software applications, businesses have been challenged to realize the benefits of these applications for a variety of reasons, including the
following:

            Difficulty of deployment . The increasing number and complexity of applications, operating systems, networks and computer
             systems have made it difficult and time consuming for businesses to implement and use enterprise software applications.

            High cost of ownership . Enterprise software applications carry a high total cost of ownership. Customers must make significant
             investments, both initially and on an ongoing basis, in applications and IT infrastructure, including computer systems, networks,
             software licenses and maintenance. Additionally, customers typically must employ costly IT staff and consultants to deploy,
             integrate, customize, support, administer and upgrade these applications.

      In an attempt to address these challenges, many enterprise software application vendors have adapted their products to be accessible over
the Internet. However, as these products were not originally designed to be delivered over the Internet as a service, they have failed to address
these challenges. In addition, because they are not easy-to-use, users have been hesitant to adopt these complex, non-intuitive applications.

      Emergence of On-Demand Application Services

     The pervasiveness of the Internet, along with the dramatic declines in the pricing of computing technology and network bandwidth, have
enabled a new generation of enterprise computing in which substantial components of IT infrastructure can be provisioned and delivered
dynamically on an outsourced basis. This new computing paradigm is sometimes referred to as utility computing, while the outsourced
software applications are referred to as on-demand application services. On-demand application services enable businesses to subscribe to a
wide variety of application services that are developed specifically for, and delivered over, the Internet on an as-needed basis with little or no
implementation services required and without the need to install and manage third-party software in-house.

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      Key attributes of successful on-demand application services include:

            a fully outsourced service accessible over the Internet;

            rapid and simple deployment, configuration and training;

            a comprehensive set of application features;

            a scalable, secure and reliable application architecture that can economically support tens of thousands of customers
             simultaneously;

            the ability to integrate with businesses’ existing third-party and internally developed enterprise applications and databases; and

            the ability to tailor the appearance, policy settings, workflow and other characteristics of the service to meet the needs of a diverse
             customer base.

       On-demand application services contrast with the traditional enterprise software model, which requires each customer to install,
configure, manage and maintain the hardware, software and network services to implement the software application in-house. Enterprise
software vendors must maintain support for numerous legacy versions of their software and compatibility with a wide array of hardware
devices and operating environments. These services also contrast with solutions offered by first-generation application service providers,
commonly referred to as ASPs, which host third-party enterprise applications on behalf of their customers. Since these ASPs are deploying
traditional third-party software applications with each customer typically running on a separate instance, or copy, of the software, ASPs remain
challenged by the time and expense problems associated with purchasing, implementing, integrating, maintaining and supporting these
applications. Additionally, because ASP hosting typically involves the installation of one dedicated server or set of servers to support a small
number of customers, ASPs are challenged to cost-effectively scale to support a larger customer base.

      We believe the shift to on-demand application services will provide significant benefits by reducing the risks and lowering the costs of
purchasing and deploying information technology resources, managing software and hardware upgrades, and hiring expensive IT personnel to
maintain applications. As a result, we believe the emergence of on-demand application services will bring about a fundamental transformation
in the enterprise software industry as businesses will be able to replace their purchased software with subscriptions to a wide range of
application services. The market for on-demand application services is projected to grow from $425 million in 2002 to $2.6 billion in 2007,
which represents a compounded annual growth rate of 44 percent, according to a May 2003 IDC report.

      The Opportunity for On-Demand CRM Application Services

       One category of enterprise software applications in which businesses have made significant investments is CRM. CRM software is
intended to enable businesses to automate three key functional areas: sales, customer service and support and marketing. The objective of CRM
is to improve interactions with customers by providing a means for managing, accessing and analyzing information regarding all aspects of a
company’s interactions with its customers. In 2002, the market for CRM software was approximately $7.1 billion, according to a July 2003
IDC report.

      The difficulties that companies have faced in deploying and maintaining enterprise software applications in general are particularly
relevant to CRM. Despite the significant potential benefits that can be attained from CRM, many enterprises have failed to successfully deploy
the CRM software they have purchased.

      In a December 2002 study by AMR Research, an independent market research firm, AMR Research interviewed 80 of the top 12 CRM
vendors’ premier reference accounts as identified by AMR Research. According to a June 2003 report by AMR Research referencing this
study, 12 percent of CRM projects failed to ever be implemented, usually for technical reasons. An additional 47 percent of projects had
significant end-user

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adoption problems even though the projects were successful from a technical implementation standpoint. Finally, another 25 percent of projects
met technical and user standards but did not provide value because they were either only as good as the replaced systems or the benefits were
difficult to define.

      We believe that traditional CRM applications have generally suffered from the following challenges:

            Low deployment rates and low user adoption . Customers have been reluctant to deploy traditional CRM applications because of
             the complexity involved in implementing them and because end users have not been willing to invest the considerable time and
             effort required to learn to use traditional CRM applications.

            Lack of ubiquitous access . Given the mobility and geographic diversity of most enterprise sales organizations, ubiquitous access
             to customer information and application functionality is critical to the effectiveness of CRM applications. As enterprise CRM
             software application functionality has not been available or has been difficult to access over the Internet and through laptops,
             PDAs and wireless devices, full realization of the benefits of sharing access to information and resources has been hindered.

            Low return on investment . The cost, time and effort required to implement an enterprise CRM application, combined with low
             user adoption, have made it difficult for companies to quickly, or ever, realize the benefits of their investment.

            Inability to serve all businesses . Many small and medium-sized businesses seeking the benefits of CRM have been unable to
             afford the costs associated with traditional enterprise software applications.

      We believe that the CRM market is one of the first markets to benefit from the new on-demand application services delivery model. As a
result of the high total cost of ownership, low deployment and usage rates, and poor return on investment of traditional CRM software, we
believe that businesses are especially open to a new delivery model for CRM. The emergence of on-demand application services, combined
with the deficiencies associated with traditional CRM software applications, have created an opportunity for a vendor that can provide
on-demand CRM application services that have been specifically designed and built to be delivered over the Internet.

Our Solution

      We are the leading provider of on-demand CRM delivered over the Internet as an application service, helping companies better track and
manage their sales, customer service and support and marketing operations. We provide our service to businesses through our proprietary,
scalable and secure multi-tenant application architecture, which allows us to serve large numbers of customers cost-effectively by leveraging a
single instance of our application for multiple customers. By subscribing to our service, our customers do not have to make large and risky
upfront investments in software, additional hardware, extensive implementation services, and additional IT staff. As a result, our service
enables businesses to achieve higher productivity from, and a lower total cost of ownership for, their CRM solutions.

      Key advantages of our solution include:

            Rapid deployment. Our service can be deployed rapidly and provisioned easily, since our customers do not have to spend time
             installing or maintaining the servers, networking equipment, security products or other infrastructure hardware and software
             necessary to ensure a scalable and reliable service. We believe the average time that a customer requires to deploy our service is
             significantly shorter than typical traditional CRM software deployments. We also offer complementary consulting and training
             services to assist customers in rapidly deploying and optimizing their use of our service.

            Enable high levels of user adoption. We have designed our service to be easy-to-use and intuitive. Since our service contains
             many tools and features recognizable to users of popular websites such as

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             those of Amazon.com, eBay and Yahoo!, it has a more familiar interface than typical CRM enterprise applications. As a result, our
             users do not require substantial training on how to use and benefit from our service. We conduct extensive surveys of our users to
             gauge their experiences with our service so that we may determine potential areas of improvement. In addition, because of the
             nature of our service, we receive automatic feedback as to which features customers use.

            Lower total cost of ownership. We enable customers to achieve significant savings relative to the traditional enterprise software
             model. Our service enables customers to automate sales, customer service and support and marketing processes without having to
             make large and risky upfront investments in software, hardware and implementation services, and additional IT staff. In addition,
             because all upgrades are implemented by us on our servers they automatically become part of our service and therefore benefit all
             of our customers immediately.

            Extensive features, functionality and configurability. We offer a comprehensive array of CRM features that meet the needs of
             businesses of any size. Our service supports the three key functional areas within CRM—sales, customer service and support and
             marketing automation. We also offer additional functionality such as file and document management capabilities, which enable
             businesses to centralize the storage and retrieval of customer-related documents. Furthermore, most features of our service can be
             accessed through a variety of devices, including laptop computers, PDAs and wireless devices. For example, we offer an offline
             version of our service that can be used on any PC or laptop and a wireless version for mobile access via wireless devices. Finally,
             our service is highly configurable, enabling our customers to tailor its appearance, policy settings, language, workflow and other
             characteristics without the use of significant IT resources or consultants.

            Secure, scalable and reliable delivery platform. The delivery platform for our service has been designed to provide our
             customers with high levels of reliability, performance and security. The IT systems within our data center have fail-over
             redundancy. We have built a comprehensive security infrastructure, including firewalls, intrusion detection systems and encryption
             for transmissions over the Internet, which we monitor and test on a regular basis. We built and maintain a multi-tenant application
             architecture that has been designed to enable our service to scale securely, reliably and cost-effectively to tens of thousands of
             customers and millions of users. Our multi-tenant application architecture maintains the integrity and separation of customer data
             while still permitting all customers to use the same application functionality simultaneously. Our architecture also enables us to
             segment access privileges across our user base.

            Ease of integration. Our platform is designed to enable IT professionals to integrate our service with existing applications
             quickly and seamlessly. Our sforce platform provides a set of APIs that enable customers and independent developers to integrate
             our service with existing third-party, custom and legacy applications and write their own application services that integrate with
             our service. For example, many of our customers use the sforce APIs to move customer-related data from custom-developed and
             legacy applications into our service on a periodic basis to provide greater visibility into their activities. In addition, through our
             relationship with TIBCO Software, our salesforce.com Integration Server enables our customers to quickly integrate their existing
             software applications with our service using custom-built connectors.

Our Strategy

      Our objective is to be the leading provider of on-demand application services for businesses worldwide. Key elements of our strategy
include:

            Continue to lead the industry transformation to on-demand application services. We believe that the market transformation to
             on-demand application services enabled by utility computing is an emerging trend in the technology industry. We believe we have
             established a leadership position in this new industry both as a successful vendor of on-demand application services and also as a
             key thought leader helping to define the architecture and vision of utility computing. We seek to extend our leadership

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             position in this industry by continuing to innovate and bring new on-demand application services and value-added technologies to
             market.

            Strengthen and extend our service offering. We designed our service to easily accommodate new features and functions as well
             as the release of entirely new application services. For example, while our service in 2000 offered only sales force automation
             functionality, by 2002 we had added marketing automation and customer support functionality. More recently, we added file and
             document management capabilities and enhanced analytics tools to enable businesses to track and analyze data to better understand
             the health of their customer relationships. We intend to continue to add CRM features and functionality to our service that we will
             make available to customers at no additional charge. For example, in our most recent release, we added contract management,
             dashboards and workflow automation. We may also offer advanced modules for an additional subscription fee to customers that
             require enhanced CRM capabilities. In addition to accommodating new CRM features, we believe that our technology
             infrastructure is able to support entirely different, non-CRM application capabilities.

            Pursue new customers and new territories aggressively. We believe that our on-demand CRM application service provides
             significant value for businesses of any size, from small businesses to the largest Fortune 500 corporations. As a result, we will
             continue to aggressively target businesses of all sizes, primarily through our direct sales force. We have steadily increased and plan
             to continue to increase the number of direct sales professionals we employ, and we intend to develop additional distribution
             channels for our service. We have created several editions of our service to address the distinct requirements of businesses of
             different sizes. We also believe that there is a substantial market opportunity for our service outside of North America. We plan to
             continue to aggressively market to customers outside of North America by recruiting local sales and support professionals,
             building partnerships that help us add customers in these regions and increasing the number of languages we support. As of
             January 31, 2004, we offered our service in 11 languages and had paying subscriptions in approximately 70 countries.

            Deepen relationships with our existing customer base. We believe there is significant opportunity to leverage our relationships
             with existing customers. We seek to attract more users from existing customers by targeting additional functional areas and
             business units within the customer organization, pursuing enterprise-wide deployments and providing consulting offerings that are
             complementary to our service. In addition, by continuously enhancing the functionality of our service, we believe that customers
             will find more uses for our service and therefore purchase additional subscriptions, continue to renew their existing subscriptions
             and upgrade to more fully featured versions such as our Enterprise Edition.

            Encourage the development of third-party applications on our sforce platform.        Our sforce platform enables existing customers
             and third-party developers to develop and deliver applications complementary to our core service offering. Sforce enhances the
             attractiveness of our service, particularly to enterprise customers, by enabling them to accelerate the integration of our service with
             their existing applications. We plan to continue to augment the sforce tools and services we provide to developers and foster their
             development of new applications.

The salesforce.com Service

      We provide a comprehensive array of on-demand CRM application services for businesses of all sizes and industries worldwide. These
services enable companies and individuals to systematically record, store and act upon customer data, helping businesses manage their
customer accounts, track sales leads, evaluate marketing campaigns and provide post-sales service. We also enable companies to generate
reports and summaries of this data and share them with authorized employees across functional areas. CRM includes sales, customer service
and support and marketing automation:

            Sales force automation enables salespeople to be more productive by automating manual and repetitive tasks and providing them
             with better, more organized data about their current and prospective

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             customers. It permits companies to establish a system and a process for recording, tracking and sharing information about sales
             opportunities, sales leads, sales forecasts, the sales process and closed business.

            Customer service and support automation allows companies to interact better, more efficiently and professionally with their
             existing customers in a variety of areas, such as requests for repairs, advice about products and services, complaints about faulty
             goods, warranty management and the need for additional goods and services.

            Marketing automation enables companies to manage marketing campaigns from initiation through the development of leads that
             are passed to the sales team and enables them to determine the effectiveness of each campaign by quantifying the revenue
             generated as a result of specific marketing activities.

      We offer three principal editions of our service: Enterprise Edition, Professional Edition and Team Edition.

      Enterprise Edition . Enterprise Edition is our most fully featured service offering and is targeted primarily at large companies that have
several different divisions or departments. It includes many administrative features that are particularly useful to large companies, such as
workflow, the ability to customize views for different departments and a set of controls that allows a system administrator to designate which
users have access and modification rights to the different types of information within the system. It also includes a Web services-standard XML
API that enables companies to readily integrate our CRM service with ERP applications, Web services and other data sources and a weekly
export service that permits a customer to download all data input by users into the service in a machine-readable format. It also includes our
offline and wireless features that permit users to access information through laptops, PDAs and wireless devices.

      Professional Edition . Professional Edition is targeted primarily at medium-sized and large businesses that need a robust CRM solution
but do not need some of the more advanced administrative features and integration capabilities of Enterprise Edition. The offline and selected
other features of Enterprise Edition that are not included in Professional Edition are available to Professional Edition customers for an
additional charge.

      Team Edition . Team Edition is targeted primarily at small businesses that seek a robust sales force automation solution without the
more sophisticated features that are required by larger companies, such as integration, analytics and workflow. Team Edition includes sales
force automation and case management but does not include customer service and support or marketing automation features.

       Enterprise Edition, Professional Edition and Team Edition offer customizable fields and pick lists, customizable reports and customizable
list views. Enterprise Edition and Professional Edition also offer multi-language support and multi-currency support. The amount of storage
offered for each edition also varies. We derived more than 90 percent of our revenues in fiscal 2002 and 2003 and 89 percent of our revenues in
fiscal 2004 from subscriptions to and support for our service.

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      The following table summarizes the functionality provided in each of our three principal editions.
                                                                                            Enterprise             Professional               Team
Feature                                                                                      Edition                 Edition                 Edition

Account Management                                                                                                                           
Contact Management                                                                                                                           
Opportunity Management                                                                                                                       
Case Management                                                                                                                              
Activity Management                                                                                                                          
Email Templates                                                                                                                              
MS Office Integration                                                                                                                        
MS Outlook Integration                                                                                                                       
Palm Synchronization                                                                                                                         
Reports                                                                                                                                      
Analytics                                                                                                            
Forecasting                                                                                                          
Lead Management                                                                                                      
Mass Email                                                                                                           
Advanced Case Management                                                                                             
Solution Management                                                                                                  
Record-based Security                                                                                                
Multi-currency Support                                                                                               
Documents and Attachments                                                                                            
Campaigns                                                                                                         Available
Offline                                                                                                           Available
Wireless                                                                                                          Available
Weekly Data Export                                                                                                Available
Sforce (Web services API)                                                                                         Available
Multiple Business Processes                                                                                       Available
Product and Annuity Forecasting                                                                 
Self-service Customer Portal                                                                    
Multi-department Customization                                                                  

      ―Available‖ means available for an additional charge.

      Our offline functionality enables users to readily access and use key account, contact, opportunity and other information when traveling
or otherwise when an Internet connection is not readily accessible. Users access the offline functionality using a browser and the same user
interface as our online editions.

     We also offer wireless functionality that enables access to a subset of a user’s data through a variety of devices, including the RIM
BlackBerry, Pocket PC and Palm operating system-based wireless devices and WAP-enabled mobile phones. Our wireless functionality
permits interaction with our service both through free-form text queries and through a graphical user interface.

     As part of our marketing programs, we recently released our Personal Edition service which includes a contact management database and
several other features that are useful to individual sales representatives and others who need a centralized way to organize contact data and
access that data over the Internet. It is intended for use by a single user and is currently available at no charge. As of January 31, 2004,
approximately 15,000 users had activated Personal Edition accounts. In addition, we offer a service called Developer Edition, currently at no
charge, to developers and others interested in building applications on our sforce platform.

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Professional Services

     We offer a range of professional services, principally consulting and implementation services and training, that complement our
on-demand application service.

      Consulting and Implementation Services

      We offer consulting and implementation services to our customers to facilitate the adoption of our on-demand CRM application service.
Consulting services consist of services such as business process mapping, project management services and guidance on best practices in using
our service. Implementation services include systems integration, configuration and data conversion. Our typical consulting and
implementation engagements are generally billed on a time and materials basis.

      Training

      We offer a number of in-person and online educational classes that address topics such as implementing, using and administering our
service. We also offer classes for administrators, users and partners who implement our service on behalf of our customers. Our typical
in-person training courses are billed on a per person, per class basis.

Sforce

      In June 2003, we introduced sforce, a Web services-based API platform that enables third parties, including customers and independent
software vendors, or ISVs, to customize tables and page views within our service, more fully integrate a customer’s data in our service with
other software applications, extend our service’s CRM functionality with customer-specific business functionality, and permit development of
standalone applications that interoperate with our service. Examples of use of the sforce platform include: a customer has used sforce to
integrate our service with multiple ERP systems including Oracle financial software and Siebel customer support software; an ISV has used
sforce to integrate a customer’s sales force automation and content management data to enhance the usefulness of the professional services
management system the ISV has built; and a customer has used sforce to integrate CRM functionality into a custom application for the
consumer mortgage industry that the customer intends to market independently. As part of our sforce offering, we have collaborated with IBM,
Microsoft, Sun Microsystems, Borland and BEA to make available to the sforce developer community a variety of development tools for
building applications upon our platform. We currently do not charge users of our Enterprise Edition a license fee or royalty on sforce or
applications developed with sforce.

Technology, Development and Operations

      Technology

       We believe that our on-demand application service enables us to develop functionality and deliver it to customers more efficiently than
traditional enterprise software vendors. We do not provide software that must be written to different hardware, operating system and database
platforms, or that depends upon a customer’s unique systems environment. Rather, we have optimized our service to run on a specific database
and operating system using the tools and platforms best suited to serve our customers. Performance, functional depth and usability of our
service drive our technology 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
provide our service. The application server is custom-built and runs on a lightweight Java Servlet and Java Server Pages engine. We have
custom-built core services such as database connection pooling and user session management tuned to our specific architecture and
environment, allowing us to continue to scale our service. We have combined a stateless environment, in which a

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user is not bound to a single server but can be routed in the most optimal way to any number of servers, with an advanced data caching layer.
Our customers can access the service through any Web browser without installing any software or downloading Java applets or Microsoft
ActiveX or .NET controls.

      Our service treats all customers as logically separate tenants in central applications and databases. As a result, we are able to spread the
cost of delivering our service across our user base. In addition, because we do not have to manage thousands of distinct applications with their
own business logic and database schemas, we believe that we can scale our business faster than traditional software vendors, even those that
have modified their products to be accessible over the Internet. Moreover, we can focus our resources on building new functionality to deliver
to our customer base as a whole rather than on maintaining an infrastructure to support each of their distinct applications.

      Our service is also flexible. Every page is dynamically rendered for each specific user, including a choice of 11 languages and a number
of currencies with dynamic currency conversion support. In addition, our service can display different views of the data based upon a number
of factors, including user, department and area of responsibility in the company. Our service also allows customers to create multiple subtypes
or subclasses of our business objects and tie views to each record type. This customization extends to the data model of our service, as our
service allows customers to extend existing tables in our database as well as create new tables without actually modifying the underlying
physical database schema.

     We have also developed extensive reporting and analytics functionality in our service that operates on the OLTP database system to
provide real-time analysis of the user’s data. While users can customize any report or dashboard in the service, we dynamically tune the
database based upon specific attributes of the user, the data model, the data security layer and the specific customizations to each report or
dashboard.

      Our service is addressable by other applications on the Internet and applications behind our firewall. Through our sforce platform, we
allow customers and partners to insert, update, delete and query any information in our service. Our full text search engine, which allows users
to perform natural language queries on all the data through a browser, is also exposed as a Web service. We also have mechanisms to protect
our service not only from malicious abuse, but also from poorly written applications that put undue strain on the service. Each user session is
encrypted and we actively monitor our system to detect intrusion by unauthorized users.

      Development

      Our research and development efforts are focused on improving and enhancing our existing service offerings as well as developing new
proprietary services. In addition, from time to time we supplement our internal research and development activities with outside development
resources. Because of our common, multi-tenant application architecture, we are able to provide all of our customers with a service based on a
single version of our application. As a result, we do not have to maintain multiple versions of our application and are able to maintain relatively
low research and development expenses. Our research and development expenses were $5.3 million in fiscal 2002, $4.6 million in fiscal 2003
and $7.0 million in fiscal 2004.

      Operations

      We serve all of our customers and users from a single, third-party Web hosting facility located in Sunnyvale, California, operated by
Qwest Communications International Inc. The facility is designed to withstand an earthquake of magnitude 8.0 on the Richter scale, is secured
by around-the-clock guards, biometric access screening and escort-controlled access, and is supported by on-site backup generators in the event
of a power failure. Our agreement with Qwest provides for Qwest to supply space in its secure facility as well as high bandwidth Internet
access, and runs through January 2005. We regularly rotate tapes of customer data out of the facility and store them in a secure location in the
event of data loss at the facility.

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      We continuously monitor the performance of our service. The monitoring features we have built or licensed include centralized
performance consoles, automated load distribution and various self-diagnostic tools and programs. We have entered into service level
agreements with a small number of our customers warranting certain levels of uptime reliability and permitting those customers to receive
credits or terminate their agreements in the event that we fail to meet those levels. To date, no customer has received credits or terminated its
agreement pursuant to any service level agreement.

      Currently, we have an agreement with SunGard Data Systems, a provider of availability services, to provide access to a geographically
remote disaster recovery facility that would provide access to hardware, software and Internet connectivity in the event the Qwest facility
becomes unavailable. Even with this disaster recovery arrangement, however, our service would be interrupted during the transition. The
arrangement with SunGard serves as our primary backup facility and is designed to support our service for all customers. We are in the process
of obtaining additional rapid recovery services from a third-party vendor. These services would be designed to minimize the interruption during
any transition to a remote disaster recovery facility.

Customers

      As of January 31, 2004, our customer base had grown to approximately 8,700, and these customers had purchased an aggregate of over
127,000 paying subscriptions for use by their employees and other customer-authorized users in approximately 70 countries. We believe that
during fiscal 2004, we generated approximately 40 percent of our revenues from small businesses (companies with fewer than 200 employees),
30 percent of our revenues from medium-size businesses (200 or more employees and up to $500 million in annual revenues), and 30 percent
of our revenues from large businesses (over $500 million in annual revenues). The number of paying subscribers at each of our customers
ranges from one to more than 2,000.

      Representative Customers

      The following table lists our five largest customers by revenue for fiscal 2004 in a variety of different industries:
                    Business Services                              Consumer Services                                      Financial

Automatic Data Processing, Inc.                     Cendant Car Rental Group, Inc.                    Fidelity National Financial, Inc.
Charter Business Networks                           Homestore.com, Inc.                               Guaranty Residential Lending, Inc.
Paymentech, L.P.                                    Kinko’s, Inc.                                     Harland Financial Solutions, Inc.
Scottish Development International                  Le Meridien Hotels & Resorts Limited              Mellon Financial Corporation
Spherion Pacific Enterprises LLC                    Olan Mills, Inc.                                  Sun Trust Bank

             Healthcare/Pharmaceuticals                              Manufacturing                                     Media/Internet

American Medical Response, Inc.                     Advanced Micro Devices, Inc.                      AOL Interactive Marketing
athenahealth, Inc.                                  Analog Devices, Inc.                              DoubleClick Inc.
CIGNA Health Corporation                            Honeywell International Inc.                      Harris Interactive Inc.
Innovex UK Ltd.                                     Invensys Systems, Inc.                            Lightpath Technologies
MedImpact Healthcare Systems, Inc.                  Panduit Corporation                               Lycos Europe GmbH

                      Technology                                        Telecom                                    Transportation/Logistics

Electronics for Imaging, Inc.                       Cox Business Services, LLC                        Eagle Global Logistics
Magma Design Automation, Inc.                       Enterasys Networks, Inc.                          Garrett Aviation
NetScreen Technologies, Inc.                        Genesys S.A.                                      Intermec Technologies Corporation
Polycom, Inc.                                       Genesys Telecommunications Laboratories,          Neff Corporation
SunGard Data Systems Inc.                              Inc.                                           SIRVA, Inc.
                                                    Inter-Tel, Incorporated

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      None of our customers accounted for more than 5 percent of our revenues in fiscal 2003 or 2004.

Sales, Marketing and Customer Support

      We organize our sales and marketing programs by geographic regions, including North America, Europe, Japan, and the Asia Pacific
region other than Japan.

      Direct Sales

      We sell subscriptions to our service primarily through our direct sales force comprised of inside sales, telesales and field sales personnel.
Our small business, general business and enterprise account executives and account managers focus their efforts on small, medium-size and
large enterprises, respectively. Our account executives are responsible for initial sales to new prospects, while our account managers
concentrate on growing pre-existing relationships. Sales representatives in our small business group sell to smaller companies, primarily over
the phone. We also have a group that is responsible for generating leads and assisting in sales to large enterprises. We have field sales offices in
more than 20 major cities worldwide.

      Referral Sales

     We have a network of partners who refer customer prospects to us and assist us in selling to them. These include consulting firms, other
technology vendors and systems integrators. In return, we typically pay these partners a percentage of the first-year subscription revenue
generated by the customers they refer.

      Marketing

     Our marketing strategy is to generate qualified sales leads, build our brand and raise awareness of salesforce.com as a leading provider of
on-demand CRM application services. Our marketing programs include a variety of advertising, events, public relations activities and
Web-based seminar campaigns targeted at key executives and decision makers within businesses.

      Our principal marketing initiatives include:

            launch events to publicize our service to existing customers and prospects;

            direct mail and email campaigns;

            participation in, and sponsorship of, user conferences, trade shows and industry events;

            cooperative marketing efforts with partners, including Web link exchanges, joint press announcements, joint trade show activities,
             channel marketing campaigns and joint seminars;

            using our website to offer free trials of our service and to provide product and company information; and

            advertising in newspapers, CRM trade magazines, management journals and other business-related periodicals.

      Customer Service and Support

      We believe that superior customer support is critical to retaining and expanding our customer base. Our customer support group handles
both general customer inquiries, such as questions about the ordering process or the status of an order or payment, technical questions or
questions relating to how to use our service, and is available to customers by telephone or email or over the Web. We offer basic and more
advanced classes on how to use, administer and customize our service over the Web free of charge to our customers on a weekly or monthly
basis, depending on the class.

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      We have a comprehensive technical support program to assist our customers in the use of our service and to identify, analyze and solve
any problems or issues with our service. The support program includes email support, an online repository of helpful information about our
service and shared best practices for implementation and use and telephone support. Telephone support is provided by technical support
specialists on our staff, who are extensively trained in the use of our service and who are located at our three global support centers in San
Francisco, Dublin and Tokyo. Basic customer support during business hours is available at no charge to customers that purchase our Team
Edition, Professional Edition or Enterprise Edition.

      International Sales

      In fiscal 2003 and 2004, we generated approximately 14 percent and 18 percent of our total revenues, respectively, from customers in
Europe and Asia Pacific. We expect international markets to provide increased opportunities for our applications and services in the future. Our
current international efforts are focused on strengthening our direct sales and marketing presence in Europe and Asia Pacific, and generating
more revenues from these regions. We maintain sales offices in 11 countries outside of North America.

Competition

      The market for CRM applications, and enterprise business applications generally, is highly competitive, rapidly evolving and fragmented,
and subject to changing technology, shifting customer needs and frequent introductions of new products and services. We compete primarily
with vendors of packaged CRM software, whose software is installed by the customer directly or hosted by a first generation ASP on the
customer’s behalf, and companies offering on-demand CRM applications. We also compete with internally developed applications and face, or
expect to face, competition from enterprise software vendors and online service providers who may develop and/or bundle CRM products with
their products in the future. Our current principal competitors include:

            enterprise software application vendors including Amdocs Limited, E.piphany, Inc., IBM Corporation, Microsoft Corporation,
             Oracle Corporation, PeopleSoft, Inc., SAP AG and Siebel Systems, Inc.;

            packaged CRM software vendors, some of whom offer hosted services, such as BMC Software Corporation, FrontRange
             Solutions, Inc., Onyx Software Corp., Pivotal Corporation, which has signed an agreement to be acquired by CDC Software
             Corporation, a subsidiary of chinadotcom corporation, and Sage Group plc;

            on-demand CRM application service providers such as NetSuite, Inc., RightNow Technologies, Inc. and Salesnet, Inc.; and

            enterprise application service providers including British Telecom, Corio, Inc. and IBM.

      We believe the principal competitive factors in our market include the following:

            speed and ease of implementation;

            ease of use and rates of user adoption;

            low total cost of ownership and demonstrable cost-effective benefits for customers;

            product functionality;

            performance, security, scalability, flexibility and reliability of the service;

            ease of integration with existing applications;

            quality of customer support;

            availability and quality of implementation, consulting and training services;

            vendor reputation;

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            sales and marketing capabilities of the vendor; and

            financial stability of the vendor.

      While some of our competitors offer CRM applications with greater complexity than our service, we believe none of them addresses all
of the limitations of traditional CRM applications adequately. In many cases, we believe CRM applications with greater complexity have a
higher total cost of ownership, take significantly more time to implement and are harder to use than our service. However, many of our
competitors and potential competitors have greater name recognition, longer operating histories and significantly greater resources. They may
be able to devote greater resources to the development, promotion and sale of their products than we can to ours, which could allow them to
respond more quickly than we can to new technologies and changes in customer needs. We cannot assure you that our competitors will not
offer or develop products or services that are superior to ours or that achieve greater market acceptance.

      Our professional services organization competes with a broad range of large systems integrators, including Accenture Ltd., BearingPoint,
Inc. and IBM as well as smaller independent consulting firms specializing in CRM implementations. We have relationships with many of these
consulting companies and frequently work cooperatively on projects with them, even as we compete for business in other customer
engagements.

Intellectual Property

      We rely on a combination of trademark, copyright, trade secret laws in the United States and other jurisdictions as well as confidentiality
procedures and contractual provisions to protect our proprietary technology and our brand. We have U.S. patent applications pending and no
issued patents. We also enter into confidentiality and proprietary rights agreements with our employees, consultants and other third parties and
control access to software, documentation and other proprietary information.

      The following are our U.S. registered trademarks:

            salesforce.com
            ―No Software‖ logo
            The End of Software
            SFDC Asia Pacific

      The following are unregistered trademarks that we use:

            Team Edition
            Success. Not Software.
            Success. On Demand.
            sforce
            experience success.

       If a claim is asserted that we have infringed the intellectual property of a third party, we may be required to seek licenses to that
technology. In addition, we license third-party technologies that are incorporated into some elements of our services. Licenses from third-party
technologies may not continue to be available to us at a reasonable cost, or at all. Additionally, the steps we have taken to protect our
intellectual property rights may not be adequate. Third parties may infringe or misappropriate our proprietary rights. Competitors may also
independently develop technologies that are substantially equivalent or superior to the technologies we employ in our services. If we fail to
protect our proprietary rights adequately, our competitors could offer similar services, potentially significantly harming our competitive
position and decreasing our revenues.

Employees

      As of January 31, 2004, we had 444 full-time equivalent employees. None of our employees is represented by a labor union. We consider
our relationship with our employees to be good.

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Legal Proceedings

      Generally, we are involved in various legal proceedings arising from the normal course of business activities. In our opinion, resolution of
these matters is not expected to have a material adverse impact on our consolidated results of operations, cash flows or our financial position.
However, depending on the amount and timing, an unfavorable resolution of a matter could materially affect our future results of operations,
cash flows or financial position in a particular period.

Facilities

      Our executive offices and principal office for domestic marketing, sales and development occupies approximately 84,000 square feet in
San Francisco, California under leases that expire in 2006 and 2011. 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. If we require additional space, we believe that we will be able to obtain such space on acceptable,
commercially reasonable terms.

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                                                                 MANAGEMENT

Executive Officers and Directors

       Our executive officers and directors, and their ages and positions as of March 1, 2004 are as follows:
Name                                                Age     Position

Marc Benioff                                        39      Chairman of the Board of Directors and Chief Executive Officer
Jim Steele                                          48      President, Worldwide Operations
Patricia Sueltz                                     51      President of Technology, Marketing and Systems
Steve Cakebread                                     52      Chief Financial Officer
Jim Cavalieri                                       34      Chief Information Officer
David Moellenhoff                                   34      Chief Technology Officer
Parker Harris                                       37      Senior Vice President, Research and Development
David Schellhase                                    40      Vice President and General Counsel
Alan Hassenfeld (1)                                 55      Director
Craig Ramsey (2)                                    57      Director
Sanford R. Robertson (1)(3)                         72      Director
Stratton Sclavos                                    42      Director
Larry Tomlinson (1)(3)                              63      Director
Magdalena Yesil (2)                                 45      Director

(1)    Member of the Audit Committee

(2)    Member of the Compensation Committee

(3)    Member of the Nominating and Corporate Governance Committee

      Marc Benioff co-founded salesforce.com in February 1999 and has served as Chairman of the Board of Directors since inception. He has
served as Chief Executive Officer since November 2001. From 1986 to 1999, Mr. Benioff was employed at Oracle Corporation where he held a
number of positions in sales, marketing and product development, most recently as a Senior Vice President. Mr. Benioff is Co-Chairman of
The President of the United States’ Information Technology Advisory Committee (PITAC). Mr. Benioff also serves as Chairman of the Board
of Directors of the salesforce.com/foundation. Mr. Benioff received a Bachelor of Science in Business Administration (B.S.B.A.) from the
University of Southern California.

      Jim Steele has served as our President, Worldwide Operations since joining salesforce.com in October 2002. From February 2001 to
September 2002, Mr. Steele served as Executive Vice President, Worldwide Sales and Operations for Ariba, Inc., a software company. From
February 1978 to January 2001, Mr. Steele served in a variety of globally focused executive roles at IBM Corporation. Mr. Steele received a
B.S. from Bucknell University.

      Patricia Sueltz has served as our President of Technology, Marketing and Systems since February 2004. She previously held a number of
executive positions at Sun Microsystems, Inc., a provider of information technology products and services, including Executive Vice President,
Sun Services, from July 2002 to February 2004, Executive Vice President, Software Systems Group from July 2000 to June 2002 and
President, Software Products & Platforms from September 1999 to June 2000. Ms. Sueltz served in various management capacities at IBM
Corporation, a diversified computer and information technology company, from 1979 to 1999. Ms. Sueltz is a director of Amgen, Inc., a
biotechnology company. Ms. Sueltz received a B.A. from Occidental College.

      Steve Cakebread has served as our Chief Financial Officer since April 2002. From April 1997 to April 2002, Mr. Cakebread served as
Senior Vice President and Chief Financial Officer for Autodesk, Inc., a software company. From 1992 to 1997, Mr. Cakebread served as Vice
President of Finance for Silicon Graphics, Inc., a computer workstation company. Mr. Cakebread received a B.S. from the University of
California at Berkeley and an M.B.A. from Indiana University.

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      Jim Cavalieri has served as our Chief Information Officer since November 2001. From July 1999 to November 2001, Mr. Cavalieri
served as our Vice President, Systems Engineering. From January 1995 to July 1999, Mr. Cavalieri was employed at Oracle Corporation where
he held several technical and management positions, most recently as Senior Technical Program Manager. From June 1991 to December 1994,
Mr. Cavalieri worked as a consultant and systems engineer for EDS. Mr. Cavalieri received a B.S. from Cornell University.

      David Moellenhoff co-founded salesforce.com in February 1999 and served in senior technical positions since inception, most recently as
our Chief Technology Officer. Mr. Moellenhoff also serves on the Board of Directors of the salesforce.com/foundation. From October 1996 to
February 1999, Mr. Moellenhoff was President of Left Coast Software, a Java consulting firm he co-founded. Mr. Moellenhoff received two
B.S. degrees and an M.B.A. from Washington University in St. Louis.        .

     Parker Harris co-founded salesforce.com in February 1999 and served in senior technical positions since inception, most recently as our
Senior Vice President, Research and Development. From October 1996 to February 1999, Mr. Harris was a Vice President at Left Coast
Software, a Java consulting firm he co-founded. Mr. Harris received a B.A. from Middlebury College.

     David Schellhase has served as our Vice President and General Counsel since July 2002. From December 2000 to June 2002, Mr.
Schellhase was an independent legal consultant and authored a treatise entitled Corporate Law Department Handbook . From February 2000 to
November 2000, Mr. Schellhase was Vice President and General Counsel of Linuxcare, Inc., an IT services and consulting company. From
August 1997 to January 2000, Mr. Schellhase was Vice President and General Counsel of The Vantive Corporation, a software company.
Mr. Schellhase received a B.A. from Columbia University and a J.D. from Cornell University.

     Alan Hassenfeld has served as a Director since December 2003. From 1989 until May 2003, Mr. Hassenfeld was Chairman and Chief
Executive Officer of Hasbro, Inc., a provider of children’s and family entertainment products, and has been Chairman of Hasbro since May
2003. Mr. Hassenfeld is a trustee of the Hasbro Charitable Trust and Hasbro Children’s Foundation. Mr. Hassenfeld also serves as a member of
the Board of Directors of the salesforce.com/foundation. Mr. Hassenfeld received a B.A. from the University of Pennsylvania.

      Craig Ramsey has served as a Director since April 2003. From July 2003, Mr. Ramsey has been CEO of Pay By Touch, a biometrics
payments company. From March 1996 to April 2000, Mr. Ramsey served as Senior Vice President, Worldwide Sales, of Siebel Systems, Inc., a
provider of eBusiness applications. From March 1994 to March 1996, Mr. Ramsey served as Senior Vice President, Worldwide Sales,
Marketing and Support for nCube, a maker of massively parallel computers. From 1968 to 1994, Mr. Ramsey held various positions with
Oracle Corporation, Amdahl and IBM. Mr. Ramsey currently serves on the Board of Directors of Pay By Touch and Arcsight. He received a
B.A. in Economics from Denison University.

      Sanford R. Robertson has served as a Director since October 2003. He is a principal of Francisco Partners, a technology buyout fund.
Prior to founding Francisco Partners in January 2000, Mr. Robertson was the founder and chairman of Robertson, Stephens & Company, a
technology investment bank. Mr. Robertson has been an active technology investor and advisor to several technology companies. Mr.
Robertson was also the founder of Robertson, Colman, Siebel & Weisel, later renamed Montgomery Securities, another prominent technology
investment bank. Mr. Robertson is a director of Pain Therapeutics, Inc. and the Schwab Fund for Charitable Giving. Mr. Robertson received a
B.B.A. and M.B.A. from the University of Michigan.

      Stratton Sclavos has served as a Director since February 2000. Since July 1995, Mr. Sclavos has served as President, Chief Executive
Officer and Chairman of VeriSign, Inc., a provider of trusted infrastructure services to websites, enterprises, electronic service providers and
individuals. In December 2001, Mr. Sclavos was named Chairman of the Board of Directors of Verisign. From July 1993 to June 1995, Mr.
Sclavos served as Vice President, Worldwide Marketing and Sales of Taligent, Inc., a software development company that was a joint

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venture among Apple Computer, IBM and Hewlett-Packard. From May 1992 to September 1993, Mr. Sclavos was Vice President of
Worldwide Sales and Business Development of GO Corporation, a pen-based computer company. Prior to that time, he served in various sales
and marketing capacities for MIPS Computer Systems, Inc. and Megatest Corporation. Mr. Sclavos serves as a director of VeriSign, Inc., Intuit,
Inc. and Juniper Networks, Inc. Mr. Sclavos received a B.S. from the University of California at Davis.

     Larry Tomlinson has served as a Director since May 2003. From 1965 to 2003, Mr. Tomlinson was employed at Hewlett-Packard, an
information technology company, holding various management and executive positions. From 1993 to June 2003, Mr. Tomlinson was
Hewlett-Packard Treasurer and also a Senior Vice President. Mr. Tomlinson serves as a director of Coherent, Inc. and Therma-Wave, Inc. Mr.
Tomlinson received a B.S. from Rutgers University and an M.B.A. from Santa Clara University.

     Magdalena Yesil has served as a Director since March 1999. Ms. Yesil has been a venture capitalist at Presidio Management/US Venture
Partners since February 1998. From August 1996 to December 1997, Ms. Yesil founded MarketPay, a software company, and served as its
CEO and President. From 1994 to August 1996, Ms. Yesil co-founded Cybercash, a secure electronic payment company, and served as
Vice President of Marketing and Technology. She currently serves on the boards of 3Ware, Aqueduct, Claria Corporation, Dotomi, Everypath
and Klocwork. Ms. Yesil received a B.S. and an M.S. from Stanford University.

Board Composition

      Our board of directors currently consists of seven members. Effective upon the closing of this offering, our board of directors will be
divided into three classes of directors who will serve in staggered three-year terms, as follows:

            The Class I directors will be Messrs. Benioff and Hassenfeld, and their terms will expire at the annual meeting of stockholders to
             be held in 2005;

            The Class II directors will be Ms. Yesil and Mr. Robertson, and their terms will expire at the annual meeting of stockholders to be
             held in 2006; and

            The Class III directors will be Messrs. Tomlinson, Sclavos and Ramsey, and their terms will expire at the annual meeting of
             stockholders to be held in 2007.

      Effective upon the closing of this offering, our amended and restated certificate of incorporation will provide that the authorized number
of directors may be changed only by resolution of the board of directors. Any additional directorships resulting from an increase in the number
of directors will be distributed among the three classes with three-year terms so that, as nearly as possible, each class will consist of one-third
of the directors. At each annual meeting of stockholders, the successors to directors whose terms then expire will be elected to serve from the
time of election and qualification until the third annual meeting following election. The division of our board of directors into these three
classes may delay or prevent a change of our management or a change in control.

Board Committees

      As of the closing of this offering, our board of directors will have, among others, the following committees: an audit committee; a
compensation committee; and a nominating and corporate governance committee. The composition and responsibilities of each committee are
described below.

      Audit Committee

      Our audit committee oversees our corporate accounting and financial reporting process. Among other matters, the audit committee
evaluates the independent auditors’ qualifications, independence and performance; determines the engagement of the independent auditors;
approves the retention of the independent auditors to perform any proposed permissible non-audit services; monitors the rotation of partners of
the independent auditors on the salesforce.com engagement team as required by law; reviews our financial statements; reviews our critical
accounting policies and estimates; oversees our internal audit function; annually reviews the audit

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committee charter and the committee’s performance; reviews and approves the scope of the annual audit and the audit fee; and discusses with
management and the independent auditors the results of the annual audit and the review of our quarterly financial statements. The current
members of our audit committee are Messrs. Tomlinson, who is the committee chair, Hassenfeld and Robertson. Our board of directors has
determined that all members of our audit committee meet the applicable tests for independence and the requirements for financial literacy under
applicable rules and regulations of the SEC and the New York Stock Exchange, or the NYSE. Our board has determined that Mr. Tomlinson is
an audit committee financial expert, as defined under the SEC rules implementing Section 407 of the Sarbanes-Oxley Act of 2002, and has the
requisite ―accounting or related financial expertise,‖ as defined by applicable rules and regulations of the NYSE.

      Our board of directors has approved an audit committee charter that meets the applicable standards of the SEC and NYSE.

      Compensation Committee

      Our compensation committee reviews and recommends policy relating to compensation and benefits of our officers and employees,
including reviewing and approving corporate goals and objectives relevant to compensation of the Chief Executive Officer and other senior
officers, evaluating the performance of these officers in light of those goals and objectives, and setting compensation of these officers based on
such evaluations. The compensation committee also will administer the issuance of stock options and other awards under our stock plans. The
compensation committee will review and evaluate, at least annually, the performance of the compensation committee and its members,
including compliance of the compensation committee with its charter. The current members of our compensation committee members are Ms.
Yesil, who is the committee chair, and Mr. Ramsey. Our board of directors has determined that all members of our compensation committee
meet the applicable tests for independence under the applicable rules and regulations of the SEC, the NYSE and the Internal Revenue Service.

      Our board of directors has approved a compensation committee charter that meets the applicable standards of the SEC and NYSE.

      Nominating and Corporate Governance Committee

      Our nominating and corporate governance committee identifies individuals qualified to become directors; selects, or recommends to our
board of directors, director nominees for each election of directors; develops and recommends to our board of directors criteria for selecting
qualified director candidates; considers committee member qualifications, appointment and removal; recommends corporate governance
guidelines applicable to us; and provides oversight in the evaluation of our board of directors and each committee. The current members of the
nominating and corporate governance committee are Messrs. Robertson, who is the committee chair, and Tomlinson. Our board of directors
has determined that all members of our nominating and corporate governance committee meet the applicable tests for independence under the
applicable rules and regulations of the SEC and NYSE.

     Our board of directors has approved a nominating and corporate governance committee charter that meets the applicable standards of
the SEC and NYSE.

Director Compensation

      The members of our board of directors who are not our employees are reimbursed for travel, lodging and other reasonable expenses
incurred in attending board and committee meetings. Members do not receive cash compensation for attending board and committee meetings.

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     The members of our board of directors received the following stock option grants as compensation for their attendance at our board and
committee meetings. These options vest over four years, with 25 percent vesting after one year and the balance vesting monthly over the
remaining period.
                                                                                          Number of
                                                                                           Shares
                                                                                          Subject to               Date of            Exercise
                Director                                                                   Options                 Grant               Price

                Alan Hassenfeld                                                            200,000             12/16/03              $    8.00
                Craig Ramsey                                                               300,000               3/5/03                   2.50
                Sanford R. Robertson                                                       300,000              10/7/03                   4.00
                Stratton Sclavos                                                           250,000              2/11/00                   0.55
                Larry Tomlinson                                                            300,000               5/2/03                   2.50
                Magdalena Yesil                                                            500,000              6/24/99                   0.02

      In addition, in January 2004, our board of directors authorized the issuance of 22,500 shares of our common stock to Ms. Yesil in
exchange for her past services on the board of directors. Under our 2004 Outside Directors Stock Plan which will be effective upon completion
of the offering, our non-employee directors will receive quarterly stock awards of 3,750 shares of common stock for service during the
preceding quarter. See ―Employee Benefit Plans‖ for a description of our 2004 Outside Directors Stock Plan.

Compensation Committee Interlocks and Insider Participation

     None of our executive officers serves as a member of the board of directors or compensation committee of any entity that has one or more
executive officers who serve on our board of directors or compensation committee.

Executive Compensation

      The following table provides information for fiscal 2004 and fiscal 2003 regarding the compensation awarded or paid to, or earned by,
our chief executive officer and each of our five other most highly compensated executive officers. We refer to these individuals elsewhere in
this prospectus as ―named executive officers.‖ We do not compensate our named executive officers with perquisites or other personal
benefits.

                                                       Summary Compensation Table
                                                                                                                             Securities
                                                               Fiscal                                                        Underlying            All Other
Name and Principal Position                                    Year              Salary                Bonus                  Options            Compensation

Marc Benioff, Chairman of the Board and                        2004          $            1        $           —                      —          $         —
 Chief Executive Officer (1)                                   2003                       1                    —                      —                    —
Steve Cakebread, Chief Financial Officer (2)                   2004              250,000               87,500                       —                      —
                                                               2003              177,244                   —                 1,000,000                     —
Jim Steele, President, Worldwide Operations (3)                2004              300,000               76,250                       —                      —
                                                               2003               95,577               75,000                1,350,000                     —
Jim Cavalieri, Chief Information Officer                       2004              212,500                 8,750                       —                     —
                                                               2003              168,333                    —                   200,000                    —
David Moellenhoff, Chief Technology Officer                    2004              205,000                 8,000                        —                    —
                                                               2003              160,000                    —                         —                    —
Parker Harris, Senior Vice President, Research and             2004              205,000                 8,000                        —                    —
  Development                                                  2003              160,000                    —                         —                    —

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(1)    Mr. Benioff receives minor compensation for his position: nominal salary; no bonus; and no options.

(2)    Mr. Cakebread joined us in April 2002. The fiscal 2003 amounts above reflect his compensation from April 2002 to January 31, 2003.

(3)    Mr. Steele joined us in October 2002. The fiscal 2003 amounts above reflect his compensation from October 2002 to January 31, 2003.

Option Grants in Fiscal 2004

       No options to purchase shares of our common stock were granted to any of our named executive officers in fiscal 2004.

Aggregated Option Exercises in Fiscal 2004 and Year-End Option Values

      The following table provides information concerning unexercised options held as of January 31, 2004, by each of our named executive
officers:
                                                                       Number of Securities                              Value of Unexercised
                                                                   Underlying Unexercised Options                      In-the-Money Options at
Name                                                                     at Fiscal Year-End                              Fiscal Year-End (1)

                                                                Exercisable             Unexercisable            Exercisable             Unexercisable

Marc Benioff                                                            —                           —                     —                         —
Steve Cakebread                                                    750,000                          —        $     5,175,000                        —
Jim Steele                                                       1,012,500                          —              6,986,250                        —
Jim Cavalieri                                                      425,000                          —              2,932,500                        —
David Moellenhoff                                                       —                           —                     —                         —
Parker Harris                                                           —                           —                     —                         —

(1)    Based on an assumed initial public offering price of $8.00 per share, minus the exercise price, multiplied by the number of shares issued
       upon the exercise of, or subject to, the option.

      Our 1999 Stock Option Plan, 2004 Equity Incentive Plan and 2004 Outside Directors Stock Plan allow for the early exercise of options
granted. All options exercised early are subject to repurchase by us at the original exercise price or, for some options, at the lower of the
original purchase price or fair market value at the time of repurchase. Our repurchase right lapses over time.

     Amounts presented under the captions ―Value Realized‖ and ―Value of Unexercised In-the-Money Options at Fiscal Year-End‖ are based
on an assumed initial public offering price of $8.00 per share minus the exercise price, multiplied by the number of shares subject to the option,
without taking into account any taxes that may be payable in connection with the transaction.

Employment Agreements and Change in Control Agreements

       Executive Officer Offer Letters

       Each of our named executive officers has signed offer letters which provide that the officer is an at-will employee. The offer letters
provide for salary, in some instances an initial annual bonus that is based upon our financial performance and the successful completion of
specified performance objectives, stock options, and participation in our employee benefit plans. The terms of the offer letters regarding initial
annual bonuses are no longer in effect. Ms. Sueltz, who joined us in February 2004, will receive a $50,000 bonus in each quarter during the
first year of her employment. Bonuses for our named executive officers are currently determined on a case-by-case basis by the compensation
committee based on a mix of company and individual performance objectives.

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      In addition, the board of directors approved in December 2003 a change in control provision that would affect the compensation of
certain of our executive officers. Specifically, if we experience a change in control, and the employment of Mr. Benioff, Mr. Cakebread, Ms.
Sueltz or Mr. Steele is terminated without cause, or if such officer terminates his or her employment for certain reasons including changes in
job responsibilities, geographic relocation or a change in reporting status during the 12-month period following the change in control, then the
vesting of the unvested stock subject to options held by such officer automatically accelerates by six months from the date of the change in
control. We have also agreed that if Ms. Sueltz is terminated without cause during the first twelve months of her employment, she will receive
six months of base salary and accelerated vesting of six months of her original stock option grant or monthly vesting through her termination
date, whichever is greater. Information for fiscal 2004 and fiscal 2003 regarding the compensation earned by our named executive officers is
described in ―Executive Compensation‖ above.

Employee Benefit Plans

      1999 Stock Option Plan

      In April 1999, our board of directors adopted and our stockholders approved the 1999 Stock Option Plan, or the 1999 Plan. A total of
36,000,000 shares of common stock have been reserved for issuance under this plan. In January 2004, our board of directors approved a
2,000,000 share increase in the reserve under this plan. Our stockholders approved this increase in February 2004. As of January 31, 2004,
there were outstanding under the 1999 Plan options to purchase 15,928,395 shares of common stock at a weighted average exercise price per
share of $2.29. As of January 31, 2004, a total of 2,889,379 shares of common stock remained available for future option grants.

      Under the 1999 Plan, our employees, directors and consultants, and those of any parent or subsidiary of ours, are eligible to receive
nonstatutory stock options. Employees are eligible also to receive ―incentive stock options,‖ within the meaning of Section 422 of the Internal
Revenue Code. This plan is administered by our board of directors. Subject to the provisions of the 1999 Plan, the board determines in its
discretion the persons to whom and the times at which options are granted, the types and sizes of such options, and all of their terms and
conditions. All options must be evidenced by a written agreement between us and the participant. The board may amend, cancel, renew or
reprice any option, grant a new option in substitution for any option, waive any restrictions or conditions applicable to any option, and
accelerate, continue, extend or defer the vesting of any option. The board has the authority to construe and interpret the terms of the 1999 Plan
and options granted under it.

       The exercise price of nonstatutory stock options granted under the 1999 Plan must be at least 85 percent of the fair market value of a
share of our common stock on the date of grant. The exercise price of incentive stock options cannot be less than 100 percent of the fair market
value of a share of our common stock on the date of grant. In the case of any options granted to a person who owns stock possessing more than
10 percent of the total combined voting power of all classes of our stock or of any parent or subsidiary corporation, the exercise price cannot be
less than 110 percent of such fair market value. The term of an option cannot exceed 10 years, or 5 years for incentive stock options granted to
10 percent stockholders. Unless a longer period is provided by the board, an option generally remains exercisable for 30 days following the
participant’s termination of service, except that if service terminates as a result of the participant’s death or disability, the option generally
remains exercisable for twelve months, but in any event not beyond the expiration of its term. Shares subject to options granted under the 1999
Plan generally vest, conditioned upon the participant’s continued service, over a period of four years, with 25 percent vesting after one year and
the balance vesting in equal monthly installments over the remaining 36 months.

      If we experience a change in control, the acquiring or successor corporation may assume or substitute substantially equivalent options for
the outstanding options granted under the 1999 Plan. If the acquiring or successor corporation elects not to assume or substitute for outstanding
options granted under the 1999 Plan,

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shares subject to the options will become fully exercisable and vested ten days prior to the date of the change in control. On completion of a
change in control all outstanding options will terminate to the extent not exercised or assumed by the acquiring or successor corporation.

      2004 Equity Incentive Plan

     Our 2004 Equity Incentive Plan, or the Equity Plan, was approved by our board of directors in December 2003 and by our stockholders in
February 2004.

       Purpose. The Equity Plan is intended to make available incentives that will assist us to attract, retain and motivate employees whose
contributions are essential to our success. We may provide these incentives through the grant of stock options, stock appreciation rights,
restricted stock awards, restricted stock units, performance shares and performance units.

      Shares Subject to Equity Plan. A total of 4,000,000 shares of our common stock are initially authorized and reserved for issuance
under the Equity Plan. This authorization will automatically increase on February 1, 2005 and each subsequent anniversary through 2013 as
follows: (1) in 2005 and 2006 by the lesser of 5 percent of our then outstanding shares of common stock or 5,000,000 shares, (2) in 2007 and
2008 by the lesser of 4 percent of our then outstanding shares of common stock or 4,000,000 shares, and (3) in each year from 2009 through
2013 by the lesser of 3.5 percent of our then outstanding shares of common stock or 3,500,000 shares. The board of directors may elect to
reduce, but not increase without also obtaining stockholder approval, the number of additional shares authorized in any year. Appropriate
adjustments will be made in the number of authorized shares and in outstanding awards to prevent dilution or enlargement of participants’
rights in the event of a stock split or other change in our capital structure. Shares subject to awards which expire or are cancelled or forfeited
will again become available for issuance under the Equity Plan. The shares available will not be reduced by awards settled in cash or by shares
withheld to satisfy tax withholding obligations. Only the net number of shares issued upon the exercise of stock appreciation rights or options
exercised by tender of previously owned shares will be deducted from the shares available under the Equity Plan.

      Administration . The administrator of our Equity Plan will generally be the compensation committee of our board of directors, although
the board may delegate to one or more of our officers authority, subject to limitations specified by the plan and the board, to grant stock options
to service providers who are neither officers nor directors of us. Subject to the provisions of the plan, the administrator determines in its
discretion the persons to whom and the times at which awards are granted, the types and sizes of such awards, and all of their terms and
conditions. All awards must be evidenced by a written agreement between us and the participant. The administrator may amend, cancel or
renew any award, waive any restrictions or conditions applicable to any award, and accelerate, continue, extend or defer the vesting of any
award. The administrator has the authority to construe and interpret the terms of the Equity Plan and awards granted under it.

      Eligibility . Awards may be granted under the Equity Plan to our employees, including officers, directors, or consultants or those of any
present or future parent or subsidiary corporation or other affiliated entity. While we grant incentive stock options only to employees, we may
grant nonstatutory stock options, stock appreciation rights, restricted stock awards, restricted stock units, performance shares and performance
units to any eligible participant.

      Stock Options. The administrator may grant nonstatutory stock options, ―incentive stock options,‖ within the meaning of Section 422
of the Internal Revenue Code, or any combination of these. The exercise price of each option may not be less than the fair market value of a
share of our common stock on the date of grant. Any incentive stock option granted to a person who owns stock possessing more than
10 percent of the total combined voting power of all classes of our stock or of any parent or subsidiary corporation must have an exercise price
equal to at least 110 percent of the fair market value of a share of our common stock on the date of grant and a term not exceeding five years.
The term of all other options may not exceed ten years. Options vest and become

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exercisable at such times or upon such events and subject to such terms, conditions, performance criteria or restrictions as specified by the
administrator. Unless a longer period is provided by the administrator, an option generally will remain exercisable for three months following
the participant’s termination of service, except that if service terminates as a result of the participant’s death or disability, the option generally
will remain exercisable for twelve months, but in any event not beyond the expiration of its term.

      Stock Appreciation Rights . A stock appreciation right gives a participant the right to receive the appreciation in the fair market value of
our common stock between the date of grant of the award and the date of its exercise. We may pay the appreciation either in cash or in shares
of our common stock. We may make this payment in a lump sum, or we may defer payment in accordance with the terms of the participant’s
award agreement. The administrator may grant stock appreciation rights under the Equity Plan in tandem with a related stock option or as a
freestanding award. A tandem stock appreciation right is exercisable only at the time and to the same extent that the related option is
exercisable, and its exercise causes the related option to be canceled. Freestanding stock appreciation rights vest and become exercisable at the
times and on the terms established by the administrator. The maximum term of any stock appreciation right granted under the Equity Plan is ten
years.

       Restricted Stock Awards . The administrator may grant restricted stock awards under the Equity Plan either in the form of a restricted
stock purchase right, giving a participant an immediate right to purchase our common stock, or in the form of a restricted stock bonus, for
which the participant furnishes consideration in the form of services to us. The administrator determines the purchase price payable under
restricted stock purchase awards, which may be less than the then current fair market value of our common stock. Restricted stock awards may
be subject to vesting conditions based on such service or performance criteria as the administrator specifies, and the shares acquired may not be
transferred by the participant until vested. Unless otherwise determined by the administrator, a participant will forfeit any unvested shares upon
voluntary or involuntary termination of service with us for any reason, including death or disability. Participants holding restricted stock will
have the right to vote the shares and to receive any dividends paid, except that dividends or other distributions paid in shares will be subject to
the same restrictions as the original award.

       Restricted Stock Units . Restricted stock units granted under the Equity Plan represent a right to receive shares of our common stock at a
future date determined in accordance with the participant’s award agreement. No monetary payment is required for receipt of restricted stock
units or the shares issued in settlement of the award, the consideration for which is furnished in the form of the participant’s services to us. The
administrator may grant restricted stock unit awards subject to the attainment of performance goals similar to those described below in
connection with performance shares and performance units, or may make the awards subject to vesting conditions similar to those applicable to
restricted stock awards. The Equity Plan also authorizes the administrator to establish a deferred compensation award program under which
selected participants may elect to receive fully vested stock units in lieu of compensation otherwise payable in cash or in lieu of cash or shares
of stock otherwise issuable upon the exercise of stock options, stock appreciation rights, performance shares or performance units. Participants
have no voting rights or rights to receive cash dividends with respect to restricted stock unit awards until shares of common stock are issued in
settlement of such awards. However, the administrator may grant restricted stock units that entitle their holders to receive dividend equivalents,
which are rights to receive additional restricted stock units for a number of shares whose value is equal to any cash dividends we pay.

       Performance Shares and Performance Units . The administrator may grant performance shares and performance units under the Equity
Plan, which are awards that will result in a payment to a participant only if specified performance goals are achieved during a specified
performance period. Performance share awards are denominated in shares of our common stock, while performance unit awards are
denominated in dollars. In granting a performance share or unit award, the administrator establishes the applicable performance goals based on
one or more measures of business performance enumerated in the Equity Plan, such as revenue, gross margin, net income, cash flow, return on
capital or market share. To the extent earned, performance share and unit awards may be settled in cash, shares of our common stock, including
restricted stock, or any combination of these.

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Payments may be made in lump sum or on a deferred basis. If payments are to be made on a deferred basis, the administrator may provide for
the payment of dividend equivalents or interest during the deferral period. Unless otherwise determined by the administrator, if a participant’s
service terminates due to death or disability prior to completion of the applicable performance period, the final award value is determined at the
end of the period on the basis of the performance goals attained during the entire period, but payment is prorated for the portion of the period
during which the participant remained in service. Except as otherwise provided by the Equity Plan, if a participant’s service terminates for any
other reason, the participant’s performance shares or units are forfeited.

      Change in Control . In the event of a change in control, the acquiring or successor entity may assume all stock options and stock
appreciation rights outstanding under the Equity Plan or substitute substantially equivalent options and stock appreciation rights. If the
outstanding stock options and stock appreciation rights are not assumed by the acquiring or successor entity, then all unexercised portions of
such outstanding awards will terminate. Alternatively, the administrator may provide for the cancellation of outstanding stock options or stock
appreciation rights in exchange for a payment in cash, stock or other property having a value equal to the difference between the exercise price
of the award and the consideration payable in the change in control transaction with respect to the number of vested shares subject to the award.
The administrator may provide in any award agreement for the acceleration of the vesting and settlement of any award in connection with a
change in control upon such conditions and to such extent as the administrator determines.

      Amendment and Termination. The Equity Plan will continue in effect until the tenth anniversary of its approval by the stockholders,
unless earlier terminated by the administrator. The administrator may amend, suspend or terminate the Equity Plan at any time, provided that
without stockholder approval, the plan cannot be amended to increase the number of shares authorized, change the class of persons eligible to
receive incentive stock options or effect any other change that would require stockholder approval under any applicable law or listing rule.
Amendment, suspension or termination of the Equity Plan may not adversely affect any outstanding award without the consent of the
participant, unless such amendment, suspension or termination is necessary to comply with applicable law.

      2004 Outside Directors Stock Plan

     Our 2004 Outside Directors Stock Plan, or the Directors Plan, was approved by our board of directors in December 2003 and by our
stockholders in February 2004.

       Purpose. The Directors Plan is intended to advance our interests and the interests of our stockholders by providing an incentive to
attract, retain and reward independent members of our board of directors. We may provide these incentives through the grant of stock options,
restricted stock and restricted stock units.

       Shares Subject to Directors Plan. A total of 1,000,000 shares of our common stock are authorized and reserved for issuance under the
Directors Plan. Appropriate adjustments will be made in the number of authorized shares and in outstanding awards to prevent dilution or
enlargement of participants’ rights in the event of a stock split or other change in our capital structure. Shares subject to awards which expire or
are canceled or forfeited will again become available for issuance under this plan. The shares available will not be reduced by shares withheld
to satisfy tax withholding obligations. Only the net number of shares issued upon the exercise of options by tender of previously owned shares
will be deducted from the shares available under the Directors Plan.

     Administration . The administrator of our Directors Plan will be either our board of directors or a committee of the board appointed by
our board to administer the plan. Subject to the provisions of the plan and except for the automatic grant of quarterly stock awards as described
below, the administrator determines in its discretion the persons to whom and the times at which awards are granted, the types and sizes of such
awards, and all of their terms and conditions. All awards must be evidenced by a written agreement between us and the participant. The
administrator may amend, cancel or renew any award, waive any restrictions or conditions

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applicable to any award, and accelerate, continue, extend or defer the vesting of any award. The administrator has the authority to construe and
interpret the terms of the Directors Plan and awards granted under it.

     Eligibility. An award may be granted under the Directors Plan only to a person who is serving, at the time of grant, as a member of our
board of directors and who is neither our employee nor a consultant to us or any of our parents or subsidiaries. We refer to such persons as
Outside Directors.

      Automatic Grant of Stock Awards. The Directors Plan provides for the automatic grant of a stock award to each eligible Outside
Director on the first day of each of our fiscal quarters, commencing with the first quarter that begins after the effective date of the registration
of our common stock in connection with this offering and continuing during the ten-year term of the plan. These awards are granted as
compensation for our Outside Directors’ service during the preceding fiscal quarter, and only those Outside Directors who have served for the
entire preceding fiscal quarter are eligible. Each eligible Outside Director will receive a basic quarterly award of 3,750 shares of our common
stock. This basic award will be increased by 1,250 shares for each committee of the board on which the participant served for the entire
preceding fiscal quarter and by an additional 1,250 shares for each such committee for which the participant served as chairperson for the entire
preceding fiscal quarter. The shares of our common stock subject to these automatic quarterly awards will be fully vested upon grant.

      Stock Options. The administrator may grant nonstatutory stock options to any Outside Director, the exercise price of which will equal
the fair market value of a share of our common stock on the date of grant. Such options will vest and become exercisable at such times or upon
such events and subject to such terms, conditions, performance criteria or restrictions as specified by the administrator. Unless a longer period
is provided by the administrator, an option generally will remain exercisable for three months following the participant’s termination of service,
except that if service terminates as a result of the participant’s death or disability, the option generally will remain exercisable for twelve
months, but in any event not beyond the expiration of its term.

      Restricted Stock Awards. The administrator may grant restricted stock bonus awards under the Directors Plan to any Outside Director
in consideration for the participant’s services to us. Such awards will be substantially similar to the restricted stock bonus awards described
above in connection with the Equity Plan.

     Restricted Stock Units . The administrator may grant restricted stock unit awards under the Directors Plan to any Outside Director in
consideration for the participant’s services to us. Such awards will be substantially similar to the restricted stock unit awards described above in
connection with the Equity Plan.

      Change in Control. In the event of a change in control, the acquiring or successor entity may assume all stock options outstanding
under the Directors Plan or substitute substantially equivalent options. Any such options that are assumed or replaced with equivalent options
will continue to be exercisable for six months, but not beyond the expiration of the option’s term, following the participant’s termination of
service if such service terminates for any reason, except death or disability, within 12 months following the change in control. If the stock
options are not assumed by the acquiring or successor entity, then all unexercised portions of such options will terminate. Alternatively, the
administrator may provide for the cancellation of outstanding stock options in exchange for a payment in cash, stock or other property having a
value equal to the difference between the exercise price of the option and the consideration payable in the change in control transaction with
respect to the number of vested shares subject to the option. The vesting of options granted under the Directors Plan will automatically
accelerate in full, and the administrator may accelerate the vesting and settlement of any other award granted under the Directors Plan upon a
change in control.

     Amendment and Termination. The Directors Plan will continue in effect until terminated by the administrator. At the present time no
awards will be granted under the Directors Plan after the tenth anniversary of the date of its approval by our stockholders. The administrator
may amend, suspend or terminate the Directors Plan at any time, provided that without stockholder approval, the Directors Plan cannot be
amended to increase

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the number of shares authorized or effect any other change that would require stockholder approval under any applicable law or listing rule.
Amendment, suspension or termination of the Directors Plan may not adversely affect any outstanding award without the consent of the
participant, unless such amendment, suspension or termination is necessary to comply with applicable law.

      2004 Employee Stock Purchase Plan

     Our 2004 Employee Stock Purchase Plan, or the Purchase Plan, was adopted by our board of directors in December 2003 and by our
stockholders in February 2004, and will become effective upon the closing of this offering.

      Purpose. The purpose of the Purchase Plan is to advance our interests and the interests of our stockholders by providing an incentive to
attract, retain and reward eligible employees. It is intended to qualify as an ―employee stock purchase plan‖ under Section 423 of the Internal
Revenue Code.

      Shares Subject to Purchase Plan . A total of 1,000,000 shares of our common stock are initially authorized and reserved for sale under
the Purchase Plan. In addition, the Purchase Plan provides for an automatic annual increase in the number of shares available for issuance under
the plan on February 1 of each year beginning in 2005 and continuing through 2013 equal to the smallest of (1) 1 percent of our then
outstanding shares of common stock, (2) one million shares or (3) a lesser number of shares as our board may determine. Appropriate
adjustments will be made in the number of authorized shares and in outstanding purchase rights to prevent dilution or enlargement of
participants’ rights in the event of a stock split or other change in our capital structure. Shares subject to purchase rights which expire or are
canceled will again become available for issuance under the Purchase Plan.

      Administration . Our board of directors or a committee of the board will serve as administrator of the Purchase Plan. The administrator
has the authority to construe and interpret the terms of the Purchase Plan and the purchase rights granted under it, to determine eligibility to
participate, and to establish policies and procedures for administration of the plan.

      Eligibility . Our employees and employees of any parent or subsidiary corporation designated by the administrator are eligible to
participate in the Purchase Plan if they are customarily employed by us for more than 20 hours per week and more than five months in any
calendar year. However, an employee may not be granted a right to purchase stock under the Purchase Plan if: (1) the employee immediately
after grant would own stock possessing 5 percent or more of the total combined voting power or value of all classes of our capital stock or of
any parent or subsidiary corporation, or (2) the employee’s rights to purchase stock under all of our employee stock purchase plans would
accrue at a rate that exceeds $25,000 in value for each calendar year of participation in such plans.

      Offering Periods . The Purchase Plan is implemented through a series of sequential offering periods, generally six months in duration
beginning on the first trading day on or after March 1 and September 1 of each year, except that the first offering period will commence on the
effective date of the Purchase Plan and will end on August 31, 2004. The administrator is authorized to establish additional or alternative
sequential or overlapping offering periods and offering periods having a different duration or different starting or ending dates, provided that no
offering period may have a duration exceeding 27 months.

      Participation. Eligible employees who enroll in the Purchase Plan may elect to have up to 15 percent of their eligible compensation
withheld and accumulated for the purchase of shares at the end of each offering period in which they participate. However, all eligible
employees will be automatically enrolled in the Purchase Plan’s initial offering period and may only purchase shares by delivering an exercise
notice and payment of the applicable purchase price prior to the initial purchase date, provided that participants may elect to begin payroll
deductions under the Purchase Plan after the effective date of a Form S-8 registration statement registering the

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shares reserved for issuance under the Purchase Plan. Participants may voluntarily withdraw from the Purchase Plan at any time during an
offering period and receive a refund, without interest, of all amount withheld from compensation not previously applied to purchase shares.
Participation ends automatically upon termination of employment.

       Purchase of Shares . Amounts accumulated for each participant are used to purchase shares of our common stock at the end of each
offering period at a price generally equal to 85 percent of the lower of the fair market value of our common stock at the beginning of an
offering period or at the end of the offering period. Prior to commencement of an offering period, the administrator is authorized to reduce, but
not increase, this purchase price discount for that offering period, or, under circumstances described in the Purchase Plan, during that offering
period. The maximum number of shares a participant may purchase in any six-month offering period is the lesser of 750 shares or a number of
shares determined by dividing $12,500 by the fair market value of a share of our common stock at the beginning of the offering period. Prior to
the beginning of any offering period, the administrator may alter the maximum number of shares that may be purchased by any participant
during the offering period or specify a maximum aggregate number of shares that may be purchased by all participants in the offering period. If
insufficient shares remain available under the plan to permit all participants to purchase the number of shares to which they would otherwise be
entitled, the administrator will make a pro rata allocation of the available shares. Any amounts withheld from participants’ compensation in
excess of the amounts used to purchase shares will be refunded, without interest.

      Change in Control . In the event of a change in control, an acquiring or successor corporation may assume our rights and obligations
under the Purchase Plan. If the acquiring or successor corporation does not assume such rights and obligations, then the purchase date of the
offering periods then in progress will be accelerated to a date prior to the change in control.

      Amendment and Termination. The Purchase Plan will continue in effect until terminated by the administrator. The administrator may
amend, suspend or terminate the Purchase Plan at any time, provided that unless stockholder approval is obtained within 12 months of such
amendment, the plan cannot be amended to increase the number of shares authorized or change the definition of the corporations that may be
designated by the administrator for participation in the plan. Amendment, suspension or termination of the Purchase Plan may not adversely
affect any purchase rights previously granted without the consent of the participant, unless such amendment, suspension or termination is
necessary to qualify the plan under Section 423 of the Internal Revenue Code or to comply with applicable law, or is effected after a
determination by the administrator that continuation of the plan or an offering period would result in unfavorable accounting consequences to
us as a result of a change, after the plan’s effective date, in the generally accepted accounting principles applicable to the Purchase Plan.

      401(k) Plan

      In June 2000, our board of directors adopted the salesforce.com, inc. 401(k) Plan, which is intended to be a tax-qualified defined
contribution plan under Sections 401(a) and 401(k) of the Internal Revenue Code. Under the terms of the plan as amended and restated
effective January 1, 2003, eligible employees may elect to contribute up to 50 percent of their eligible compensation as salary deferral
contributions to the plan, subject to certain statutorily prescribed limits ($12,000 in calendar year 2003). In addition, effective January 1, 2002,
eligible employees may elect to contribute an additional amount of their eligible compensation as a catch-up contribution to the 401(k) plan,
provided that such eligible employees are anticipated to reach age 50 before the end of the applicable year and subject to certain statutorily
prescribed limits, $2,000 in calendar year 2003.

      The 401(k) plan also permits, but does not require, that we make discretionary matching contributions. To date, we have not made any
such discretionary matching contributions to the plan. As a tax-qualified plan, we can generally deduct contributions to the 401(k) plan when
made, and such contributions are not taxable to participants until distributed from the plan. Pursuant to the terms of the 401(k) plan,
participants may direct the trustees to invest their accounts in selected investment options.

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Limitation of Liability and Indemnification

      Our amended and restated certificate of incorporation will contain provisions limiting the liability of directors. It will provide that a
director will not be personally liable to us or to our stockholders for monetary damages for any breach of fiduciary duty as a director, but will
continue to be subject to liability for the following:

            any breach of the director’s duty of loyalty to us or to our stockholders;

            acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law;

            unlawful payment of dividends or unlawful stock repurchases or redemptions; and

            any transaction from which the director derived an improper personal benefit.

      Our bylaws provide that:

            we are required to indemnify our directors and officers to the fullest extent permitted by the Delaware General Corporation Law,
             subject to limited exceptions where indemnification is not permitted by applicable law;

            we are required to advance expenses, as incurred, to our directors and officers in connection with a legal proceeding to the fullest
             extent permitted by the Delaware General Corporation Law, subject to limited exceptions; and

            the rights conferred in the bylaws are not exclusive.

       If Delaware law is amended to authorize corporate action further eliminating or limiting the personal liability of a director, then the
liability of our directors will be eliminated or limited to the fullest extent permitted by Delaware law, as so amended. Our amended and restated
certificate of incorporation will not eliminate a director’s duty of care and, in appropriate circumstances, equitable remedies such as injunctive
or other forms of non-monetary relief remain available under Delaware law. Our amended and restated certificate of incorporation will not
affect a director’s responsibilities under any other laws, such as the federal securities laws or state or federal environmental laws.

      In addition, we have entered into agreements to indemnify our directors and executive officers to the fullest extent permitted under
Delaware law, including the non-exclusivity provisions of Delaware law, and our bylaws, subject to limited exceptions. These agreements,
among other things, provide for indemnification of our directors and executive officers for fees, expenses, judgments, fines and settlement
amounts incurred by any of these persons in any action or proceeding to which any of those persons is, or is threatened to be, made a party by
reason of the person’s service as a director or officer, including any action by us, arising out of that person’s services as our director or officer
or that person’s services provided to any other company or enterprise at our request. We believe that these bylaw provisions and agreements are
necessary to attract and retain qualified persons as directors and officers. We also intend to maintain liability insurance for our officers and
directors.

      The limitation of liability and indemnification provisions in our amended and restated certificate of incorporation and bylaws may
discourage stockholders from bringing a lawsuit against directors for breach of their fiduciary duties. They may also reduce the likelihood of
derivative litigation against directors and officers, even though an action, if successful, might benefit us and our stockholders. A stockholder’s
investment may be adversely affected to the extent we pay the costs of settlement and damage awards against directors and officers pursuant to
these indemnification provisions.

     Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling us
pursuant to the foregoing provisions, we have been informed that in the opinion of the SEC, this indemnification is against public policy as
expressed in the Securities Act and is therefore unenforceable.

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                               CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

      Since our inception on February 3, 1999, we have not been a party to, and we have no plans to be a party to, any transaction or series of
similar transactions in which the amount involved exceeded or will exceed $60,000 and in which any current director, executive officer, holder
of more than 5 percent of our common stock or entities affiliated with them had or will have an interest, other than as described under
―Management‖ and in the transactions described below. For transactions described in this section that occurred prior to July 1999, we have
adjusted the share and per share purchase price information to reflect a five-for-one stock split of our common and preferred stock effected in
July 1999.

Stock Sales to Insiders

      The following table summarizes sales by us of our common stock since inception to our executive officers, directors and holders of more
than 5 percent of our total voting securities.
                                                                                           Shares of                  Total            Date of
                                                                                         Common Stock             Purchase Price      Purchase

Executive Officers and Directors:
Marc Benioff                                                                               10,000,000         $          20,000        4/27/99
                                                                                              500,000                    10,000        7/15/99
Jim Steele                                                                                    337,500                   371,250       12/23/02
Steve Cakebread                                                                                50,000                    55,000        8/20/02
                                                                                              200,000                   220,000        12/5/02
Jim Cavalieri                                                                                 275,000                     8,250        7/27/99
                                                                                               50,000                     1,500         5/7/00
Parker Harris                                                                               1,250,000                     2,500        7/22/99
David Moellenhoff                                                                           1,250,000                     2,500        7/22/99
Magdalena Yesil                                                                               500,000                    10,000        7/20/99
Five Percent Stockholders:
Halsey Minor                                                                                  500,000                    10,000         7/27/99

     In April 1999, we issued a $62,875 convertible note payable to Mr. Benioff. During fiscal 2000, $20,000 of the note was converted into
10,000,000 shares of our common stock, $10,000 of the note was used to exercise an option grant for 500,000 shares of our common stock, and
$32,875 plus accrued interest was repaid.

     In addition, in January 2004, our board of directors authorized the issuance of 10,000 shares and 22,500 shares of our common stock to
Mr. Minor and Ms. Yesil, respectively, in exchange for their past services as members of our board of directors.

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      The following table summarizes sales by us of our preferred stock since inception to our executive officers, directors and holders of more
than 5 percent of our total voting securities.
                                       Shares of           Shares of              Shares of         Shares of
                                       Series A            Series B               Series C          Series D               Total         Date of
                                    Preferred Stock     Preferred Stock        Preferred Stock   Preferred Stock       Purchase Price   Purchase

Executive Officers and
  Directors:
Marc Benioff                           22,000,000                   —                      —                 —     $         440,000      4/27/99
                                               —             1,375,000                     —                 —               412,500      6/28/99
                                               —                    —                 571,429                —             1,000,000     11/22/99
                                               —                    —                      —          1,029,306            4,004,000      3/30/00
                                               —                    —                      —             62,990              245,031     11/28/00
Parker Harris                           1,250,000                   —                      —                 —                25,000      4/27/99
                                               —                83,335                     —                 —                25,000      6/28/99
David Moellenhoff                       1,250,000                   —                      —                 —                25,000      4/27/99
                                               —                83,335                     —                 —                25,000      6/28/99
Stratton Sclavos                               —                    —                      —             25,707              100,000      3/30/00
Magdalena Yesil                                —             1,666,665                     —                 —               500,000      6/28/99

Five Percent Stockholders:
Attractor Funds                                  —                  —               1,428,572                —             2,500,001     11/22/99
                                                 —                  —                      —          3,341,902           13,000,000      3/30/00
Halsey Minor                                     —           5,000,000                     —                 —             1,500,000      6/28/99
                                                 —                  —               2,857,142                —             5,000,000      1/22/99
                                                 —                  —                      —          3,341,902           13,000,000      3/30/00

      We sold 25,850,000 shares of our Series A preferred stock in April 1999 at $0.02 per share, for total proceeds of $517,000. We sold
12,588,345 shares of our Series B preferred stock in June 1999 at $0.30 per share, for total proceeds of $3,776,504. We sold 7,526,640 shares
of our Series C preferred stock in November 1999 at $1.75 per share, for total proceeds of $13,171,620. We sold 12,059,360 shares of our
Series D preferred stock from March 2000 to June 2001 at $3.89 per share, for total proceeds of $46,910,910. In conjunction with the sale of
our Series D preferred stock, we issued warrants to purchase 580,639 shares of Series D preferred stock at an exercise price of $3.89 per share
to Attractor Funds.

Director and Officer Indemnification

      Our amended and restated certificate of incorporation will contain provisions limiting the liability of our directors and our bylaws contain
provisions requiring us to indemnify our officers and directors. In addition, we have entered into agreements to indemnify our directors and
executive officers to the fullest extent permitted under Delaware law. See ―Management—Limitation of Liability and Indemnification.‖

Other Transactions with Stockholders

      Subleasing office space

      We sublease a portion of our San Francisco office facility to a company in which Mr. Benioff, our Chief Executive Officer, is a majority
stockholder. In October 2001, the sublease tenant paid us $110,000 for early termination of the sublease agreement with respect to a portion of
the leased space.

      Transactions with the salesforce.com/foundation

      In January 1999, the salesforce.com/foundation, commonly referred to as the Foundation, a non-profit public charity, was chartered with
the intent of building philanthropic programs that were particularly focused on

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youth and technology. Our chairman, Mr. Benioff, is the chairman of the Foundation. He, Mr. Moellenhoff, our Chief Technology Officer, and
Mr. Hassenfeld, one of our board members, hold three of the Foundation’s seven board seats. In June 2002, we issued warrants to purchase
500,000 shares of our common stock to the Foundation at an exercise price per share of $1.10. As of January 31, 2004, the Foundation had not
exercised these warrants. Additionally, through the donation of shares of our common stock by our officers and employees, the Foundation
owned 221,030 shares of common stock as of January 31, 2004.

      Since the Foundation’s inception, we have provided, at no charge, certain resources to Foundation employees such as office space. The
value of these items totaled $60,000 in each of fiscal 2002, 2003 and 2004.

     In addition, as part of our commitment to the Foundation, we have donated subscriptions for our service to a variety of registered section
501(c)(3) nonprofit organizations. The fair value of these donated subscriptions is currently $150,000 per month.

Japanese Joint Venture

       Our Japanese joint venture, Kabushiki Kaisha salesforce.com, was established pursuant to a joint venture agreement that we entered into
with SunBridge, Inc., a Japanese corporation, in December 2000. The agreement provides that the joint venture will terminate if the joint
venture becomes a public company or is sold to a third party, or upon the mutual agreement of the parties. In addition, if we commit a breach
of, or if we fail to perform, our material obligations under the joint venture agreement which we do not cure in a timely manner, SunBridge can
require that we 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 perform, its material obligations under the joint
venture agreement which it does not cure in a timely manner, or if SunBridge enters into bankruptcy proceedings, we can require that
SunBridge sell to us all of its shares in the joint venture. The purchase price for SunBridge’s shares would be their fair market value less a
specified discount. Additionally, if we and SunBridge are unable to agree on certain operational matters, SunBridge can require that we
purchase all of its shares of the joint venture at a price equal to the then fair market value, and we can require that SunBridge sell to us all of its
shares of the joint venture at a price equal to the then fair market value. Fair market value is to be determined by mutual agreement of the
parties, or if the parties are unable to agree, by an independent appraiser.

      We have also entered into a consulting agreement with the joint venture under which we have agreed to provide management and
administrative services to the Japanese joint venture. We charge the joint venture for providing these services at rates that we consider to be fair
value.

Employee Loans

      We have provided loans totaling approximately $1.5 million to employees, none of whom is an executive officer or director, in
connection with the early exercise of stock options. We have received full recourse promissory notes from each individual in connection with
these loans. The promissory notes have an annual interest rate of 6 percent and are due at various dates through September 2005.

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                                                          PRINCIPAL STOCKHOLDERS

      The following table sets forth, as of January 31, 2004, information regarding beneficial ownership of our capital stock by the following:

             each person, or group of affiliated persons, known by us to be the beneficial owner of more than 5 percent of any class of our
              voting securities;

             each of our directors;

             each of the named executive officers; and

             all of our directors and executive officers as a group.

      Beneficial ownership is determined in accordance with the rules and regulations of the SEC, and does not necessarily indicate beneficial
ownership for any other purpose. In computing the number of shares beneficially owned by a person and the percentage ownership of that
person, shares of common stock subject to options and warrants held by that person are deemed to be outstanding if the options and warrants
are exercisable within 60 days of the date of this table. The shares subject to options and warrants are not deemed to be outstanding for the
purpose of computing the percentage ownership of any other person. All percentages in this table are based on a total of 89,554,971 shares of
our convertible preferred and common stock outstanding on January 31, 2004 and 99,554,971 shares of common stock to be outstanding
following completion of this offering and conversion of all outstanding shares of our convertible preferred stock into common stock upon the
closing of the offering. Except as indicated in the footnotes below, we believe, based on information furnished to us and subject to community
property laws where applicable, that the persons and entities named in the table below have sole voting and investment power with respect to
all shares of common stock shown as beneficially owned by them. Unless otherwise indicated, the address for each of the stockholders in the
table below is salesforce.com, inc., The Landmark @ One Market, Suite 300, San Francisco, California 94105.
                                                                                                                  Beneficially Owned

                                                                                                      Shares                         Percent

                                                                                                                           Before               After
Name and Address of Beneficial Owner                                                                                      Offering             Offering

Executive Officers and Directors:
Marc Benioff (1)                                                                                     28,179,071              31.5 %               28.3 %
Parker Harris (2)                                                                                     2,370,507               2.7                  2.4
Magdalena Yesil                                                                                       2,089,165               2.3                  2.1
David Moellenhoff (3)                                                                                 1,642,005               1.8                  1.7
Jim Steele (4)                                                                                        1,350,000               1.5                  1.4
Craig Ramsey (5)                                                                                      1,300,000               1.5                  1.3
Steve Cakebread (6)                                                                                   1,000,000               1.1                  1.0
Jim Cavalieri (7)                                                                                       750,000                 *                    *
Sanford R. Robertson (8)                                                                                300,000                 *                    *
Larry Tomlinson (9)                                                                                     300,000                 *                    *
Stratton Sclavos (10)                                                                                   275,707                 *                    *
Alan Hassenfeld (11)                                                                                    200,000                 *                    *
  All directors and executive officers as a group (14 persons)(12)                                   40,006,455              44.7 %               40.2 %
Five Percent Stockholders:
Halsey Minor (13)                                                                                     9,109,044              10.2 %                 9.2 %
Attractor Funds (14)                                                                                  5,351,113               6.0                   5.4

*         Less than one percent (1%).

(1)   Includes 970,000 shares held in the Marc R. Benioff 2003 Annuity Trust.

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(2)     Includes 500,000 shares held by the G. Parker Harris III, Trustee, The G. Parker Harris III Grantor Retained Annuity Trust, dated
        December 19, 2003 and 500,000 shares held by the Holly L. Johnson, Trustee, The Holly L. Johnson Grantor Retained Annuity Trust,
        dated December 19, 2003.

(3)     Includes 62,500 shares held by the David V. Moellenhoff, Trustee, The David V. Moellenhoff Grantor Retained Annuity Trust, dated
        December 15, 2003, 62,500 shares held by the Pamela A. Moellenhoff, Trustee, The Pamela A. Moellenhoff Grantor Retained Annuity
        Trust, dated December 15, 2003 and 1,517,005 shares held by David V. Moellenhoff and Pamela A. Moellenhoff, Trustees, The
        Moellenhoff Family Trust, dated February 12, 2002.

(4)     Includes 1,012,500 shares issuable upon the exercise of options that are exercisable within 60 days of January 31, 2004, of which
        140,625 will be vested and 871,875 will be unvested. Also includes 5,500 shares held in trust for which Mr. Steele has beneficial
        ownership.

(5)     Includes 300,000 shares issuable upon the exercise of options that are exercisable within 60 days of January 31, 2004, of which 75,000
        will be vested and 225,000 will be unvested.

(6)     Includes 750,000 shares issuable upon the exercise of options that are exercisable within 60 days of January 31, 2004, of which 208,333
        will be vested and 541,667 will be unvested.

(7)     Includes 425,000 shares issuable upon the exercise of options that are exercisable within 60 days of January 31, 2004, of which 304,169
        will be vested and 120,831 will be unvested.

(8)     Includes 300,000 shares issuable upon the exercise of options that are exercisable within 60 days of January 31, 2004. None of the
        300,000 shares will have vested within 60 days of January 31, 2004.

(9)     Includes 300,000 shares issuable upon the exercise of options that are exercisable within 60 days of January 31, 2004. None of the
        300,000 shares will have vested within 60 days of January 31, 2004.

(10)    Includes 250,000 shares issuable upon the exercise of options that are exercisable within 60 days of January 31, 2004, all of which will
        be vested.

(11)    Includes 200,000 shares issuable upon the exercise of options granted to Mr. Hassenfeld in December 2003. None of the 200,000 shares
        will have vested within 60 days of January 31, 2004.

(12)    Does not include 650,000 shares issuable upon the exercise of options granted to Ms. Sueltz in March 2004. None of the 650,000 shares
        will have vested within 60 days of January 31, 2004.

(13)    Includes 9,099,044 shares held by The Minor Revocable Trust.

(14)    Includes 580,639 shares issuable upon the exercise of warrants that may be exercised at any time. Attractor Funds has informed us that
        Harvey Allison and Gigi Brisson have voting and dispositive control of these shares. The address of Attractor Funds is 1440 Chapin
        Avenue, Suite 201, Burlingame, California 94010.

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                                                    DESCRIPTION OF CAPITAL STOCK

      Upon completion of this offering and the filing of our amended and restated certificate of incorporation immediately following the
closing of this offering, our authorized capital stock will consist of 400,000,000 shares of common stock, $0.001 par value, and 5,000,000
shares of undesignated preferred stock, $0.001 par value. The following description of our capital stock does not purport to be complete and is
subject to, and qualified in its entirety by, our amended and restated certificate of incorporation and bylaws, which are exhibits to the
registration statement of which this prospectus forms a part.

Common Stock

      As of January 31, 2004, 89,554,971 shares of our common stock were outstanding and held of record by 366 stockholders. This amount
assumes the conversion upon the closing of this offering of all outstanding shares of our convertible preferred stock, totaling 58,024,345 shares,
into common stock. In addition, as of January 31, 2004, 15,928,395 shares of our common stock were subject to outstanding options and
1,299,496 shares of our common stock were subject to outstanding warrants. Upon completion of this offering, 99,554,971 shares of our
common stock will be outstanding, assuming no exercise of outstanding stock options or warrants or the underwriters’ over-allotment option.

       Each share of our common stock entitles its holder to one vote on all matters to be voted upon by our stockholders. Subject to preferences
that may apply to any of our outstanding convertible preferred stock, holders of our common stock will receive ratably any dividends our board
of directors declares out of funds legally available for that purpose. If we liquidate, dissolve or wind up, the holders of common stock are
entitled to share ratably in all assets remaining after payment of liabilities and any liquidation preference of any of our outstanding convertible
preferred stock. Our common stock has no preemptive rights, conversion rights, or other subscription rights or redemption or sinking fund
provisions. The shares of our common stock to be issued upon completion of this offering will be fully paid and non-assessable.

Preferred Stock

      Immediately prior to the consummation of this offering, we will have 58,024,345 shares of preferred stock outstanding, consisting of
shares of Series A, Series B, Series C and Series D preferred stock. Each share of Series A, B and C preferred stock will automatically convert
into shares of common stock if either (1) agreed to by holders of a majority of the Series A, B and C preferred stock, or (2) the price per share
of this offering is at least $3.00 and the aggregate proceeds from this offering are at least $20.0 million. Each share of Series D preferred stock
will automatically convert into shares of common stock if either (1) agreed to by holders of a majority of the Series D preferred stock, or (2) the
price per share of this offering is at least $5.00 and the aggregate proceeds from this offering are at least $20.0 million, and provided that the
aggregate value of all shares of our common stock outstanding prior to the offering, together with all shares of common stock issuable upon the
conversion or exercise of other securities outstanding or reserved for issuance under our stock option plans before the offering, valued at the
price per share established in the offering, is at least $535.5 million.

      After the consummation of this offering and the filing of our amended and restated certificate of incorporation, our board of directors will
have the authority, without further action by our stockholders, to issue up to 5,000,000 shares of preferred stock in one or more series. Our
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 our common stock, diluting the
voting power of our common stock, impairing the liquidation rights of our common stock, or delaying or preventing a change in control. The
ability to issue preferred stock could delay or impede a change in control. After the completion of this offering, no shares of preferred stock
will be outstanding, and we currently have no plan to issue any shares of preferred stock.

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Warrants

      As of January 31, 2004, warrants to purchase a total of 1,299,496 shares of our common stock were outstanding with exercise prices
ranging from $1.10 to $3.89 per share and a weighted average exercise price of $2.43 per share. Each warrant contains provisions for the
adjustment of the exercise price and the number of shares issuable upon the exercise of the warrant in the event of stock dividends, stock splits,
reorganizations and reclassifications and consolidations.

Registration Rights

      The holders of 58,689,984 shares of our common stock issuable upon the automatic conversion of all outstanding shares of our
convertible preferred stock, including 665,639 shares of common stock issuable upon the exercise of warrants to purchase our convertible
preferred stock, are entitled to rights to cause their shares to be registered under the Securities Act. These registration rights are contained in
our second amended and restated rights agreement and in certain outstanding warrants, which incorporate the terms of the rights agreement.
These registration rights include demand registration rights, piggyback registration rights exercisable in connection with any registration
proposed by us, and Form S-3 registration rights, as described below. The registration rights under the rights agreement will expire seven years
following the completion of this offering, or for any particular stockholder with registration rights, at such time following this offering when all
securities held by that stockholder subject to registration rights may be sold pursuant to Rule 144 under the Securities Act during any three
month period.

      Demand Registration Rights

       At any time six months after the closing of this offering, and before the expiration of these registration rights, if requested by the holders
of at least a majority of our then outstanding shares of common stock having registration rights under the rights agreement, we will be required
to register all or a portion of their shares, as long as the portion constitutes at least 20 percent of all then outstanding shares having registration
rights. We are only required to effect two registrations in response to this demand registration right. Also, during the same period of time, if
requested by the holders of at least a majority of our then outstanding shares of common stock issued upon conversion of our Series D preferred
stock that have registration rights under the rights agreement, we will be required to register all or a portion of their shares, as long as the
portion constitutes at least 15 percent of all then outstanding shares having registration rights. We are only required to effect one registration in
response to this demand registration right. Each demand registration right exercised must cover a sale of securities with a total aggregate public
offering price, net of commissions, of more than $10.0 million. We may postpone the filing of any registration statement for up to 90 days once
in any 12-month period if we determine that the filing would be seriously detrimental to us and our stockholders. The underwriters of any
underwritten offering have the right to limit the number of shares to be included in a registration statement filed in response to the exercise of
these demand registration rights, provided that the number may not be reduced unless all other securities are excluded from the registration
statement. We must pay all expenses, except for underwriters’ discounts and commissions, incurred in connection with these demand
registration rights, except that we are not required to pay for expenses incurred if the holders who exercise these rights later withdraw their
request for registration.

      Piggyback Registration Rights

       If we register any securities for public sale, our stockholders with registration rights under the rights agreement have the right to include
their shares in the registration, subject to specified exceptions. The underwriters of any underwritten offering have the right to limit the number
of shares registered by these stockholders, subject to certain limitations. We must pay all expenses, except for underwriters’ discounts and
commissions, incurred in connection with these piggyback registration rights, except that we are not required to pay for expenses incurred in
respect of holders who exercise these rights and later withdraw their request to be included in the registration.

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      Form S-3 Registration Rights

      If we are eligible to file a registration statement on Form S-3, holders of shares of our common stock having Form S-3 registration rights
under the rights agreement can request that we register their shares, provided that the total price of the shares of common stock offered to the
public is at least $1.0 million and subject to other exceptions. We are not required to file a registration statement on Form S-3 if we have
already effected two registrations on Form S-3 at the request of the holders of shares having these registration rights in the 12-month period
prior to the holder’s request. We may postpone the filing of a registration statement for up to 90 days once in any 12-month period if we
determine that the filing would be seriously detrimental to us and our stockholders. Each holder exercising Form S-3 registration rights must
pay a pro rata portion of all expenses, except for underwriters’ discounts and commissions, based on the number of shares being offered by
such holder.

Anti-Takeover Provisions

      Some provisions of Delaware law, our amended and restated certificate of incorporation and our bylaws may have the effect of delaying,
deferring or discouraging another party from acquiring control of us.

      Delaware Law

      We are subject to Section 203 of the Delaware General Corporation Law, which regulates, subject to some exceptions, acquisitions of
publicly-held Delaware corporations. In general, Section 203 prohibits us from engaging in a ―business combination‖ with an ―interested
stockholder‖ for a period of three years following the date the person becomes an interested stockholder, unless:

            our board of directors approved the business combination or the transaction in which the person became an interested stockholder
             prior to the date the person attained this status;

            upon consummation of the transaction that resulted in the person becoming an interested stockholder, the person owned at least 85
             percent of our voting stock outstanding at the time the transaction commenced, excluding shares owned by persons who are
             directors and also officers and issued under employee stock plans under which employee participants do not have the right to
             determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or

            on or subsequent to the date the person became an interested stockholder, our board of directors approved the business
             combination and the stockholders other than the interested stockholder authorized the transaction at an annual or special meeting of
             stockholders by the affirmative vote of at least 66 / 3 percent of the outstanding stock not owned by the interested stockholder.
                                                                  2




Section 203 defines a ―business combination‖ to include:

            any merger or consolidation involving us and the interested stockholder;

            any sale, transfer, pledge or other disposition involving the interested stockholder of 10 percent or more of our assets;

            in general, any transaction that results in the issuance or transfer by us of any of our stock to the interested stockholder;

            any transaction involving us that has the effect of increasing the proportionate share of our stock owned by the interested
             stockholders; and

            the receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges, or other financial benefits
             provided by or through us.

      In general, Section 203 defines an ―interested stockholder‖ as any person who, together with the person’s affiliates and associates, owns,
or within three years prior to the time of determination of interested stockholder status did own, 15 percent or more of a corporation’s voting
stock.

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      Amended and Restated Certificate of Incorporation and Bylaw Provisions

      Following the completion of this offering, our amended and restated certificate of incorporation and bylaws will provide that:

            no action can be taken by stockholders except at an annual or special meeting of the stockholders called in accordance with our
             bylaws, and stockholders may not act by written consent;

            the approval of holders of two-thirds of the shares entitled to vote at an election of directors will be required to adopt, amend or
             repeal our bylaws or amend or repeal the provisions of our certificate of incorporation regarding the election and removal of
             directors and the ability of stockholders to take action;

            our board of directors will be expressly authorized to make, alter or repeal our bylaws;

            stockholders may not call special meetings of the stockholders or fill vacancies on the board of directors;

            our board of directors will be divided into three classes of service with staggered three-year terms. This means that only one class
             of directors will be elected at each annual meeting of stockholders, with the other classes continuing for the remainder of their
             respective terms;

            our board of directors will be authorized to issue preferred stock without stockholder approval;

            directors may only be removed for cause by the holders of two-thirds of the shares entitled to vote at an election of directors; and

            we will indemnify officers and directors against losses that may incur investigations and legal proceedings resulting from their
             services to us, which may include services in connection with takeover defense measures.

Transfer Agent and Registrar

      Computershare Investor Services, LLC has been appointed as the transfer agent and registrar for our common stock.

Exchange Listing

    We have applied to list our common stock on the New York Stock Exchange. In connection with the listing of the common stock on the
New York Stock Exchange, the underwriters intend to sell round lots of 100 shares or more to a minimum of 2,000 beneficial owners.

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                                                  SHARES ELIGIBLE FOR FUTURE SALE

      Prior to this offering, no public market existed for our common stock. Market sales of shares of our common stock after this offering and
from time to time, and the availability of shares for future sale, may reduce the market price of our common stock. Sales of substantial amounts
of our common stock, or the perception that these sales could occur, could adversely affect prevailing market prices for our common stock and
could impair our future ability to obtain capital, especially through an offering of equity securities.

      Based on shares outstanding on January 31, 2004, upon completion of this offering, 99,554,971 shares of common stock will be
outstanding, assuming no outstanding options or warrants are exercised. Of these outstanding shares, all of the 10,000,000 shares sold in this
offering will be freely tradable without restrictions or further registration under the Securities Act (assuming no exercises of the underwriters’
over allotment option), unless the shares are purchased by our affiliates as that term is defined under Rule 144 under the Securities Act.
                                                                  Number of Shares
                                                                  Eligible for Sale in
                                                                  U.S. Public Market/
                                                                       Percent of
Days after Effective Date                                         Outstanding Stock                                Comment

Upon effectiveness                                              10,000,000/10.0%           Shares sold in this offering
At 180 days after effectiveness and                                                        Shares eligible for sale under Rules 144 and 701 upon
  various times thereafter                                      89,554,971/90.0%             expiration of lockup agreements

      Additionally, of the options to purchase 15,928,395 shares and warrants to purchase 1,299,496 shares of our common stock outstanding
as of January 31, 2004, options and warrants exercisable for approximately            shares of common stock will be vested and eligible for
sale 180 days after the effective date of this offering.

Rule 144

       In general, under Rule 144 as currently in effect, beginning 90 days after the effective date of this offering, a person who has beneficially
owned restricted securities for at least one year, including the holding period of any prior owner other than one of our affiliates, is entitled to
sell a number of restricted shares within any three-month period that does not exceed the greater of (1) 1 percent of the number of shares of our
common stock then outstanding, which will equal 995,550 shares immediately after the offering, and (2) the average weekly trading volume of
our common stock during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale. Sales of restricted
shares under Rule 144 are also subject to requirements regarding the manner of sale, notice, and the availability of current public information
about us. Rule 144 also provides that affiliates that sell shares of our common stock that are not restricted shares must nonetheless comply with
the same restrictions applicable to restricted shares, other than the holding period requirement.

Rule 144(k)

     Under Rule 144(k), a person who is not deemed to have been our affiliate at any time during the 90 days preceding a sale and who has
beneficially owned the shares proposed to be sold for at least two years, including the holding period of any prior owner other than an affiliate,
may sell those shares without complying with the manner-of-sale, public information, volume limitation or notice provisions of Rule 144.

Rule 701

      Under Rule 701, shares of our common stock acquired upon the exercise of currently outstanding options or pursuant to other rights
granted under our stock plans may be resold, to the extent not subject to lock-up

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agreements, (1) by persons other than affiliates, beginning 90 days after the effective date of this offering, subject only to the manner-of-sale
provisions of Rule 144, and (2) by affiliates, subject to the manner-of-sale, current public information, and filing requirements of Rule 144, in
each case, without compliance with the one-year holding period requirement of Rule 144. As of January 31, 2004, options to purchase a total of
15,928,395 shares of common stock were outstanding, all of which are eligible for early exercise. Of the total number of shares of our common
stock issuable under these options, all are subject to contractual lock-up agreements with us or the underwriters.

Form S-8 Registration Statements

      We intend to file one or more registration statements on Form S-8 under the Securities Act following this offering to register the shares of
our common stock that are issuable pursuant to our 1999 Stock Option Plan, 2004 Equity Incentive Plan, 2004 Outside Directors Stock Plan,
and 2004 Employee Stock Purchase Plan. These registration statements are expected to become effective upon filing. Shares covered by these
registration statements will then be eligible for sale in the public markets, subject to any applicable lock-up agreements and to Rule 144
limitations applicable to affiliates.

Lock-up Agreements

      Our officers, directors, and holders of substantially all of our outstanding stock have agreed not to, among other things, sell or otherwise
transfer the economic benefit of, directly or indirectly, any shares of our common stock, or any security convertible into or exchangeable or
exercisable for our common stock, without the prior written consent of Morgan Stanley & Co. Incorporated for a period of 180 days from the
date of the registration statement of which this prospectus is part. The lock-up agreements permit transfers of shares of our common stock
purchased on the open market and, subject to certain restrictions, transfers of shares as a gift, to trusts or immediate family members, or to
certain entities or persons affiliated with the stockholder. Morgan Stanley & Co. Incorporated may, in its sole discretion, at any time, and
without notice, release for sale in the public market all or any portion of the shares subject to the lock-up agreements. All of the shares that are
not subject to the underwriters’ lock-up agreements are subject to similar contractual lock-up restrictions with us.

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                                                                UNDERWRITERS

     Under the terms and subject to the conditions contained in an underwriting agreement dated the date of this prospectus, the underwriters
named below, for whom Morgan Stanley & Co. Incorporated, Deutsche Bank Securities Inc., UBS Securities LLC, Wachovia Capital Markets,
LLC and William Blair & Company, L.L.C. are acting as representatives, have severally agreed to purchase, and we have agreed to sell to
them, severally, the number of shares indicated below:
                                                                                                                                 Number of
        Name                                                                                                                      Shares

        Morgan Stanley & Co. Incorporated
        Deutsche Bank Securities Inc.
        UBS Securities LLC
        Wachovia Capital Markets, LLC
        William Blair & Company, L.L.C.


               Total                                                                                                             10,000,000


      The underwriters and the representatives are collectively referred to as the ―underwriters‖ and the ―representatives,‖ respectively. The
underwriters are offering the shares of common stock subject to their acceptance of the shares from us and subject to prior sale. The
underwriting agreement provides that the obligations of the several underwriters to pay for and accept delivery of the shares of common stock
offered by this prospectus are subject to the approval of certain legal matters by their counsel and to certain other conditions. The underwriters
are obligated to take and pay for all of the shares of common stock offered by this prospectus if any such shares are taken. However, the
underwriters are not required to take or pay for the shares covered by the underwriters’ over-allotment option described below.

      The underwriters initially propose to offer part of the shares of common stock directly to the public at the public offering price listed on
the cover page of this prospectus and part to certain dealers at a price that represents a concession not in excess of $ per share under the
public offering price. No underwriter may allow, and no dealer may reallow, any concession to other underwriters or to certain dealers. After
the initial offering of the shares of common stock, the offering price and other selling terms may from time to time be varied by the
representatives.

      We have granted to the underwriters an option, exercisable for 30 days from the date of this prospectus, to purchase up to an aggregate of
1,500,000 additional shares of common stock at the public offering price listed on the cover page of this prospectus, less underwriting discounts
and commissions. The underwriters may exercise this option solely for the purpose of covering over-allotments, if any, made in connection
with the offering of the shares of common stock offered by this prospectus. To the extent the option is exercised, each underwriter will become
obligated, subject to certain conditions, to purchase about the same percentage of the additional shares of common stock as the number listed
next to the underwriter’s name in the preceding table bears to the total number of shares of common stock listed next to the names of all
underwriters in the preceding table. If the underwriters’ option is exercised in full, the total price to the public would be $ , the total
underwriters’ discounts and commissions would be $ and total proceeds to us would be $ .

      The underwriters have informed us that they do not intend sales to discretionary accounts to exceed five percent of the total number of
shares of common stock offered by them.

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       We and all of our directors and officers and holders of substantially all of our outstanding stock have agreed that, without the prior
written consent of Morgan Stanley & Co. Incorporated on behalf of the underwriters, we and they will not, during the period ending 180 days
after the date of this prospectus:

            offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option,
             right or warrant to purchase, lend or otherwise transfer or dispose of directly or indirectly, any shares of our common stock or any
             securities convertible into or exercisable or exchangeable for our common stock; or

            enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of
             ownership of our common stock;

whether any transaction described above is to be settled by delivery of our common stock or such other securities, in cash or otherwise.

      The restrictions described in the immediately preceding paragraph do not apply to:

            the sale of shares to the underwriters;

            the issuance by us of shares of common stock upon the exercise of an option or a warrant or the conversion of a security
             outstanding on the date of this prospectus of which the underwriters have been advised in writing;

            the issuance by us of shares or options to purchase shares of our common stock, or the repurchase by us of unvested shares upon
             termination of service of an employee, director, consultant or other service provider, pursuant to our stock option plans or our
             employee stock purchase plan described above in the ―Management—Executive Compensation—Employee Benefit Plans‖ section,
             provided that the recipient of the shares is under an obligation not to sell the shares during the 180-day period;

            transactions by any person other than us relating to shares of common stock or other securities acquired in open market
             transactions after the completion of the offering of the shares;

            the establishment of a trading plan pursuant to Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, or the
             Exchange Act, provided that no transfers occur under such plan during the 180-day period;

            transfers of shares as a gift or for no consideration;

            distributions of shares to partners, members or stockholders of the stockholder; or

            transfers to certain entities or persons affiliated with the stockholder;

provided that in the case of each of the last three transactions, each donee, distributee, transferee and recipient agrees to be subject to the
restrictions described in the immediately preceding paragraph, and no filing under Section 16 of the Exchange Act is required in connection
with these transactions.

      In order to facilitate the offering of the common stock, the underwriters may engage in transactions that stabilize, maintain or otherwise
affect the price of the common stock. Specifically, the underwriters may sell more shares than they are obligated to purchase under the
underwriting agreement, creating a short position. A short sale is covered if the short position is no greater than the number of shares available
for purchase by the underwriters under the over-allotment option. The underwriters can close out a covered short sale by exercising the
over-allotment option or purchasing shares in the open market. In determining the source of shares to close out a covered short sale, the
underwriters will consider, among other things, the open market price of shares compared to the price available under the over-allotment
option. The underwriters may also sell shares in excess of the over-allotment option, creating a naked short position. The underwriters must
close out any naked short position by purchasing shares in the open market. A naked short position is more likely to be created if the
underwriters are concerned that there may be downward pressure on the price of the common stock in the open

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market after pricing that could adversely affect investors who purchase in this offering. In addition, to stabilize the price of the common stock,
the underwriters may bid for, and purchase, common stock in the open market. Finally, the underwriting syndicate may reclaim selling
concessions allowed to an underwriter or a dealer for distributing the common stock in this offering, if the syndicate repurchases previously
distributed common stock to cover syndicate short positions or to stabilize the price of the common stock. Any of these activities may stabilize
or maintain the market price of the common stock above independent market levels. The underwriters are not required to engage in these
activities, and may end any of these activities at any time.

      We have applied to list our common stock on the New York Stock Exchange.

     We have engaged Deutsche Bank Securities Inc. to provide a valuation and related services to us regarding our Japanese joint venture, for
which we will pay Deutsche Bank a customary fee.

      We and the underwriters have agreed to indemnify each other against certain liabilities, including liabilities under the Securities Act.

Pricing of the Offering

      Prior to this offering, there has been no public market for our common stock. The initial public offering price will be determined by
negotiations between us and the representatives. Among the factors to be considered in determining the initial public offering price will be our
future prospects and those of our industry in general, our sales, earnings and certain other financial and operating information in recent periods,
and the price-earnings ratios, price-sales ratios, market prices of securities, and certain financial and operating information of companies
engaged in activities similar to ours. The estimated initial public offering price range set forth on the cover page of the preliminary prospectus
is subject to change as a result of market conditions and other factors.

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                                                             LEGAL MATTERS

     The validity of the issuance of the common stock offered by this prospectus and certain other legal matters are being passed upon for us
by our counsel, Gray Cary Ware & Freidenrich LLP, East Palo Alto, California. Certain legal matters relating to the offering will be passed
upon for the underwriters by Fenwick & West LLP, Mountain View, California.

                                                                  EXPERTS

      Our consolidated financial statements at January 31, 2003 and 2004 and for each of the three years in the period ended January 31, 2004
appearing in this prospectus and registration statement have been audited by Ernst & Young LLP, independent auditors, as set forth in their
report thereon appearing elsewhere herein, and are included in reliance upon such report given on the authority of such firm as experts in
accounting and auditing.

                                             CHANGE IN INDEPENDENT ACCOUNTANTS

      The consolidated financial statements of salesforce.com as of February 29, 2000 and February 28, 2001 and 2002 and for the years ended
February 28, 2001 and 2002 and for the period from inception (February 3, 1999) to February 29, 2000 were previously audited by
PricewaterhouseCoopers LLP, certified public accountants. We dismissed PricewaterhouseCoopers LLP in September 2002 and engaged Ernst
& Young LLP to audit salesforce.com’s consolidated financial statements for the period from inception (February 3, 1999) to January 31, 2000
and the years ended January 31, 2001, 2002 and 2003. Our board of directors approved the appointment of Ernst & Young LLP as our
independent accountants in September 2002.

      There were no disagreements at any time between PricewaterhouseCoopers LLP and us on any matter of accounting principles or
practices, financial statement disclosure or auditing scope or procedures. The audit report of PricewaterhouseCoopers LLP on the consolidated
financial statements of salesforce.com as of February 28, 2002 and for the year then ended and as of February 29, 2000 and for the period from
inception (February 3, 1999) to February 29, 2000 did not contain any adverse opinion or disclaimer of opinion, nor was it qualified or
modified as to uncertainty, audit scope or accounting principles. The audit report of PricewaterhouseCoopers LLP on the consolidated financial
statements of salesforce.com as of February 28, 2001 and for the year then ended did not contain any adverse opinion or disclaimer of opinion,
nor was it qualified or modified as to audit scope or accounting principles. The audit report however was qualified as to the uncertainty
regarding our ability to continue as a going concern.

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                                        WHERE YOU CAN FIND ADDITIONAL INFORMATION

      We have filed with the SEC a registration statement on Form S-1 under the Securities Act that registers the shares of our common stock
to be sold in this offering. The registration statement, including the attached exhibits and schedules, contains additional relevant information
about us and our capital stock. The rules and regulations of the SEC allow us to omit from this prospectus certain information included in the
registration statement. For further information about us and our common stock, you should refer to the registration statement and the exhibits
and schedules filed with the registration statement. With respect to the statements contained in this prospectus regarding the contents of any
agreement or any other document, in each instance, the statement is qualified in all respects by the complete text of the agreement or document,
a copy of which has been filed as an exhibit to the registration statement. In addition, upon completion of this offering, we will file reports,
proxy statements, and other information with the SEC under the Securities Exchange Act of 1934. You may obtain copies of this information
by mail from the Public Reference Section of the SEC, 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, at prescribed rates. You
may obtain information on the operation of the public reference rooms by calling the SEC at 1-800-SEC-0330. The SEC also maintains an
internet website that contains reports, proxy statements and other information about issuers, like us, that file electronically with the SEC. The
address of that site is www.sec.gov.

      We intend to provide our stockholders with annual reports containing combined financial statements that have been examined and
reported on, with an opinion expressed by an independent accounting firm, and to file with the SEC quarterly reports containing unaudited
combined financial data for the first three quarters of each year.

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                                        INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
                                                                                     Page

Report of Ernst & Young LLP, Independent Auditors                                    F-2
Consolidated Balance Sheets                                                          F-3
Consolidated Statements of Operations                                                F-4
Consolidated Statements of Convertible Preferred Stock and Stockholders’ Deficit     F-5
Consolidated Statements of Cash Flows                                                F-7
Notes to Consolidated Financial Statements                                           F-8

                                                                    F-1
Table of Contents

                                            Report of Ernst & Young LLP, Independent Auditors

The Board of Directors
salesforce.com, inc.

     We have audited the accompanying consolidated balance sheets of salesforce.com, inc. as of January 31, 2003 and 2004, and the related
consolidated statements of operations, convertible preferred stock and stockholders’ deficit, and cash flows for each of the three years in the
period ended January 31, 2004. These financial statements are the responsibility of salesforce.com, inc.’s management. Our responsibility is to
express an opinion on these financial statements based on our audits.

      We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our opinion.

      In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of
salesforce.com, inc. at January 31, 2003 and 2004, and the consolidated results of its operations and its cash flows for each of the three years in
the period ended January 31, 2004, in conformity with accounting principles generally accepted in the United States.

    As described in Note 1 to the consolidated financial statements, in fiscal 2002, the Company changed its method of accounting for sales
commissions.

                                                                              /s/   E RNST & Y OUNG LLP

Palo Alto, California
February 21, 2004,
except for Notes 1 and 7, as to which the date is
April 15, 2004

                                                                        F-2
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                                                             salesforce.com, inc.

                                                         Consolidated Balance Sheets
                                                (in thousands, except share and per share data)
                                                                                                                                   Pro Forma
                                                                                                                                       at
                                                                                                                                   January 31,
                                                                                                   As of January 31,                  2004

                                                                                             2003,
                                                                                          As Restated                  2004

                                                                                                                                   (unaudited)
Assets
Current assets:
    Cash and cash equivalents                                                            $        8,709          $     10,463
    Short-term marketable securities                                                              7,300                25,349
    Accounts receivable                                                                           9,581                26,536
    Deferred commissions                                                                          3,045                 8,266
    Prepaid expenses and other current assets                                                     1,332                 3,532

Total current assets                                                                          29,967                   74,146
Restricted cash                                                                                   3,733                  3,912
Fixed assets, net                                                                                 4,988                  5,069
Deferred commissions, noncurrent                                                                    390                  2,890
Other assets                                                                                        595                  1,494

Total assets                                                                             $    39,673             $     87,511

Liabilities, convertible preferred stock, and stockholders’ (deficit) equity
Current liabilities:
    Accounts payable                                                                     $       606             $      2,035
    Accrued expenses and other current liabilities                                             8,487                   17,682
    Income taxes payable                                                                          —                       534
    Deferred revenue                                                                          19,171                   49,677
    Current portion of capital lease obligations                                                 531                       78

Total current liabilities                                                                     28,795                   70,006
Capital lease obligations, net of current portion                                                    78                     —
Long-term lease abandonment liability and other                                                   5,128                  1,830
Minority interest                                                                                   410                    775

Total liabilities                                                                             34,411                   72,611
Commitments and contingencies (Note 7)
Convertible preferred stock, $0.001 par value; 63,738,843 shares authorized,
  58,024,345 shares issued and outstanding at January 31, 2003 and 2004, and zero
  pro forma (aggregate liquidation preference of $64,376,033 at January 31, 2003
  and 2004) (Note 5)                                                                          61,137                   61,137      $        —
Stockholders’ (deficit) equity:
    Common stock, $0.001 par value; 200,000,000 shares authorized, 30,480,962
      and 31,530,626 issued and outstanding at January 31, 2003 and 2004 and
      89,554,971 pro forma, respectively                                                           29                       32              90
    Additional paid-in capital                                                                 30,700                   35,580          96,659
    Deferred stock-based compensation                                                          (9,588 )                 (8,251 )        (8,251 )
    Notes receivables from stockholders                                                        (1,574 )                 (1,674 )        (1,674 )
    Accumulated other comprehensive income                                                          6                       10              10
    Accumulated deficit                                                                       (75,448 )                (71,934 )       (71,934 )
Total stockholders’ (deficit) equity                                                        (55,875 )       (46,237 )   $   14,900

Total liabilities, convertible preferred stock and stockholders’ deficit                $   39,673      $   87,511

                                                              See accompanying notes.

                                                                           F-3
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                                                             salesforce.com, inc.

                                                  Consolidated Statements of Operations
                                                   (in thousands, except per share data)
                                                                                                         Fiscal Year Ended January 31,

                                                                                              2002,                    2003,
                                                                                           As Restated              As Restated              2004


Revenues:
    Subscription and support                                                           $       21,513             $     47,656           $ 85,796
    Professional services and other                                                               896                    3,335             10,227

           Total revenues                                                                      22,409                   50,991               96,023

Cost of revenues (1):
     Subscription and support                                                                    3,718                    7,199               7,782
     Professional services and other                                                             2,329                    3,164               9,491

           Total cost of revenues                                                                6,047                  10,363               17,273

Gross profit                                                                                   16,362                   40,628               78,750
Operating expenses (1):
    Research and development                                                                    5,308                    4,648                6,962
    Marketing and sales                                                                        24,605                   33,522               54,600
    General and administrative                                                                  8,317                   12,958               16,915
    Lease abandonment (recovery)                                                                7,657                       —                (3,445 )

Total operating expenses                                                                       45,887                   51,128               75,032
(Loss) income from operations                                                                 (29,525 )                (10,500 )              3,718
Interest income                                                                                    755                      471                 379
Interest expense                                                                                  (272 )                    (77 )               (22 )
Other income                                                                                         8                       98                 164

(Loss) income before provision for income taxes and minority interest                         (29,034 )                (10,008 )              4,239
Provision for income taxes                                                                         —                        —                   541

(Loss) income before minority interest                                                        (29,034 )                (10,008 )              3,698
Minority interest in consolidated joint venture                                                    425                      292                (184 )

Net (loss) income                                                                      $      (28,609 )           $      (9,716 )        $    3,514

Net (loss) income per share:
     Basic                                                                             $         (1.36 )          $       (0.37 )        $     0.12
     Diluted                                                                                     (1.36 )                  (0.37 )              0.04
     Pro forma (unaudited)                                                                                                                     0.04
Weighted-average number of shares used in per share amounts:
     Basic                                                                                     21,039                   26,375               29,605
     Diluted                                                                                   21,039                   26,375               95,409
     Pro forma (unaudited)                                                                                                                   95,409
(1) Amounts include stock-based expenses, as follows:
     Cost of revenues                                                                  $           369            $         428          $      655
     Research and development                                                                      436                      402                 462
     Marketing and sales                                                                         1,422                    1,696               2,029
     General and administrative                                                                  2,224                    2,241               1,213

           Total stock-based expenses                                                  $         4,451            $       4,767          $    4,359
See accompanying notes.

         F-4
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                                                                                               salesforce.com, inc.

                                           Consolidated Statements of Convertible Preferred Stock and Stockholders’ Deficit
                                                             (in thousands, except share and per share data)
                                                                                                                                Notes            Accumulated
                                                                                       Additional        Deferred             Receivables           Other                              Total                    Total
                                 Convertible                                            Paid-in         Stock-Based              from           Comprehensive      Accumulated      Comprehensive           Stockholders’
                               Preferred Stock            Common Stock                  Capital        Compensation          Stockholders           Loss              Deficit           Loss                   Deficit

                                                                        Amoun
                              Shares       Amount        Shares           t


Balances at January 31,
   2001                       57,275,943 $ 59,852        28,732,096     $   29     $        17,002     $      (7,682 )   $           (1,506 )   $          (49 )   $    (37,123 )   $       (37,172 )   $           (29,329 )
      Deferred
         compensation
         related to the
         issuance of
         Company and
         subsidiary stock
         options                       —         —                —         —                 (132 )             144                     —                  —                —                   —                       12
      Amortization of
         Company and
         subsidiary
         deferred
         stock-based
         compensation                  —         —                —         —                   —              2,608                     —                  —                —                   —                    2,608
      Exercise of stock
         options                       —         —         495,974          —                  254                —                      —                  —                —                   —                     254
      Accrued interest on
         stockholder notes
         receivable                    —         —                —         —                   —                 —                     (88 )               —                —                   —                      (88 )
      Repurchase of
         unvested shares               —         —       (2,008,348 )       (2 )              (225 )              —                      —                  —                —                   —                     (227 )
      Fair value of stock
         options issued to
         nonemployees for
         services                      —         —                —         —                  292                —                      —                  —                —                   —                     292
      Accelerated vesting
         of employee stock
         options                       —         —                —         —                1,298                —                      —                  —                —                   —                    1,298
      Issuance of Series D
         preferred stock
         and common
         stock, net of
         issuance costs of
         $15                    748,402      1,285        2,000,000          2               1,630                —                      —                  —                —                   —                    1,632
      Beneficial
         conversion
         feature on Series
         D preferred stock             —         (70 )            —         —                   70                —                      —                  —                —                   —                       70
      Deemed dividend
         relating to
         beneficial
         conversion
         feature on Series
         D preferred stock             —         70               —         —                  (70 )              —                      —                  —                —                   —                      (70 )
      Issuance of common
         stock to employee
         for services                  —         —          35,100          —                  130                —                      —                  —                —                   —                     130
      Sale of subsidiary
         common stock                  —         —                —         —                  838                —                      —                  —                —                   —                     838
      Translation
         adjustment                    —         —                —         —                   —                 —                      —                (159 )             —                 (159 )                  (159 )
      Net loss, as restated            —         —                —         —                   —                 —                      —                  —           (28,609 )           (28,609 )               (28,609 )

      Comprehensive loss,
        year ended
        January 31, 2002,
        as restated                    —         —                —         —                   —                 —                      —                  —                —              (28,768 )                    —


Balances at January 31,
   2002, as restated          58,024,345 $ 61,137        29,254,822     $   29     $        21,087     $      (4,930 )   $           (1,594 )   $         (208 )   $    (65,732 )   $       (65,940 )   $           (51,348 )


                                                                                                           F-5
Table of Contents

                                                                                            salesforce.com, inc.

                               Consolidated Statements of Convertible Preferred Stock and Stockholders’ Deficit—(Continued)
                                                        (in thousands, except share and per share data)
                                                                                                                             Notes            Accumulated
                                                                                    Additional        Deferred             Receivables           Other                               Total                    Total
                                  Convertible                                        Paid-in         Stock-Based              from           Comprehensive       Accumulated      Comprehensive           Stockholders’
                                Preferred Stock        Common Stock                  Capital        Compensation          Stockholders           Loss               Deficit           Loss                   Deficit

                                                                     Amoun
                               Shares       Amount    Shares           t


Balances at January 31,
   2002, as restated           58,024,345 $ 61,137    29,254,822     $   29     $        21,087     $      (4,930 )   $           (1,594 )   $         (208 )    $    (65,732 )   $       (65,940 )   $           (51,348 )
      Deferred
         compensation
         related to the
         issuance of
         Company and
         subsidiary stock
         options                        —         —            —         —                7,589            (7,793 )                   —                  —                 —                   —                     (204 )
      Amortization of
         Company and
         subsidiary deferred
         stock-based
         compensation                   —         —            —         —                   —              3,135                     —                  —                 —                   —                    3,135
      Exercise of stock
         options                        —         —     547,560           1                 416                —                      —                  —                 —                   —                      417
      Stock options early
         exercised subject
         to repurchase                  —         —    1,132,562         —                   —                 —                      —                  —                 —                   —                       —
      Repurchase of
         unvested shares                —         —     (646,982 )       (1 )              (341 )              —                      —                  —                 —                   —                     (342 )
      Fair value of stock
         options issued to
         nonemployees for
         services                       —         —            —         —                  310                —                      —                  —                 —                   —                      310
      Accelerated vesting of
         employee stock
         options                        —         —            —         —                  178                —                      —                  —                 —                   —                      178
      Cancellation of
         stockholder notes
         receivable for
         unvested common
         stock options                  —         —      (87,500 )       —                   —                 —                    109                  —                 —                   —                      109
      Accrued interest on
         stockholder notes
         receivable                     —         —            —         —                   —                 —                     (89 )               —                 —                   —                      (89 )
      Issuance of common
         stock and warrants
         to purchase
         common stock for
         services                       —         —     280,500          —                1,106                —                      —                  —                 —                   —                    1,106
      Sale of subsidiary
         common stock                   —         —            —         —                  355                —                      —                  —                 —                                          355
      Translation
         adjustment                     —         —            —         —                   —                 —                      —                 214                —                  214                     214
      Net loss, as restated             —         —            —         —                   —                 —                      —                  —             (9,716 )            (9,716 )                (9,716 )

      Comprehensive loss,
        year ended January
        31, 2003, as
        restated                        —         —            —         —                   —                 —                      —                  —                 —               (9,502 )                    —


Balances at January 31,
   2003, as restated           58,024,345    61,137   30,480,962         29              30,700            (9,588 )               (1,574 )                   6        (75,448 )           (75,442 )               (55,875 )
      Deferred
         compensation
         related to the
         issuance of
         Company and
         subsidiary stock
         options                        —         —            —         —                2,339            (2,428 )                   —                  —                 —                   —                      (89 )
      Amortization of
         Company and
         subsidiary deferred
         stock-based
         compensation                   —         —            —         —                   —              3,765                     —                  —                 —                   —                    3,765
      Exercise of stock
         options                        —         —    1,041,131          3               1,891                —                      —                  —                 —                   —                    1,894
      Repurchase of
         unvested shares                —         —      (23,967 )       —                  (17 )              —                      —                  —                 —                   —                      (17 )
      Fair value of stock
         awards issued to               —         —       32,500         —                  422                —                      —                  —                 —                   —                      422
         nonemployees for
         services
      Accelerated vesting of
         employee stock
         options                     —          —           —         —          146              —              —          —             —               —              146
      Accrued interest on
         stockholder notes
         receivable                  —          —           —         —           —               —           (100 )        —             —               —             (100 )
      Sale of subsidiary
         common stock                —          —           —         —           99              —              —          —             —                               99
      Translation
         adjustment                  —          —           —         —           —               —              —           4            —                4               4
      Net income                     —          —           —         —           —               —              —          —          3,514           3,514           3,514

      Comprehensive
        income, year
        ended January 31,
        2004                         —          —           —         —           —               —              —          —             —            3,518              —

Balances at January 31, 2004   58,024,345 $ 61,137   31,530,626   $   32   $   35,580   $     (8,251 )   $   (1,674 )   $   10   $   (71,934 )   $   (71,924 )   $   (46,237 )



                                                                               See accompanying notes.

                                                                                            F-6
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                                                               salesforce.com, inc.

                                                      Consolidated Statements of Cash Flows
                                                                  (in thousands)
                                                                                                            Fiscal Year Ended January 31,

                                                                                                 2002,                   2003,
                                                                                              As Restated             As Restated               2004


Operating activities :
Net (loss) income                                                                         $      (28,609 )           $     (9,716 )         $     3,514
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating
  activities:
     Minority interest in consolidated joint venture                                                 (425 )                  (292 )                 184
     Depreciation and amortization                                                                  2,403                   2,664                 2,591
     Loss on retirement of fixed assets                                                                —                      589                    68
     Amortization of deferred commissions                                                             241                   2,885                 8,599
     Lease abandonment (recovery)                                                                   7,657                      —                 (3,445 )
     Accrued interest on stockholder notes receivable                                                 (88 )                   (89 )                (100 )
     Expense related to stock-based awards                                                          4,451                   4,767                 4,359
     Changes in assets and liabilities:
           Accounts receivable                                                                     (3,991 )               (3,872 )              (16,955 )
           Deferred commissions                                                                      (870 )               (5,691 )              (16,320 )
           Prepaid expenses and other current assets                                                  317                   (579 )               (2,216 )
           Other assets                                                                                84                     16                   (723 )
           Accounts payable                                                                            70                   (199 )                1,429
           Accrued expenses and other current liabilities                                             246                  3,864                 10,339
           Income taxes                                                                                —                      —                     534
           Deferred revenue                                                                         5,348                 12,043                 30,506
           Lease abandonment and other liability                                                       —                  (1,177 )                 (583 )

Net cash (used in) provided by operating activities                                              (13,166 )                  5,213               21,781

Investing activities :
Restricted cash                                                                                        —                    (233 )                 (179 )
Purchases of marketable securities                                                                     —                 (27,977 )              (39,900 )
Sales and maturities of marketable securities                                                          —                  20,677                 21,851
Capital expenditures                                                                                 (713 )               (2,022 )               (2,916 )

Net cash used in investing activities                                                                (713 )                (9,555 )             (21,144 )

Financing activities :
Proceeds from the issuance of convertible Series A, B, C, and D preferred stock, net of
  issuance costs                                                                                    1,285                      —                     —
Proceeds from the issuance of common stock, net of issuance costs                                   1,632                      —                     —
Proceeds from exercise of stock options                                                               254                   1,580                 1,480
Principal payments on capital lease obligations                                                      (656 )                  (757 )                (531 )
Repurchase of unvested shares                                                                        (227 )                  (342 )                 (17 )
Proceeds from subsidiary stock offerings                                                            1,259                     551                   167

Net cash provided by financing activities                                                           3,547                   1,032                 1,099

Net (decrease) increase in cash and cash equivalents                                             (10,332 )                 (3,310 )               1,736
Effect of exchange rate changes on cash and cash equivalents                                        (159 )                    310                    18

Net (decrease) increase in cash and cash equivalents                                             (10,491 )                (3,000 )                1,754
Cash and cash equivalents at beginning of period                                                  22,200                  11,709                  8,709

Cash and cash equivalents at end of period                                                $       11,709             $      8,709           $   10,463
Supplemental cash flow disclosure :
Cash paid during the year for:
    Interest                                                                       $   272   $    77   $   22
    Income taxes                                                                        —         —         7
Noncash financing and investing activities :
Equipment acquired under capital lease                                                 642        —        —
Transfer of capital lease to operating lease                                            —        569       —
Beneficial conversion feature on Series D preferred stock                               70        —        —
Cancellation of stockholder notes receivable for unvested common stock options          —        109       —

                                                         See accompanying notes.

                                                                   F-7
Table of Contents

                                                              salesforce.com, inc.

                                                 Notes to Consolidated Financial Statements

                                            Fiscal Years Ended January 31, 2002, 2003 and 2004

1.   Summary of Business and Significant Accounting Policies

      Description of Business and Basis of Presentation

      Salesforce.com, inc. (the ―Company‖) was incorporated in Delaware in February 1999. Principal offices are located in San Francisco,
California. The Company is the leading provider, based on market share, of application services that allow organizations to easily share
customer information on demand. It provides a comprehensive customer relationship management (―CRM‖) service to businesses of all sizes
and industries worldwide. The Company began to offer its on-demand application service on a subscription basis in February 2000. The
Company conducts its business worldwide, with subsidiaries in Europe and Japan.

      Unaudited Pro Forma Stockholders’ Equity

      If the offering contemplated by this prospectus is consummated, all of the convertible preferred stock outstanding will automatically
convert into 58,024,345 shares of common stock based on the shares of convertible preferred stock outstanding at January 31, 2004. Unaudited
pro forma stockholders’ equity as adjusted for the assumed conversion of the convertible preferred stock, is set forth on the consolidated
balance sheet.

      Use of Estimates

    The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires
management to make estimates and assumptions in the Company’s consolidated financial statements and notes thereto.

     Significant estimates and assumptions made by management include the determination of the fair value of stock awards issued and the
adequacy of the lease abandonment accrual. Actual results could differ from those estimates.

      Principles of Consolidation

     The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, SFDC International Ltd.
and SFDC EMEA Ltd. All significant intercompany balances and transactions have been eliminated in consolidation.

      Additionally, the Company holds a majority interest in Kabushiki Kaisha salesforce.com (―Salesforce Japan‖), a Japanese joint venture
(see Note 2). The Company records gains and losses resulting from the change of interest in Salesforce Japan directly to stockholders’ deficit as
additional paid-in capital.

      Segments

      The Company operates in one segment.

      Foreign Currency Translation

      The functional currency of the Company’s foreign subsidiaries is the local currency. Adjustments resulting from translating foreign
functional currency financial statements into U.S. dollars are recorded as a separate component of stockholders’ deficit. Foreign currency
transaction gains and losses are included in net (loss) income for the period and have not been material during the years ended January 31,
2002, 2003, and 2004. All

                                                                      F-8
Table of Contents

                                                              salesforce.com, inc.

                                         Notes to Consolidated Financial Statements—(Continued)

assets and liabilities denominated in a foreign currency are translated into U.S. dollars at the exchange rate on the balance sheet date. Revenues
and expenses are translated at the average exchange rate during the period. Equity transactions are translated using historical exchange rates.

      Concentrations of Credit Risk and Significant Customers and Suppliers

       The Company’s financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents,
short-term marketable securities, restricted cash, and trade accounts receivable. Although the Company deposits its cash with multiple financial
institutions, its deposits, at times, may exceed federally insured limits. Collateral is not required for accounts receivable. Additionally,
customers’ financial condition and creditworthiness are regularly evaluated.

     The Company’s accounts receivable and net revenues are derived from a large number of direct customers. Other than a single customer
who accounted for 7 percent of the accounts receivable balance at January 31, 2004, no customer accounted for more than 5 percent of
accounts receivable at January 31, 2003 and 2004. No single customer accounted for 5 percent or more of total revenue during the years ended
January 31, 2002, 2003, and 2004.

      As of January 31, 2003 and 2004, assets located outside the Americas were 9 percent and 12 percent of total assets, respectively.
Revenues for the years ended January 31, 2002, 2003 and 2004, outside the Americas were 9 percent, 14 percent and 18 percent, respectively,
of total revenues. Revenues by geographical region are as follows (in thousands):
                                                                                                        Fiscal Year Ended January 31,

                                                                                                 2002                2003               2004

            Americas                                                                          $ 20,305           $ 43,855          $ 78,958
            Europe                                                                               1,680              5,345            11,754
            Asia Pacific                                                                           424              1,791             5,311

                                                                                              $ 22,409           $ 50,991          $ 96,023


     The loss from operations outside the Americas totaled $3,273,000, $3,791,000 and $1,098,000 for the years ended January 31, 2002,
2003, and 2004, respectively.

     The Company serves all of its customers and users from a single third-party Web hosting facility located in Sunnyvale, California. The
Company does not control the operation of this facility, and it is vulnerable to damage or interruption. The Company maintains redundant
systems in its San Francisco headquarters that can be used to provide service in the event the third-party Web hosting facility becomes
unavailable, although in such circumstances, the Company’s service may be interrupted during the transition.

      Cash and Cash Equivalents

      The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.
Cash and cash equivalents, which consist of cash on deposit with banks and money market funds, are stated at cost, which approximates fair
value.

      Restricted Cash

      The Company’s restricted cash balance of $3,733,000 and $3,912,000 at January 31, 2003 and 2004, respectively, consisted primarily of
a certificate of deposit in the amount of $3,500,000, plus interest, that served

                                                                       F-9
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                                                                salesforce.com, inc.

                                           Notes to Consolidated Financial Statements—(Continued)

as collateral to a letter of credit that was issued to the Company’s principal landlord as a security deposit. The letter of credit is further
discussed in Note 7. The certificate of deposit bears annual interest at 1 percent and the letter of credit renews annually through December 31,
2010. The remaining restricted cash balance at January 31, 2003 and 2004, of $233,000 and $412,000, respectively, consisted of collateral for
the Company’s credit card processor and sublease of office space.

      Marketable Securities

      The Company’s investments in marketable securities consist of short-term municipal bonds. Management determines appropriate
classification of investments in marketable securities at the time of purchase in accordance with Statement of Financial Accounting Standards
(―SFAS‖) No. 115, Accounting for Certain Investments in Debt and Equity Securities and reevaluates such determination at each balance sheet
date. Securities available for sale are carried at fair value, with the unrealized gains and losses, net of tax, reported as a separate component of
stockholders’ equity. Fair value is determined based on quoted market rates. Realized gains and losses and declines in value judged to be
other-than-temporary on securities available for sale are included as a component of interest income. The cost of securities sold is based on the
specific-identification method. Interest on securities classified as available for sale is included as a component of interest income.

      Fair Value of Financial Instruments

       The carrying amounts of the Company’s financial instruments, which include cash and cash equivalents, short term marketable securities,
restricted cash, accounts receivable, accounts payable, and other accrued expenses, approximate their fair values due to their short maturities.
Based on borrowing rates currently available to the Company for loans with similar terms, the carrying value of capital lease obligations
approximates fair value.

      Fixed Assets

      Fixed assets are stated at cost. Depreciation is calculated on a straight-line basis over the estimated useful lives of those assets as follows:

            Computers, equipment, and software                                 3 to 5 years
            Furniture and fixtures                                             5 to 7 years
            Leasehold improvements                                             Shorter of the estimated useful life of 5 years or the lease
                                                                               term

     When assets are retired, the cost and accumulated depreciation and amortization are removed from their respective accounts and any loss
on such retirement is reflected in operating expenses. When assets are otherwise disposed of, the cost and related accumulated depreciation and
amortization are removed from their respective accounts and any gain or loss on such sale or disposal is reflected in other income (expense).

     During fiscal 2003 and 2004, the Company retired certain fixed assets, which had a total net book value of $589,000 and $68,000,
respectively. These amounts were expensed and are reflected in operating expenses in the accompanying Consolidated Statements of
Operations.

      Impairment of Long-Lived Assets

      The Company evaluates the recoverability of its long-lived assets in accordance with SFAS No. 144, Accounting for the Impairment or
Disposal of Long-Lived Assets (―SFAS 144‖). Long-lived assets are reviewed for possible impairment whenever events or circumstances
indicate that the carrying amount of such assets may

                                                                        F-10
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                                                              salesforce.com, inc.

                                         Notes to Consolidated Financial Statements—(Continued)

not be recoverable. If such review indicates that the carrying amount of long-lived assets is not recoverable, the carrying amount of such assets
is reduced to fair value.

     In addition to the recoverability assessment, the Company routinely reviews the remaining estimated lives of its long-lived assets. Any
reduction in the useful life assumption will result in increased depreciation and amortization expense in the period when such determinations
are made, as well as in subsequent periods.

      Software and Website Development Costs

      The Company follows the guidance of Emerging Issues Task Force (―EITF‖) Issue No. 00-2, Accounting for Web Site Development Costs
(―EITF 00-2‖), and EITF Issue No. 00-3, Application of AICPA Statement of Position 97-2 to Arrangements That Include the Right to Use
Software Stored on Another Entity’s Hardware (―EITF 00-3‖). EITF 00-2 sets forth the accounting for website development costs based on the
website development activity. EITF 00-3 sets forth the accounting for software in a hosting arrangement. As such, the Company follows the
guidance set forth in Statement of Position 98-1, Accounting for the Cost of Computer Software Developed or Obtained for Internal Use (―SOP
98-1‖), in accounting for the development of its on-demand application service. SOP 98-1 requires companies to capitalize qualifying computer
software costs, which are incurred during the application development stage and amortize them over the software’s estimated useful life of
three years. The Company capitalized $204,000, $364,000 and $453,000 during the years ended January 31, 2002, 2003, and 2004,
respectively. Amortization expense totaled $69,000, $186,000 and $277,000 during the years ended January 31, 2002, 2003 and 2004,
respectively.

      Comprehensive Income (Loss)

      Comprehensive income (loss) consists of other comprehensive income and net loss. Other comprehensive income includes certain
changes in equity that are excluded from net income (loss). Specifically, cumulative foreign currency translation adjustments are included in
accumulated other comprehensive income. Comprehensive income (loss) has been reflected in the consolidated statements of convertible
preferred stock and stockholders’ deficit.

     Accumulated other comprehensive income (loss) totaled $(159,000), $214,000 and $4,000 for the years ended January 31, 2002, 2003
and 2004, respectively, resulting from foreign currency translations.

      Accounting for Stock-Based Compensation

      The Company accounts for compensation expense for its stock-based employee compensation plan using the intrinsic value method
prescribed in Accounting Principles Board Opinion (―APB‖) No. 25, Accounting for Stock Issued to Employees (―APB 25‖), and complies with
the disclosure provisions of SFAS No. 123, Accounting for Stock-Based Compensation (―SFAS 123‖), and SFAS No. 148, Accounting for
Stock-Based Compensation—Transition and Disclosure (―SFAS 148‖). Under APB 25, compensation expense of fixed stock options is based
on the difference, if any, on the date of the grant between the deemed fair value of the Company’s stock and the exercise price of the option.
Compensation expense is recognized on a straight-line basis over the option-vesting period of four years. The Company accounts for stock
issued to nonemployees in accordance with the provisions of SFAS 123 and EITF Issue No. 96-18, Accounting for Equity Instruments That Are
Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services (―EITF 96-18‖).

                                                                      F-11
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                                                              salesforce.com, inc.

                                           Notes to Consolidated Financial Statements—(Continued)

      Pro forma information regarding the results of operations is determined as if the Company had accounted for its employee stock options
using the fair-value method. The fair value of each option grant is estimated on the date of grant using the Black-Scholes method with the
following assumptions:
                                                                                                                   Fiscal Year Ended January 31,

                                                                                                           2002                 2003                   2004


Volatility                                                                                                   100%                 100%                  100%
Weighted-average estimated life                                                                            4 years              4 years               4 years
Weighted-average risk-free interest rate                                                                    3.81%                1.67%                 2.92%
Dividend yield                                                                                                  —                    —                     —

      Had compensation cost for the Company’s stock-based compensation plans been determined using the fair-value method at the grant date
for awards under those plans calculated using the Black-Scholes pricing model, the Company’s net loss would have been increased to the pro
forma amounts indicated below (in thousands, except per share data):
                                                                                                             Fiscal Year Ended January 31,

                                                                                                    2002                     2003                    2004


Net (loss) income, as reported                                                                  $   (28,609 )            $     (9,716 )       $       3,514
  Add: Total stock-based employee compensation expense included in the determination
     of net (loss) income                                                                             2,608                     3,135                 3,765
  Deduct: Total stock-based employee compensation expense determined under
     fair-value-based method for all awards                                                          (4,025 )                  (4,805 )              (7,884 )

Net loss, pro forma                                                                             $   (30,026 )            $   (11,386 )        $        (605 )

Net loss, per share:
     Basic:
           As reported                                                                          $     (1.36 )            $      (0.37 )       $         0.12
           Pro forma                                                                                  (1.43 )                   (0.43 )                (0.02 )
     Diluted:
           As reported                                                                          $     (1.36 )            $      (0.37 )       $         0.04
           Pro forma                                                                                  (1.43 )                   (0.43 )                (0.02 )

      For the pro forma calculation, the per share weighted-average fair value of options granted are as follows:
                                                                                                                     Fiscal Year Ended January 31,

                                                                                                            2002                    2003                2004

Weighted-average fair value:
    Options granted below fair value                                                                   $ 1.21                   $ 1.65                $ 2.69
    Options granted above fair value                                                                     1.31                       —                     —
    Options equal to fair value                                                                            —                        —                   3.65
Weighted-average exercise price:
    Options granted at or below fair value                                                             $ 0.51                   $ 1.10                $ 3.74
    Options granted above fair value                                                                     2.00                       —                     —


                                                                      F-12
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                                                               salesforce.com, inc.

                                          Notes to Consolidated Financial Statements—(Continued)

      Net (Loss) Income Per Share

      Basic net (loss) income per share is computed by dividing net (loss) income by weighted-average number of common shares outstanding
for the fiscal period. Diluted net (loss) income per share is computed giving effect to all potential dilutive common stock, including options,
warrants and convertible preferred stock.

      A reconciliation of the numerator and denominator used in the calculation of basic and diluted net (loss) income per share is as follows
(in thousands):
                                                                                                                     Fiscal Year Ended
                                                                                                                        January 31,

                                                                                                     2002                    2003                      2004



Numerator:
   Net (loss) income                                                                             $   (28,609 )            $ (9,716 )               $    3,514
Denominator:
    Weighted-average shares outstanding for basic (loss) earnings per share, net of
      weighted-average shares of common stock subject to repurchase                                   21,039                 26,375                    29,605
    Effect of dilutive securities:
         Employee stock options and warrants                                                                 —                      —                   7,780
         Convertible preferred stock                                                                         —                      —                  58,024

     Adjusted weighted-average shares outstanding and assumed conversions for
       diluted earnings per share                                                                     21,039                 26,375                    95,409


      Outstanding unvested common stock purchased by employees is subject to repurchase by the Company and therefore is not included in
the calculation of the weighted-average shares outstanding for basic (loss) earnings per share.

      The following were excluded from the computation of diluted earnings per share as they had an anti-dilutive impact (in thousands):
                                                                                                            Fiscal Year Ended January 31,

                                                                                                       2002                2003             2004


            Convertible preferred stock                                                                58,024             58,024             —
            Options                                                                                     4,075             10,526            901
            Warrants                                                                                    1,214              1,299             —

      Income Taxes

      The Company uses the liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are
determined based on temporary differences between the financial statement and tax basis of assets and liabilities and net operating loss and
credit carryforwards using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect on deferred tax
assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are
established when necessary to reduce deferred tax assets to the amounts expected to be realized.

                                                                       F-13
Table of Contents

                                                               salesforce.com, inc.

                                          Notes to Consolidated Financial Statements—(Continued)

      Revenue Recognition

      The Company derives its revenues from two sources: (1) subscription revenues, which are comprised of subscription fees from customers
accessing its on-demand 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 revenues, consisting primarily of training fees. Because the Company
provides its application as a service, the Company follows the provisions of Securities and Exchange Commission Staff Accounting Bulletin
No. 101, Revenue Recognition in Financial Statements , as amended by Staff Accounting Bulletin No. 104, Revenue Recognition . On August
1, 2003, the Company adopted Emerging Issues Task Force Issue No. 00-21, Revenue Arrangements with Multiple Deliverables . The
Company recognizes revenue when all of the following conditions are met:

            There is persuasive evidence of an arrangement;

            The service has been provided to the customer;

            The collection of the fees is probable; and

            The amount of fees to be paid by the customer is fixed or determinable.

     Subscription and support revenues are recognized on a monthly basis over the lives of the contracts. Amounts that have been invoiced are
recorded in accounts receivable and in deferred revenue or revenue, depending on whether the revenue recognition criteria have been met.

      Professional services and other revenues, when sold with subscription and support offerings, are accounted for separately since these
services have value to the customer on a stand-alone basis and there is objective and reliable evidence of fair value of the undelivered elements.
The Company’s arrangements do not contain general rights of return. Additionally, when professional services are sold with other elements, the
consideration from the revenue arrangement is allocated among the separate elements based upon the relative fair value. Professional services
and other revenues are recorded as follows: Consulting revenues are recognized upon completion of the contracts that are of short duration
(generally less than 60 days) and as the services are rendered for contracts of longer duration. Training revenues, resulting from system
administrator, user, and partner workshops, are recognized after the services are performed.

     On occasion, the Company has purchased from its suppliers goods or services for the Company’s use in its operations at or around the
same time these same businesses entered into subscription and/or consulting agreements. The Company generally defines ―at or around the
same time‖ as within six months. Revenues recognized from customers who were also suppliers were not significant during the years ended
January 31, 2002, 2003 and 2004. Both the procurement and revenue agreements are separately negotiated, settled ultimately in cash, and
recorded at what the Company considers to be fair value. When any of these factors is not present, the Company does not recognize the revenue
from the underlying sale agreements; rather, the revenue is netted with expenses.

      Deferred Revenue

      Deferred revenue consists of billings or payments received in advance of revenue recognition from the Company’s subscription service
described above and is recognized as revenue recognition criteria are met.

      Deferred Commissions

      Deferred commissions are the incremental costs that are directly associated with noncancelable subscription contracts with customers and
consist of sales commissions paid to the Company’s direct sales force. The

                                                                      F-14
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                                                               salesforce.com, inc.

                                          Notes to Consolidated Financial Statements—(Continued)

commissions are deferred and amortized over the noncancelable terms of the related customer contracts, which are typically 12 to 24 months.
The commission payments are paid in full the month after the customer’s service commences. The deferred commission amounts are
recoverable through the future revenue streams under the noncancelable customer contracts. The Company believes this is the preferable
method of accounting as the commission charges are so closely related to the revenue from the noncancelable customer contracts that they
should be recorded as an asset and charged to expense over the same period that the subscription revenue is recognized. Amortization of
deferred commissions is included in marketing and sales expense in the accompanying consolidated statements of operations.

      Deferred Commissions—Restatement for Consistent Presentation for All Fiscal Years Presented

       In its previously issued financial statements, the Company expensed its sales commissions for customer contracts entered into during
fiscal 2002 when the liabilities were incurred, regardless of whether the customer contracts were noncancelable or not. At the start of fiscal
2003, the Company changed its accounting policy to defer and amortize the sales commissions over the noncancelable terms of the related
customer contracts. The Company erroneously characterized the change in policy as a change in accounting estimate and applied its deferral
and amortization policy only to noncancelable subscription arrangements that were entered into after February 1, 2002.

      Upon review, the Company concluded that the change to the deferral and amortization method was a change in accounting principle and
not a change in accounting estimate. Accordingly, to correct this error, the Company restated its fiscal 2002 results to defer commissions
associated with noncancelable subscription arrangements.

      The Company believes that deferring and amortizing the commissions is a change to a preferable method of accounting as the
commission charges are so closely related to the revenue from the noncancelable contracts that they should be recorded as an asset and charged
to expense over the same period that the related subscription revenue is recognized.

      The Company has restated its fiscal 2002 and 2003 results as though the deferral and amortization method of accounting had been
retroactively applied as of May 1, 2001, which is when the Company began to enter into noncancelable subscription arrangements with its
customers. This resulted in a reduction of the previously reported fiscal 2002 net loss of $629,000, or $0.03 per diluted share. The impact on
previously reported fiscal 2003 was an increase in the net loss of $377,000, or $0.01 per diluted share, resulting from the amortization of
commissions deferred on fiscal 2002 subscription contracts of $629,000, offset by additional commissions deferred on fiscal 2003 subscription
contracts of $252,000. The impact of this restatement is reflected in the reported results herein.

     As such, the accompanying consolidated financial statements for fiscal 2002, 2003 and 2004 are presented using the same basis of
accounting for sales commissions.

      Warranties and Indemnification

      The Company’s on-demand application service is typically warranted to perform in a manner consistent with general industry standards
that are reasonably applicable and substantially in accordance with the Company’s online help documentation under normal use and
circumstances.

      The Company’s arrangements generally include certain provisions for indemnifying customers against liabilities if its products or
services infringe a third-party’s intellectual property rights. To date, the Company has not incurred any material costs as a result of such
indemnifications and has not accrued any liabilities related to such obligations in the accompanying consolidated financial statements.

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                                                              salesforce.com, inc.

                                         Notes to Consolidated Financial Statements—(Continued)

      The Company has entered into service level agreements with a small number of its customers warranting certain levels of uptime
reliability and permitting those customers to receive credits or terminate their agreements in the event that the Company fails to meet those
levels. To date, the Company has not provided credits, or cancelled any subscription agreements related to these service level agreements.

      The Company has also agreed to indemnify its directors and executive officers for costs associated with any fees, expenses, judgments,
fines and settlement amounts incurred by any of these persons in any action or proceeding to which any of those persons is, or is threatened to
be, made a party by reason of the person’s service as a director or officer, including any action by the Company, arising out of that person’s
services as the Company’s director or officer or that person’s services provided to any other company or enterprise at the Company’s request.

      Advertising Expenses

     Advertising is expensed as incurred. Advertising expense was $6,402,000, $3,997,000 and $5,048,000 for the years ended January 31,
2002, 2003 and 2004, respectively.

      Reclassifications

      Certain reclassifications have been made to conform with the current fiscal period presentation.

2.   Joint Venture

      On December 7, 2000, the Company entered into a joint venture agreement with SunBridge, Inc., a Japanese corporation, to establish
Salesforce Japan. In accordance with the agreement, the Company contributed $1,339,000 for 300,000 shares of common stock, which resulted
in a 75 percent interest in the joint venture. 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.

      On September 15, 2001, the joint venture sold 4,000 shares of common stock to an executive of the joint venture at a per share price that
was below fair value. As a result, the joint venture recorded compensation expense relating to the difference between the price paid per share
and the fair value per share, which equaled $76,000. As a result of this transaction, the Company’s ownership percentage decreased from 75
percent to 74.3 percent.

      On December 4, 2001, the joint venture sold an additional 44,400 shares of common stock to new investors at a per share price of $28.21
for total proceeds of $1,252,369. As a result, the Company’s ownership percentage declined from 74.3 percent to 66.9 percent. The Company’s
change in interest in the joint venture resulted in a gain of $838,000, which has been recorded directly to additional paid-in capital. This gain
was calculated based on the Company’s proportionate share of the proceeds from the sale.

      On September 29, 2002 and October 28, 2002, the joint venture sold an additional 9,000 and 8,000 shares of common stock, respectively,
to new investors at a per share price of $32.41 for total proceeds of $551,000. As a result, the Company’s ownership percentage declined from
66.9 percent to 64.5 percent. The Company’s change in interest in the joint venture resulted in a gain of $355,000, which has been recorded
directly to additional paid-in capital. This gain was calculated based on the Company’s proportionate share of the proceeds from the sale.

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                                                                salesforce.com, inc.

                                          Notes to Consolidated Financial Statements—(Continued)

      On September 11, 2003, the joint venture sold an additional 4,750 shares of common stock to new investors at a per share price of $35.16
for total proceeds of $167,000. As a result, the Company’s ownership percentage declined from 64.5 percent to 63.8 percent. The Company’s
change in interest in the joint venture resulted in a gain of $99,000, which has been recorded directly to additional paid-in capital. This gain
was calculated based on the Company’s proportionate share of the proceeds from the sale.

      The Board of Directors of the joint venture has authorized options to purchase 40,000 shares to be issued to employees under its Stock
Option Plan in accordance with the rules and regulations of the Commercial Code of Japan. The Japanese Stock Option Plan 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. These provisions result in variable
accounting for the plan, as the number of options awarded is not fixed and no measurement date currently exists. In fiscal 2002, 2003 and 2004,
the joint venture granted options to purchase 34,100, 2,600 and 3,000 shares, respectively, to its employees to purchase shares of common
stock in the joint venture. The stock options were issued with an exercise price of ¥500 per share (approximately $4.00 per share), ¥3,500 per
share (approximately $30.00 per share) and ¥3,500 per share (approximately $31.00 per share) and vest over a two-year period. As a result of
these stock option grants, the joint venture recorded $778,000, $162,000 and $13,000 of deferred stock-based compensation during the years
ended January 31, 2002, 2003 and 2004, respectively. The joint venture amortized $190,000, $544,000 and $274,000 of deferred stock-based
compensation expense during the years ended January 31, 2002, 2003 and 2004, respectively. The joint venture reversed zero, $34,000 and
zero of deferred stock-based compensation related to terminated employees during the years ended January 31, 2002, 2003 and 2004,
respectively.

     Given the Company’s majority ownership interest in the joint venture, the accounts of the joint venture have been consolidated with the
accounts of the Company, and a minority interest has been recorded for the third party’s interest in the net assets and operations of the joint
venture to the extent of the minority partners’ individual investments. All intercompany transactions have been eliminated, with the exception
of minority interest.

       Under the terms of the joint venture agreement, the joint venture will terminate if the joint venture becomes a public company or is sold
to a third party, or upon the mutual agreement of the parties. In addition, if the Company commits a breach of, or if the Company fails to
perform, its material obligations under the joint venture agreement, 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 perform, its material obligations under the joint venture
agreement, which it does not cure in a timely manner, or if SunBridge enters into bankruptcy proceedings, the Company can require SunBridge
to sell to it all of their shares in the joint venture. The purchase price for SunBridge’s shares would be the then fair market value less a specified
discount. Additionally, if the Company and SunBridge are unable to agree on certain operational matters, either party can require the other to
purchase all of its shares of the joint venture at a price equal to the then fair value market value. Fair market value is to be determined by
mutual agreement of the parties, or if the parties are unable to agree, by an independent appraiser.

3.   Balance Sheet Accounts

      Marketable Securities

      At January 31, 2003 and 2004, the Company had $7,300,000 and $25,349,000 of short-term marketable securities, respectively,
consisting entirely of municipal bonds. These securities have been classified as available for sale in accordance with SFAS No. 115. The cost
of these securities approximates the fair value.

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                                                                salesforce.com, inc.

                                          Notes to Consolidated Financial Statements—(Continued)

      Fixed Assets

      Fixed assets consisted of the following (in thousands):
                                                                                                                  January 31,

                                                                                                          2003                        2004

            Computers, equipment, and software                                                        $    7,010              $           8,693
            Furniture and fixtures                                                                         1,353                          1,784
            Leasehold improvements                                                                         1,113                          1,610
            Construction-in-progress                                                                         363                             —

                                                                                                           9,839                      12,087
            Less accumulated depreciation and amortization                                                (4,851 )                    (7,018 )

                                                                                                      $    4,988              $           5,069


     Depreciation and amortization expense totaled $2,334,000, $2,478,000 and $2,314,000 for the years ended January 31, 2002, 2003 and
2004, respectively.

     Fixed assets at January 31, 2003 and 2004, included $1,788,000 in each year, acquired under capital lease agreements. Accumulated
amortization relating to equipment under capital leases totaled $1,214,000 and $1,717,000, respectively, at January 31, 2003 and 2004.
Amortization of assets under capital leases is included in depreciation and amortization expense.

      Other Assets

      Other assets consisted of the following (in thousands):
                                                                                                                         January 31,

                                                                                                                 2003                     2004

            Capitalized internal-use software development costs, net of accumulated amortization of
              $284 and $561, respectively                                                                        $ 396                $      572
            Long-term deposits                                                                                     199                       922

                                                                                                                 $ 595                $ 1,494


      Accrued Expenses and Other Current Liabilities

      Accrued expenses and other current liabilities consisted of the following (in thousands):
                                                                                                                        January 31,

                                                                                                                 2003                     2004

            Accrued compensation                                                                            $ 2,072               $        8,980
            Accrued other liabilities                                                                         2,037                        3,812
            Current portion of lease abandonment liability                                                    1,207                          477
            Liability for early exercise of unvested employee stock options                                   1,163                          749
            Accrued taxes payable                                                                               848                        2,304
            Accrued professional costs                                                                          652                          695
            Accrued rent                                                                                        508                          665

                                                                                                            $ 8,487               $ 17,682


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                                                              salesforce.com, inc.

                                            Notes to Consolidated Financial Statements—(Continued)

4.   Income Taxes

     The domestic and foreign components of (loss) income before minority interest and provisions for income taxes were as follows (in
thousands):
                                                                                                     Fiscal Year Ended January 31,

                                                                                             2002                     2003               2004

            Domestic                                                                 $       (24,472 )        $        (4,247 )      $    9,550
            Foreign                                                                           (4,562 )                 (5,761 )          (5,311 )

                                                                                     $       (29,034 )        $       (10,008 )      $    4,239


      The provisions for income taxes were as follows (in thousands):
                                                                                                              Fiscal Year Ended January 31,

                                                                                                          2002               2003               2004

            Current:
                Federal
                                                                                                          $—                 $—             $ 186
                    State                                                                                  —                  —               263
                    Foreign                                                                                —                  —                92

                                                                                                          $—                 $—             $ 541


     A reconciliation of income taxes at the statutory federal income tax rate to net income taxes included in the accompanying statements of
operations is as follows (in thousands):
                                                                                                     Fiscal Year Ended January 31,

                                                                                              2002                    2003               2004

            U.S. federal taxes (benefit) at statutory rate                               $    (10,162 )           $ (3,503 )         $    1,484
            State                                                                                  —                    —                   263
            Deferred compensation                                                                 965                  697                  802
            Foreign losses providing no benefit                                                 1,597                2,016                1,859
            Unutilized net operating losses                                                     7,588                  563               (4,068 )
            Foreign tax expense                                                                    —                    —                    92
            Other                                                                                  12                  227                  109

                                                                                         $           —            $          —       $        541


                                                                     F-19
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                                                              salesforce.com, inc.

                                         Notes to Consolidated Financial Statements—(Continued)

      Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets were
as follows (in thousands):
                                                                                                                        January 31,

                                                                                                                 2003                    2004

            Deferred tax assets:
                Net operating loss carryforwards                                                           $      18,106           $      14,729
                Lease abandonment                                                                                  2,444                   1,040
                Deferred compensation                                                                              1,242                   1,973
                Tax credits                                                                                          824                   1,017
                Capitalized start-up costs                                                                           450                      —
                Other                                                                                              1,592                     920

            Total deferred tax assets                                                                             24,658                  19,679
            Less valuation allowance                                                                             (24,658 )               (19,679 )

            Net deferred tax assets                                                                        $            —          $            —


      Realization of deferred tax assets is dependent on future earnings, if any, the timing and amount of which are uncertain. Accordingly, the
net deferred tax assets have been fully offset by a valuation allowance. The valuation allowance increased by $1,464,000 for the year ended
January 31, 2003, and decreased by $4,979,000 for the year ended January 31, 2004.

      At January 31, 2004, the Company had net operating loss carryforwards for federal income tax purposes of approximately $34,676,000,
which expire in 2020 through 2023 and federal research and development tax credits of approximately $734,000, which expire in 2020 through
2023. The Company also has state net operating loss carryforwards of approximately $45,078,000 which expire beginning in 2007 and state
research and development tax credits of approximately $435,000 which have no expiration date.

      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 an annual limitation could result in the expiration
of the net operating loss carryforwards before utilization.

5.   Convertible Preferred Stock

      At January 31, 2003 and 2004, convertible preferred stock consisted of the following:
                                                                                                                                      Aggregate
                                                                                                                                      Liquidation
                                                                                                  Shares                              Preference

                                                                                                           Issued and
                                                                                     Authorized            Outstanding

            Series A                                                                 25,850,000                25,850,000      $          517,000
            Series B                                                                 12,588,345                12,588,345               3,776,503
            Series C                                                                  7,650,498                 7,526,640              13,171,620
            Series D                                                                 12,650,000                12,059,360              46,910,910
            Series E                                                                  5,000,000                        —                       —

                                                                                     63,738,843                58,024,345      $       64,376,033


                                                                      F-20
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                                                               salesforce.com, inc.

                                          Notes to Consolidated Financial Statements—(Continued)

      The rights, preferences, and privileges of the convertible preferred stock are as follows:

      Dividends

      The holders of Series A, Series B, Series C, and Series D preferred stock are entitled to receive noncumulative dividends out of any assets
legally available prior and in preference to any declaration or payment of any dividend on the common stock at the rate of $0.0012, $0.018,
$0.093, and $0.233 per share per annum, respectively, when and if declared by the Board of Directors. After payment of the dividend
preference, outstanding shares of preferred stock shall participate with shares of common stock as to any additional declaration or payment of
any dividend. As of January 31, 2004, no dividends had been declared or paid.

      Conversion

      Each share of preferred stock is convertible, at the option of its holder, into the number of fully paid and nonassessable shares of common
stock which results from dividing the applicable original issue price per share by the applicable conversion price per share at the time of
conversion. The original issue prices per share of Series A, Series B, Series C and Series D preferred stock, respectively, are $0.02, $0.30,
$1.75, and $3.89. As of January 31, 2004, the conversion prices per share of Series A, Series B, Series C and Series D preferred stock,
respectively, were $0.02, $0.30, $1.75, and $3.89, and the rate at which each share converted into common stock is one for one.

      Each share of Series A, Series B and Series C preferred stock will automatically convert into common stock, at the conversion rate then in
effect, immediately on the earlier of (1) the date specified by vote or written consent of the holders of a majority of the then outstanding shares
of Series A, Series B, and Series C preferred stock, or (2) the closing of the sale of the Company’s common stock in a firm commitment
underwritten public offering with aggregate gross proceeds of at least $20,000,000 at a price per share of at least $3.00.

      Each share of Series D preferred stock will automatically convert into common stock, at the conversion rate then in effect, immediately
on the earlier of (1) the date specified by vote or written consent of the holders of a majority of the then outstanding shares of Series D
preferred stock, or (2) the closing of the sale of the Company’s common stock in a firm commitment underwritten public offering with
aggregate gross proceeds of at least $20,000,000 at a price per share of at least $5.00, and provided that the aggregate value of all shares of the
Company’s common stock outstanding before the offering, together with all shares of common stock issuable upon the conversion or exercise
of other securities of the Company outstanding or reserved for issuance under our stock option plans before the offering, valued at the price per
share established in the offering, is at least $535,500,000.

      Liquidation Preferences

      In the event of any liquidation, dissolution, or winding up of the Company either voluntary or involuntary, the holders of Series A, Series
B, Series C, and Series D preferred stock will be entitled to receive, prior and in preference to any distribution of any assets of the Company to
the holders of common stock, an amount per share equal to the sum of the original purchase price of $0.02, $0.30, $1.75 and $3.89 per share,
respectively, plus any declared but unpaid dividends. If, upon the occurrence of such event, the assets and funds available for distribution
among the holders of preferred stock are insufficient to permit the payment of these preferential amounts in full, the entire assets and funds
legally available for distribution will be distributed ratably among the holders of the preferred stock in proportion of the aggregate liquidation
preference for the shares of such stock owned by each holder.

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                                                               salesforce.com, inc.

                                          Notes to Consolidated Financial Statements—(Continued)

       After completion of distribution to the preferred stockholders, the remaining assets of the Company will be distributed to the holders of
preferred stock and common stock together in proportion to the number of shares of common stock held by each, assuming conversion into
common stock of all shares of preferred stock, provided that the holders of Series A, Series B, Series C and Series D preferred stock will not be
entitled to receive any further distribution after each has received total distributions of $0.06, $0.90, $5.25, and $11.67 per share, respectively.

      A merger or consolidation of the Company into another entity in which the stockholders of the Company own less than 50 percent of the
voting stock of the surviving company or the sale, transfer, or lease of substantially all assets of the Company will be deemed a liquidation,
dissolution, or winding up of the Company. These liquidation characteristics require classification of the convertible preferred stock outside of
the equity section of the accompanying balance sheet.

      Voting Rights

      Each share of Series A, Series B, Series C, and Series D preferred stock is entitled to one vote for each share of common stock into which
such share of preferred stock is convertible on the record date for any vote, or effective date of any written consent, as applicable.

      Antidilution Provisions

      Each share of Series A, Series B, Series C and Series D preferred stock has standard anti-dilution protection. In addition, in the event that
more than 10,282,776 shares of Series D preferred stock are sold by the Company, the Company is obligated to issue to certain investors
warrants to purchase additional shares of Series D preferred stock. Each warrant will be exercisable at any time until the fifth anniversary of the
date of issuance at a per share exercise price of $3.89 (see discussion below under Warrants).

      Warrants

      In fiscal year 2001, the Company issued two warrants to purchase 40,000 and 35,000 shares, respectively, of Series C preferred stock at
an exercise price of $1.75 per share to the landlord of the Company’s corporate headquarters. The warrants were fully vested at the date of
grant with no performance obligations by the landlord and expire in April 2007. The warrants were valued using the Black-Scholes pricing
model. Assumptions used were as follows: fair value of the underlying stock of $1.75; risk-free interest rate of 6.27 percent; contractual life of
seven years; no dividends during the term; and volatility of 100 percent. The fair value of the warrants totaled $112,000 and was recorded as
prepaid rent. This amount will be amortized to rent expense over the lease term of 10 years. The related rent expense recorded for the years
ended January 31, 2002, 2003 and 2004, totaled $11,000, $11,000, and $11,000, respectively.

      In fiscal year 2001, the Company issued a warrant to purchase 10,000 shares of Series D preferred stock at an exercise price of $3.89 per
share to this landlord. The warrant was issued in consideration of the Company’s lease for its corporate headquarters. The warrant was fully
vested at the date of grant without any performance obligations by the landlord and expires seven years from the date of grant. The warrant was
valued using the Black-Scholes pricing model. Assumptions used were as follows: fair value of the underlying stock of $3.89; risk-free interest
rate of 6.33 percent; contractual life of seven years; no dividends during the term; and volatility of 100 percent. The fair value of the warrant
totaled $33,000 and was recorded as prepaid rent. This amount will also be amortized to rent expense over the lease term of 10 years. The
related rent expense recorded for the years ended January 31, 2002, 2003 and 2004, totaled $3,000, $3,000 and $3,000, respectively.

                                                                       F-22
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                                                               salesforce.com, inc.

                                          Notes to Consolidated Financial Statements—(Continued)

      In fiscal year 2001, the Company issued a warrant to purchase 48,857 shares of Series C preferred stock at an exercise price of $1.75 per
share to a leasing company in consideration for capital leases. The warrant was fully vested at the date of grant without any performance
obligations by the leasing company and expires seven years from the date of grant or three years from the effective date of an initial public
offering by the Company, whichever is earlier. The warrant was valued using the Black-Scholes pricing model. Assumptions used were as
follows: fair value of the underlying stock of $1.75; risk-free interest rate of 6.27 percent; contractual life of seven years; no dividends during
the term; and volatility of 100 percent. The fair value of the warrant totaled $73,000 and was recorded as a discount to the related capital lease
obligation. This amount will be amortized to interest expense over the lease term, which is three years. The related interest expense recorded
for the years ended January 2002, 2003 and 2004, totaled $24,000, $24,000 and $6,000, respectively.

       In fiscal year 2001, the Company sold 3,341,902 shares of Series D preferred stock to an investor for aggregate proceeds of $12,999,999.
Based on the antidilution provisions described above, warrants to purchase Series D preferred stock were contingently issuable at the time of
the sale. Based on the information available at the time of sale, it was considered probable that warrants would be issued to the investor. The
proceeds from the sale of the Series D preferred stock were allocated to the Series D preferred stock and the contingent warrants based on their
estimated relative fair values. The estimated number of shares subject to the warrants to be issued was 580,639 at an exercise price of $3.89 per
share. These warrants are exercisable immediately and expire five years from the date of grant. The fair value of the warrants was estimated
using the Black-Scholes pricing model. Assumptions used were as follows: fair value of the underlying stock of $3.89; risk-free interest rate of
4.86 percent; contractual life of five years; no dividends during the term; and volatility of 100 percent. The apportioned value of the warrants of
$1,527,000 has been allocated to additional paid-in capital. In January 2001, warrants to purchase 334,158 shares were issued to the investor. In
accordance with the antidilution provisions described above, the sale of Series D preferred stock in June 2001, as described below, triggered the
issuance of additional warrants to purchase shares of Series D preferred stock to this investor. As a result, the Company issued in July 2001
warrants to purchase an aggregate of 246,481 shares of Series D preferred stock at an exercise price of $3.89 per share to the investor. Given
that the fair value of these contingent warrants was recorded in fiscal year 2001, no further amounts were recorded with respect to this
transaction.

      Issuance of Series D Preferred Stock and Common Stock

       In June 2001, the Company sold 748,402 shares of Series D preferred stock and 2,000,000 shares of common stock to an investor for
aggregate gross proceeds of $2,931,266. The proceeds were allocated to the Series D preferred stock and the common stock issued based on
their relative fair values. The relative fair value was calculated based on the fair market value of the Series D preferred stock and common
stock at the commitment date to purchase the Series D preferred stock and common stock. A beneficial conversion feature of $70,000 was
calculated based on the difference between the accounting conversion price of the Series D preferred stock and the fair value of common stock
at the commitment date. Since the Series D preferred stock was immediately convertible upon issuance, the Company recognized a deemed
dividend for the discount of the Series D preferred stock created by the beneficial conversion feature amounting to $70,000.

6.   Stockholders’ Equity

      Stock Options Issued to Employees

      In April 1999, the Board of Directors adopted and stockholders approved the 1999 Stock Option Plan (the ―Plan‖), which provides for the
issuance of incentive and nonstatutory options to employees and nonemployees of the Company. Through January 31, 2004, the Company
reserved 38,000,000 shares of common stock for issuance under the Plan. As of January 31, 2004, remaining shares of common stock available
for grant under the Plan were 2,889,379.

                                                                       F-23
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                                                               salesforce.com, inc.

                                             Notes to Consolidated Financial Statements—(Continued)

       Options issued under the Plan are generally for periods not to exceed 10 years and must be issued at prices not less than 85 percent of the
estimated fair value of the shares of common stock on the date of grant as determined by the Board of Directors. The Plan provides for grants
of immediately exercisable options; however, the Company has the right to repurchase any unvested common stock upon the termination of
employment at the original exercise price. In accordance with EITF Issue 00-23, Issues Related to Accounting for Stock Compensation under
APB Opinion No. 25 and FASB Interpretation No. 44 , stock options granted or modified after March 21, 2002, that are subsequently exercised
for cash prior to vesting are treated differently from prior grants and related exercises. The consideration received for an exercise of an option
granted after the effective date of the new guidance is considered to be a deposit of the exercise price, and the related dollar amount is recorded
as a liability. The shares and liability are only reclassified into equity as the award vests. The Company has appropriately applied the new
guidance and recorded a liability on the consolidated balance sheets relating to the exercise of options for 1,132,562 shares that were unvested
as of January 31, 2003, totaling $1,163,000. The liability at January 31, 2004 was $749,000 relating to the exercise of options for 520,000
shares, of which 132,000 shares related to the exercise of options during fiscal 2004. Options become vested and exercisable at such times and
under such conditions as determined by the Board of Directors. Options, or shares issued upon exercise of options, generally vest over four
years, with 25 percent vesting after one year and the balance vesting monthly over the remaining period.

      Stock option activity is as follows:
                                                                                                               Options Outstanding

                                                                                                                               Weighted-
                                                                                        Shares             Outstanding         Average
                                                                                      Available for          Stock             Exercise
                                                                                         Grant              Options             Price

            Balance as of January 31, 2001                                               2,959,729           3,308,475         $     0.90
                Granted                                                                 (2,537,025 )         2,537,025               0.97
                Exercised                                                                       —             (495,974 )             0.51
                Cancelled                                                                1,274,966          (1,274,966 )             1.50
                Repurchased                                                              2,008,348                  —                  —

            Balance as of January 31, 2002                                               3,706,018           4,074,560               0.81
                Increase in options authorized                                           5,000,000                  —                  —
                Granted                                                                 (8,878,000 )         8,878,000               1.10
                Exercised                                                                       —           (1,680,122 )             0.94
                Cancelled                                                                  746,559            (746,559 )             1.18
                Repurchased                                                                734,482                  —                  —

            Balance as of January 31, 2003                                               1,309,059          10,525,879               1.01
                Increase in options authorized                                           8,000,000                  —                  —
                Granted                                                                 (7,637,500 )         7,637,500               3.74
                Exercised                                                                       —           (1,041,131 )             1.40
                Cancelled                                                                1,193,853          (1,193,853 )             1.28
                Repurchased                                                                 23,967                  —                  —

            Balance as of January 31, 2004                                              2,889,379           15,928,395         $     2.29


      All options were exercisable at January 31, 2004, and options for 7,028,000 shares granted under the Plan were fully vested as of January
31, 2004. Any unvested shares may be repurchased by the Company at the option exercise price in the event of the employee’s termination.
The right to repurchase unvested shares lapses at the rate of the vesting schedule. In addition, the Company has a 30-day right of first refusal if
an optionee intends to

                                                                       F-24
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                                                              salesforce.com, inc.

                                         Notes to Consolidated Financial Statements—(Continued)

sell shares acquired pursuant to options. Shares subject to repurchase by the Company were exercised at prices ranging from $0.06 to $4.00 per
share. As of January 31, 2004, 696,000 shares remained subject to repurchase.

      For the years ended January 31, 2002, 2003 and 2004, the Company recorded $1,602,000, $8,913,000 and $3,627,000, respectively, of
deferred stock-based compensation expense for the excess of the deemed fair market value over the exercise price at the date of grant related to
stock options granted to employees. The Company reversed deferred stock-based compensation related to cancellation of options for terminated
employees in the amount of $2,524,000, $1,248,000 and $1,212,000 in the years ended Jannuary 31, 2002, 2003 and 2004, respectively. The
Company amortized $2,436,000, $2,591,000 and $3,491,000 to expense in the years ended Jannuary 31, 2002, 2003 and 2004, respectively.
The compensation expense is being recognized on a straight-line basis over the option-vesting period of four years.

     During the years ended January 31, 2002, 2003 and 2004, the Company accelerated the vesting of certain stock options relating to
terminated employees. As a result, the Company recorded compensation expense totaling $1,298,000, $178,000 and $146,000, respectively.

      The following table summarizes information about stock options outstanding:

      As of January 31, 2004:
                                                                               Options Outstanding

                                                                                     Weighted-
                                                                                      Average                  Weighted-
                                                                                     Remaining                 Average
                      Range of                           Number                      Contractual               Exercise
                    Exercise Prices                     Outstanding                  Life (Years)               Price

                    $0.02 to $0.95                      2,110,953                       6.49                    $0.34
                    $1.10                               5,757,476                       7.97                     1.10
                    $1.25 to $2.00                        833,600                       6.55                     1.69
                    $2.50                               4,742,750                       9.41                     2.50
                    $4.00 to $8.00                      2,483,616                       9.70                     5.91

                                                       15,928,395


      Notes Receivable from Stockholders

      During fiscal 2001, certain employees exercised their stock options with notes. None of these employees is an executive officer or
director. The notes are full recourse and collateralized by the stock of the individuals. The notes bear an interest rate of 6 percent. The notes
receivable have been classified as a reduction of stockholders’ deficit and are due at various dates through September 2005. During fiscal 2003,
the Company terminated one of these employees and repurchased the unvested shares through cancellation of $109,000 of the related note
receivable. The remaining principal and interest of $1,574,000 and $1,674,000 at January 31, 2003 and January 31, 2004, respectively, on the
notes remains outstanding and is due on September 7, 2005.

                                                                      F-25
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                                                               salesforce.com, inc.

                                          Notes to Consolidated Financial Statements—(Continued)

      Stock Awards Issued to Non-employees

     During the years ended January 31, 2002, 2003 and 2004, the Company granted stock awards of 10,000, zero and 100,000 shares,
respectively, to non-employees with vesting terms ranging from 18 to 48 months. Compensation expense is re-measured as the shares vest and
was recorded over the vesting periods. Such expenses amounted to $292,000, $310,000 and $162,000 for the years ended January 31, 2002,
2003 and 2004, respectively. Such expense was estimated using the Black-Scholes pricing model with the following weighted-average
assumptions:

                    Risk-free interest rate                                                                         6.00%
                    Contractual lives                                                                            18–48 months
                    Expected dividend yield                                                                            0%
                    Expected volatility                                                                             100%

      Warrants for Common Stock

      In fiscal year 2001, the Company issued four warrants to purchase 125,000 shares each of common stock at an exercise price of $5.00 to
the salesforce.com/foundation (the ―Foundation‖), which is a nonprofit related party. The chief executive officer of the Company is also the
chairman of the Board of Trustees of the Foundation. The warrants were originally scheduled to expire in February 2002, August 2002, August
2003, and August 2004, respectively. The warrants were issued as a charitable contribution to the Foundation. The warrants were fully vested
on the date of grant without any performance obligations by the Foundation. The warrants were valued using the Black-Scholes model.
Assumptions used were as follows: fair value of the underlying stock at $2.05 per share; risk-free interest rate of 6 percent; contractual life of
1.43, 1.93, 2.93, and 3.93 years, respectively; no dividends during the term; and volatility of 100 percent. The fair value of the warrants totaled
$377,500 and was recorded in general and administrative expense in fiscal 2001. In August 2002, the Board of Directors authorized the
cancellation of these warrants and issuance of four new warrants, each to purchase 125,000 shares of common stock at $1.10 per share. The
warrants are exercisable for one-year terms beginning on the earlier of the initial public offering of the Company or August 1 2003, August 1,
2004, August 1, 2005, and August 1, 2006, respectively. The warrants were issued as a charitable contribution to the Foundation. The warrants
were fully vested on the date of grant without any performance obligations by the Foundation.

      The warrants were valued on the date of modification of the award by calculating the difference between the fair value of the new
warrants and the old warrants immediately before the modification. The estimated fair values of the old and new warrants were calculated using
the Black-Scholes pricing model with the following assumptions: fair value of the underlying stock of $2.07 per share; risk-free interest rate of
2 percent; contractual lives ranging from .08 to 5 years; no dividends during the term; and volatility of 100 percent. The fair value of the
warrants totaled $656,000 and was recorded as general and administrative expense. As of January 31, 2004, all of the warrants to purchase an
aggregate of 500,000 shares of common stock remain outstanding.

      In fiscal year 2003, the Company issued two warrants to purchase 50,000 and 35,000 shares, respectively, of common stock at an exercise
price of $1.10 to an executive recruiting firm. The warrants were fully vested on the date of grant and are exercisable at any time for a term of
five years. The warrants were valued using the Black-Scholes pricing model with the following assumptions: fair value of the underlying stock
of $1.96 and $2.50 per share, respectively; risk-free interest rate of 5 percent; contractual life of five years; no dividends during the term; and
volatility of 100 percent. The fair value of the warrants totaled $153,000 and was recorded as general and administrative expense.

                                                                       F-26
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                                                                salesforce.com, inc.

                                           Notes to Consolidated Financial Statements—(Continued)

      Common Stock

      In November 2001, the Company entered into an agreement with an advertising agency in which the agency agreed to provide the
Company with promotional advertising services in exchange for 250,000 shares of the Company’s common stock. The shares were fully vested
and were not subject to any repurchase rights. The term of the contract was one year. The Company established fair value of the transaction
using the fair value of the common stock. The advertising services were provided over the term of the contract, and the expense was recognized
over the service period of one year. The expense related to this agreement was $82,000, $248,000 and zero for the years ended January 31,
2002, 2003 and 2004, respectively.

      In January 2004, the Board of Directors authorized the issuance of 10,000 shares of common stock to a current board member and 22,500
shares to a former board member. These share issuances were in exchange for past services as members of the Company’s board of directors.
The expense associated with these share issuances was $260,000 and was recognized immediately.

      The Company has reserved shares of common stock for future issuance at January 31, 2004, as follows:

            The Plan as of January 31, 2004:
                Options outstanding                                                                                            15,928,395
                Stock available for future grants                                                                               2,889,379
            Common stock warrants                                                                                                 585,000
            Convertible preferred stock                                                                                        58,024,345
            Convertible preferred stock warrants                                                                                  714,496

                                                                                                                               78,141,615


      In December 2003, the Board of Directors authorized the filing of a registration statement with the Securities and Exchange Commission
for an initial public offering of the Company’s common stock. Additionally, the Board of Directors approved the 2004 Equity Incentive Plan,
the 2004 Employee Stock Purchase Plan and the 2004 Outside Directors Stock Plan. These plans were approved by the Company’s
stockholders in February 2004 and will be effective upon the closing of the initial public offering. The 2004 Employee Stock Purchase Plan
will be available to all eligible employees, who will be able to individually purchase a maximum of 1,500 shares annually at a price equal to 85
percent of the lower of the fair market value at the start date of the offering or fair market value on the semi-annual purchase dates. The
Company will initially reserve for issuance 1,000,000 shares of common stock. The 2004 Equity Incentive Plan will be the successor equity
incentive program to the 1999 Stock Option Plan and will increase the shares reserved for issuance by 4,000,000 shares. For the 2004 Outside
Directors Stock Plan, the Company will reserve for issuance 1,000,000 shares of common stock. The 2004 Employee Stock Purchase Plan and
2004 Equity Incentive Plan have provisions for annual automatic increases to the shares reserved for issuance based on a specific percentage of
the total number of shares outstanding at each year-end.

7.   Commitments and Contingencies

      Letter of Credit

      In fiscal year 2001, the Company established a $3,500,000 letter of credit in favor of its principal landlord. This letter of credit is
collateralized by a certificate of deposit maintained at the granting financial institution. As of January 31, 2004, the letter of credit was
outstanding; however, no amounts had been drawn against it. The letter of credit renews annually through December 31, 2010.

                                                                        F-27
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                                                               salesforce.com, inc.

                                          Notes to Consolidated Financial Statements—(Continued)

      In addition, the Company had two letters of credit outstanding as of January 31, 2004, both of which were collateralized by certificates of
deposit maintained at the granting financial institution. Both letters of credit have renewal provisions and expire at various dates through June
2006.

        Leases

        The Company leases office space and equipment under noncancelable operating and capital leases with various expiration dates through
2011.

      The Company has entered into various capital lease arrangements to obtain equipment for its operations. These agreements are typically
for three years, with interest rates ranging from 7 percent to 8 percent per year. The leases are secured by the underlying equipment.

      The Company is a lessee to certain leased equipment acquired under a capital lease. In June 2002, the Company amended an existing
capital lease agreement. The amended lease met the requirements for classification as an operating lease. As a result of this amendment, the
Company reduced its capital lease liability by $569,000 in fiscal year 2003.

        Future minimum lease payments under noncancelable operating and capital leases areas are as follows:
                                                                                                         Capital            Operating
                                                                                                         Leases              Leases

            Fiscal Year Ended January 31:
            2005                                                                                       $ 80,000         $     8,192,000
            2006                                                                                             —                7,278,000
            2007                                                                                             —                4,892,000
            2008                                                                                             —                4,143,000
            2009                                                                                             —                4,200,000
            Thereafter                                                                                       —               10,010,000

            Total minimum lease payments                                                                  80,000        $    38,715,000

            Less: amount representing interest                                                             (2,000 )

            Present value of capital lease obligations—current portion                                 $ 78,000


      The terms of the lease agreements provide for rental payments on a graduated basis. The Company recognizes rent expense on the
straight-line basis over the lease period and has accrued for rent expense incurred but not paid.

     In fiscal year 2001, the Company issued a warrant to purchase 48,857 shares of Series C preferred stock to a leasing company in
consideration for a capital lease. The fair value of the warrant of $73,000 was recorded as a discount to the capital lease obligation and is being
amortized to interest expense over the lease term (see Note 5). The effective interest rate on the capital lease when considering the value of the
warrants issued is approximately 10.9 percent.

     Rent expense for the years ended January 31, 2002, 2003 and 2004 was $3,962,000, $3,708,000 and $4,686,000, respectively. Sublease
income for the years ended January 31, 2002, 2003 and 2004, was $218,000, $219,000 and $219,000, respectively. Aggregate future minimum
sublease rentals to be received under noncancelable subleases as of January 31, 2004 was $109,000.

                                                                         F-28
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                                                             salesforce.com, inc.

                                        Notes to Consolidated Financial Statements—(Continued)

     In December 2001, the Company abandoned excess office space in San Francisco. The Company accrued for lease and related costs of
$7,657,000 pertaining to the estimated future obligations of noncancelable lease payments for these excess facilities.

       In August 2003, the Company executed a Third Amendment to Office Lease with its landlord. This agreement modified the original lease
such that the total leased space under the amended agreement excluded the portion of the leased space that was abandoned by the Company in
December 2001. As a result of this amendment, the Company recorded a reduction in its lease liability of $4,342,000 during the third quarter of
fiscal 2004. During the fourth quarter of fiscal 2004, the Company increased its accrual for the remaining abandoned space in San Francisco by
$900,000. The Company increased its estimated vacancy period and lowered its projected subtenant income as a result of the difficulty in
securing subtenants for the remaining space.

       The remaining lease abandonment accrual is based on estimates of vacancy periods and sublease income. The actual vacancy periods may
differ from these estimates, and sublease income, if any, may not materialize. Accordingly, these estimates may be adjusted in future periods.
The remaining liability at January 31, 2004 was $1,971,000, of which $477,000 was the current portion. Payments in future years are $240,000
in fiscal 2006, $228,000 in fiscal 2007, $238,000 in fiscal 2008, $243,000 in fiscal 2009, and $545,000 thereafter.

8.   Employee Benefit Plan

      The Company has a 401(k) plan covering all eligible employees. The Company is not required to contribute to the plan and has made no
contributions through January 31, 2004.

9.   Related-Party Transactions

     The Company subleases a portion of its San Francisco office facility to another party. One of the stockholders of the Company is also a
majority shareholder of the sublease tenant. In October 2001, the sublease tenant paid the Company $110,000 for early termination of the
sublease agreement with respect to a portion of the leased space.

     In January 1999, the Foundation was chartered to build philanthropic programs that are particularly focused on youth and technology.
The Company’s chairman is the chairman of the Foundation. He, one of the Company’s executive officers 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 totaled $60,000 for the each of the years ended January 31, 2002, 2003 and 2004.

      In addition to the resource sharing, the Company has issued warrants to purchase 500,000 shares of common stock and has donated free
of charge subscriptions to the Company’s service to registered section 501(c)(3) nonprofit organizations. The fair value of these donated
subscriptions is currently $150,000 per month. The Company plans to continue providing free subscriptions to qualified nonprofit organizations
in the future.

                                                                     F-29
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                                                                salesforce.com, inc.

                                            Notes to Consolidated Financial Statements—(Continued)

10.   Unaudited Pro Forma Net (Loss) Income Per Share

    Pro forma net (loss) income per share has been computed to give effect to convertible preferred stock that will automatically convert into
common stock upon the closing of the Company’s initial public offering for the fiscal year ended January 31, 2004. A reconciliation of the
numerator and denominator used in the calculation of pro forma net (loss) income per share is as follows (in thousands):
                                                                                                                         Fiscal Year
                                                                                                                           Ended
                                                                                                                         January 31,
                                                                                                                            2004

            Numerator:
               Net income                                                                                               $      3,514

            Denominator:
                Weighted-average shares outstanding, net of weighted-average shares of common stock subject
                  to repurchase                                                                                              29,605
                Adjustments to reflect the assumed conversion of the convertible preferred stock from date of
                  issuance                                                                                                   58,024
                Effect of dilutive securities—employee stock options and warrants                                             7,780

                    Weighted-average shares used in computing diluted pro forma net (loss) income per share                  95,409


      The Company excluded options exercisable for 901,000 shares of common stock from its computation of pro forma net income per share
for the year ended January 31, 2004 as these securities had an anti-dilutive impact.

                                                                        F-30
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                           The highest rating of any enterprise
                    application product InfoWorld reviewed in 2003.
                                                          – InfoWorld
Table of Contents

                                                                       PART II

                                            INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13.     Other Expenses of Issuance and Distribution

       The following table sets forth all expenses, other than the underwriting discounts and commissions, payable by the registrant in
connection with the sale of the common stock being registered. All the amounts shown are estimates except the registration fee and the NASD
filing fee.
                                                                                                                                              Total

SEC registration fee                                                                                                                     $       9,300
NASD filing fee                                                                                                                                 12,000
NYSE filing fee                                                                                                                                250,000
Blue sky qualification fees and expenses                                                                                                        10,000
Printing and engraving expenses                                                                                                                150,000
Legal fees and expenses                                                                                                                      1,100,000
Accounting fees and expenses                                                                                                                 1,750,000
Transfer agent and registrar fees                                                                                                               30,000
Miscellaneous                                                                                                                                  388,700

     Total                                                                                                                               $   3,700,000


Item 14.     Indemnification of Officers and Directors

       As permitted by Section 145 of the Delaware General Corporation Law, the bylaws of the registrant provide that (i) the registrant is
required to indemnify its directors and executive officers to the fullest extent not prohibited by the Delaware General Corporation Law, (ii) the
registrant may, in its discretion, indemnify its other officers, employees and agents as set forth in the Delaware General Corporation Law, (iii)
the registrant is required to advance all expenses incurred by its directors and executive officers in connection with certain legal proceedings,
(iv) the rights conferred in the bylaws are not exclusive, and (v) the registrant is authorized to enter into indemnification agreements with its
directors, officers, employees and agents.

       The registrant has entered into agreements with its directors and executive officers that require the registrant to indemnify such persons
against expenses, judgments, fines, settlements, and other amounts that any such person becomes legally obligated to pay (including with
respect to a derivative action) in connection with any proceeding, whether actual or threatened, to which such person may be made a party by
reason of the fact that such person is or was a director or officer of the registrant or any of its affiliates, provided such person acted in good
faith and in a manner such person reasonably believed to be in, or not opposed to, the best interests of the registrant. The indemnification
agreements also set forth certain procedures that will apply in the event of a claim for indemnification thereunder. At present, no litigation or
proceeding is pending that involves a director or officer of the registrant regarding which indemnification is sought, nor is the registrant aware
of any threatened litigation that may result in claims for indemnification.

      The underwriting agreement filed as exhibit 1.1 to this registration statement provides for indemnification under certain circumstances by
the underwriters of the registrant, its directors, and certain of its officers for liabilities arising under the Securities Act of 1933, as amended (the
―Securities Act‖), or otherwise.

      The registrant maintains a directors’ and officers’ insurance and registrant reimbursement policy. The policy insures directors and officers
against unindemnified losses arising from certain wrongful acts in their capacities as directors and officers and reimburses the registrant for
those losses for which the registrant has lawfully indemnified the directors and officers. The policy contains various exclusions, none of which
apply to this offering.

                                                                          II-1
Table of Contents

      The Second Amended and Restated Investor Rights Agreement between the registrant and certain investors provides for
cross-indemnification in connection with registration of the registrant’s common stock on behalf of such investors.

Item 15.     Recent Sales of Unregistered Securities

      Since December 17, 2000, the registrant has sold and issued the following unregistered securities:

      1. From March 2000 to June 2001, the registrant sold 12,059,360 shares of Series D preferred stock at $3.89 per share to 33 investors,
consisting of 13 individual investors and 20 venture capital and investment funds, for total proceeds of $46,910,910, all of which was paid in
cash. As part of the Series D preferred stock offering, in June 2001 the registrant sold 2,000,000 shares of common stock at $0.01 per share to
The Individual Funds and in January 2001 and June 2001, the registrant issued warrants to purchase 580,639 shares of Series D preferred stock
at an exercise price of $3.89 per share to Attractor Funds.

      2. In December 2000, the registrant issued a warrant to purchase 40,000 shares of Series C preferred stock at an exercise price of $1.75
per share and a warrant to purchase 10,000 shares of Series D preferred stock at an exercise price of $3.89 per share to TMG/Landmark, L.P.,
the landlord of the registrant’s headquarters office in San Francisco, California.

      3. In June 2002, the registrant issued warrants to purchase 500,000 shares of common stock at an exercise price of $1.10 per share to the
salesforce.com/foundation, a non-profit public charity and related party of the registrant.

     4. In April 2002, the registrant issued 30,000 shares of common stock to Outcast Communications and 250,000 shares of common stock
to CXO Media, Inc., in consideration for advertising services provided by such firms.

      5. In July 2002 and October 2002, the registrant issued warrants to purchase a total of 85,000 shares of common stock at an exercise price
of $1.10 per share to Heidrick & Struggles, Inc., a retained search firm.

    6. In January 2004, the registrant issued 32,500 shares of common stock to two individuals in consideration for their past services as
members of the registrant’s board of directors.

      7. Since inception and through January 31, 2004, the registrant had issued 24,428,752 shares of common stock to its employees, directors,
consultants and other service providers upon exercise of options granted by the registrant under its 1999 Stock Option Plan, with exercise
prices ranging from $0.00 to $8.00 per share.

       The sales and issuances of securities above, other than the sales and issuances described in item 7, were issued to accredited or
sophisticated investors determined to be exempt from registration under Section 4(2) of the Securities Act or Rule 506 of Regulation D
thereunder as transactions by an issuer not involving a public offering. The sales and issuances of securities listed above in item 7 were deemed
to be exempt from registration under the Securities Act by virtue of Rule 701 promulgated under Section 3(b) of the Securities Act as
transactions pursuant to compensation benefits plans and contracts relating to compensation. All of the foregoing securities are deemed
restricted securities for purposes of the Securities Act.

                                                                      II-2
Table of Contents

Item 16.      Exhibits and Financial Statement Schedules

        (a)   Exhibits.
   Exhibit
   Number                                                                     Description of Document

 1.1 (a)                  Form of Underwriting Agreement.
 3.1*                     Eighth Amended and Restated Certificate of Incorporation of salesforce.com, inc.
 3.2                      Form of Restated Certificate of Incorporation of salesforce.com, inc. to be filed upon the closing of the offering to
                          which this Registration Statement relates.
 3.3*                     Bylaws of salesforce.com, inc.
 3.4                      Form of Amended and Restated Bylaws of salesforce.com, inc., to be effective upon the closing of the offering to
                          which this Registration Statement relates.
 4.1*                     Second Amended and Restated Rights Agreement dated as of November 28, 2000 and amendments thereto.
 4.2                      Specimen Common Stock Certificate.
 5.1 (a)                  Opinion of Gray Cary Ware & Freidenrich LLP.
10.1 (b)                  Form of Indemnification Agreement between salesforce.com, inc and its officers and directors.
10.2 (b)*                 1999 Stock Option Plan.
10.3 (b)                  2004 Equity Incentive Plan.
10.4 (b)                  2004 Employee Stock Purchase Plan.
10.5 (b)                  2004 Outside Directors Stock Plan.
10.6*                     Office Lease dated as of June 23, 2000 between salesforce.com, inc. and TMG/One Market, L.P., and amendments
                          thereto.
10.7*                     Sublease Agreement dated as of August 5, 2003 between salesforce.com, inc. and Vignette Corporation.
10.8 (c)*                 Web Hosting and Internet Access Service Agreement dated January 8, 2003 between salesforce.com, inc. and Qwest
                          Communications Corporation, and amendments thereto.
10.9*                     Form of warrant to purchase shares of Series C Preferred Stock.
10.10*                    Form of warrant to purchase shares of Series D Preferred Stock.
10.11*                    Resource Sharing Agreement dated as of March 3, 2003 between salesforce.com, inc. and salesforce.com/foundation.
10.12*                    Joint Venture Agreement dated as of December 7, 2000 among salesforce.com, inc., SunBridge, Inc. and Kabushiki
                          Kaisha salesforce.com.
10.13*                    License Agreement dated as of January 19, 2001 by and between salesforce.com, inc. and Kabushiki Kaisha
                          salesforce.com.
10.14*                    Consulting Services Agreement dated as of January 19, 2001 by and between salesforce.com, inc. and Kabushiki
                          Kaisha salesforce.com.
16.1*                     Letter from PricewaterhouseCoopers.
21.1*                     List of Subsidiaries.
23.1 (a)                  Consent of Gray Cary Ware & Freidenrich LLP (included in Exhibit 5.1).
23.2                      Consent of Ernst & Young LLP, Independent Auditors.
24.1*                     Power of Attorney (see page II-5 of this Registration Statement).

                                                                       II-3
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*     Previously filed.

(a)   To be filed by amendment.

(b)   Denotes a management contract or compensatory plan or arrangement.

(c)   Confidential treatment has been requested for a portion of this exhibit.

      (b)    Financial Statement Schedules

      Schedules not listed above have been omitted because they are not required, they are not applicable or the information is already included
in the financial statements or notes thereto.

Item 17.     Undertakings

       The undersigned registrant hereby undertakes to provide to the underwriters at the closing specified in the underwriting agreement
certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser.

      Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers, and controlling persons of
the registrant pursuant to the provisions described in Item 14 or otherwise, the registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a
director, officer, or controlling person of the registrant in the successful defense of any action, suit, or proceeding) is asserted by such director,
officer, or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

      The undersigned registrant undertakes that:

       (1) for purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in the form of prospectus filed by the registrant pursuant to Rule 424(b)(1)
or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective, and

      (2) for the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.

                                                                         II-4
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                                                                 SIGNATURES

      Pursuant to the requirements of the Securities Act, the registrant has duly caused this Amendment No. 3 to the Registration Statement to
be signed on its behalf by the undersigned, thereunto duly authorized, in the City of San Francisco, State of California, on the 20th day of April
2004.

                                                                                        salesforce.com, inc.

                                                                                        By:               /s/    M ARC B ENIOFF *

                                                                                                                 Marc Benioff
                                                                                                     Chairman and Chief Executive Officer
                                                                                                         (Principal Executive Officer)

     Pursuant to the requirements of the Securities Act, this Amendment No. 3 to the Registration Statement has been signed by the following
persons in the capacities and on the dates indicated:
                                 Signature                                               Title                                        Date



                     /s/   M ARC B ENIOFF *                     Chairman of the Board of Directors and Chief                    April 20, 2004
                                                                  Executive Officer (Principal Executive Officer)
                               Marc Benioff


               /s/      S TEVE C AKEBREAD *                     Chief Financial Officer (Principal Financial &                  April 20, 2004
                                                                  Accounting Officer)
                              Steve Cakebread


               /s/      A LAN H ASSENFELD *                     Director                                                        April 20, 2004

                              Alan Hassenfeld


                  /s/      C RAIG R AMSEY *                     Director                                                        April 20, 2004

                               Craig Ramsey


         /s/      S ANFORD R. R OBERTSON *                      Director                                                        April 20, 2004

                           Sanford R. Robertson


            /s/         S TRATTON S CLAVOS *                    Director                                                        April 20, 2004

                              Stratton Sclavos


               /s/      L ARRY T OMLINSON *                     Director                                                        April 20, 2004

                              Larry Tomlinson


               /s/      M AGDALENA Y ESIL *                     Director                                                        April 20, 2004

                              Magdalena Yesil


*By:                    /S/     D AVID S CHELLHASE
                           David Schellhase, Attorney-in-Fact
                                    April 20, 2004

                                                                        II-5
Table of Contents

                                                                  EXHIBIT INDEX
      Exhibit
      Number                                                                   Description of Document

 1.1 (a)                     Form of Underwriting Agreement.
 3.1*                        Eighth Amended and Restated Certificate of Incorporation of salesforce.com, inc.
 3.2                         Form of Restated Certificate of Incorporation of salesforce.com, inc. to be filed upon the closing of the offering to
                             which this Registration Statement relates.
 3.3*                        Bylaws of salesforce.com, inc.
 3.4                         Form of Amended and Restated Bylaws of salesforce.com, inc., to be effective upon the closing of the offering to
                             which this Registration Statement relates.
 4.1*                        Second Amended and Restated Rights Agreement dated as of November 28, 2000 and amendments thereto.
 4.2                         Specimen Common Stock Certificate.
 5.1 (a)                     Opinion of Gray Cary Ware & Freidenrich LLP.
10.1 (b)                     Form of Indemnification Agreement between salesforce.com, inc and its officers and directors.
10.2 (b)*                    1999 Stock Option Plan.
10.3 (b)                     2004 Equity Incentive Plan.
10.4 (b)                     2004 Employee Stock Purchase Plan.
10.5 (b)                     2004 Outside Directors Stock Plan.
10.6*                        Office Lease dated as of June 23, 2000 between salesforce.com, inc. and TMG/One Market, L.P., and amendments
                             thereto.
10.7*                        Sublease Agreement dated as of August 5, 2003 between salesforce.com, inc. and Vignette Corporation.
10.8 (c)*                    Web Hosting and Internet Access Service Agreement dated January 8, 2003 between salesforce.com, inc. and Qwest
                             Communications Corporation, and amendments thereto.
10.9*                        Warrant to purchase shares of Series C Preferred Stock.
10.10*                       Warrant to purchase shares of Series D Preferred Stock.
10.11*                       Resource Sharing Agreement dated as of March 3, 2003 between salesforce.com, inc. and salesforce.com/foundation.
10.12*                       Joint Venture Agreement dated as of December 7, 2000 among salesforce.com, inc., SunBridge, Inc. and Kabushiki
                             Kaisha salesforce.com.
10.13*                       License Agreement dated as of January 19, 2001 by and between salesforce.com, inc. and Kabushiki Kaisha
                             salesforce.com.
10.14*                       Consulting Services Agreement dated as of January 19, 2001 by and between salesforce.com, inc. and Kabushiki
                             Kaisha salesforce.com.
16.1*                        Letter from PricewaterhouseCoopers.
21.1*                        List of Subsidiaries.
23.1 (a)                     Consent of Gray Cary Ware & Freidenrich LLP (included in Exhibit 5.1).
23.2                         Consent of Ernst & Young LLP, Independent Auditors.
24.1*                        Power of Attorney (see page II-5 of this Registration Statement).

*        Previously filed.
(a)      To be filed by amendment.
(b)      Denotes a management contract or compensatory plan or arrangement.
(c)      Confidential treatment has been requested for a portion of this exhibit.
                                                                                                                                       Exhibit 3.2

                                AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF
                                                SALESFORCE.COM, INC.

    salesforce.com, inc., a corporation organized and existing under the laws of the State of Delaware, hereby certifies as follows:

         A. The name of the corporation is salesforce.com, inc. The date of filing of its original Certificate of Incorporation with the
    Secretary of State of the State of Delaware was February 3, 1999.

         B. Pursuant to Sections 242 and 245 of the General Corporation Law of the State of Delaware, this Restated Certificate of
    Incorporation restates and integrates and further amends the provisions of the Certificate of Incorporation of this corporation.

          C. The text of the Certificate of Incorporation is hereby amended and restated in its entirety to read in full as follows:

FIRST:         The name of the corporation is salesforce.com, inc. (hereinafter sometimes referred to as the ―Corporation‖).
SECOND:        The address of the registered office of the Corporation in the State of Delaware is Incorporating Services, Ltd., 15 East North
               Street, in the City of Dover, County of Kent. The name of the registered agent at that address is Incorporating Services, Ltd.
THIRD:         The purpose of the Corporation is to engage in any lawful act or activity for which a corporation may be organized under the
               General Corporation Law of Delaware.
FOURTH:        A. The total number of shares of all classes of stock which the Corporation shall have authority to issue is Four Hundred Five
               Million (405,000,000) shares consisting of:
                   1. Four Hundred Million (400,000,000) shares of common stock, par value of one-tenth of one cent $.001 per share (the
               ―Common Stock‖).
                   2. Five Million (5,000,000) shares of preferred stock, par value of one-tenth of one cent $.001 per share (the ―Preferred
               Stock‖); and
               B. The Board of Directors is authorized, subject to any limitations prescribed by law, to provide for the issuance of shares of
               Preferred Stock in series and, by filing a certificate pursuant to the applicable law of the State of Delaware, to establish from
               time to time the number of shares to be included in each such series, and to fix the designation, powers, preferences and rights
               of the shares of each such series and any qualifications, limitations or restrictions thereon. The number of authorized shares of
               Preferred Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the
               affirmative vote of the holders

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         of a majority of the Common Stock without a vote of the holders of the Preferred Stock, or of any series thereof, unless a vote
         of any such holders is required pursuant to the certificate or certificates establishing the series of Preferred Stock.
FIFTH:   The following provisions are inserted for the management of the business and the conduct of the affairs of the Corporation, and
         for further definition, limitation and regulation of the powers of the Corporation and of its directors and stockholders:
         A. The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors. In addition
         to the powers and authority expressly conferred upon them by statute or by this Certificate of Incorporation or the Bylaws of
         the Corporation, the directors are hereby empowered to exercise all such powers and do all such acts and things as may be
         exercised or done by the Corporation.
         B. The directors of the Corporation need not be elected by written ballot unless the Bylaws so provide.
         C. Any action required or permitted to be taken by the stockholders of the Corporation must be effected at a duly called annual
         or special meeting of stockholders of the Corporation and may not be effected by any consent in writing by such stockholders.
         D. Special meetings of stockholders of the Corporation may be called only by either the Board of Directors, the Chairman of
         the Board or the President of the Corporation.
SIXTH:   A. The number of directors shall initially be seven (7) and, thereafter, shall be fixed from time to time exclusively by the Board
         of Directors. Upon the filing of this Amended and Restated Certificate of Incorporation (the ―Effective Date‖), the directors
         shall be divided into three classes with the term of office of the first class to expire at the first annual meeting of the
         stockholders following the Effective Date hereof; the term of office of the second class to expire at the second annual meeting
         of stockholders held following the Effective Date hereof; the term of office of the third class to expire at the third annual
         meeting of stockholders following the Effective Date hereof; and thereafter for each such term to expire at each third
         succeeding annual meeting of stockholders after such election. All directors shall hold office until the expiration of the term for
         which elected, and until their respective successors are elected, except in the case of the death, resignation, or removal of any
         director.
         B. Subject to the rights of the holders of any series of Preferred Stock then outstanding, newly created directorships resulting
         from any increase in the authorized number of directors or any vacancies in the Board of Directors resulting from death,
         resignation or other cause (including removal from office by a vote of

                                                                  2
           the stockholders) may be filled only by a majority vote of the directors then in office, though less than a quorum, or by the
           sole remaining director, and directors so chosen shall hold office for a term expiring at the next annual meeting of
           stockholders at which the term of office of the class to which they have been elected expires, and until their respective
           successors are elected, except in the case of the death, resignation, or removal of any director. No decrease in the number of
           directors constituting the Board of Directors shall shorten the term of any incumbent director.
           C. Subject to the rights of the holders of any series of Preferred Stock then outstanding, any directors, or the entire Board of
           Directors, may be removed from office at any time, but only for cause and only by the affirmative vote of the holders of at
           least sixty-six and two-thirds percent (66-2/3%) of the voting power of all of the then outstanding shares of capital stock of
           the Corporation entitled to vote generally in the election of directors, voting together as a single class.
SEVENTH:   The Board of Directors is expressly empowered to adopt, amend or repeal the Bylaws of the Corporation. The stockholders
           shall also have power to adopt, amend or repeal the Bylaws of the Corporation. Any adoption, amendment or repeal of the
           Bylaws of the Corporation by the stockholders shall require, in addition to any vote of the holders of any class or series of
           stock of the Corporation required by law or by this Certificate of Incorporation, the affirmative vote of the holders of at least
           sixty-six and two-thirds percent (66-2/3%) of the voting power of all of the then outstanding shares of the capital stock of the
           Corporation entitled to vote generally in the election of directors, voting together as a single class.
EIGHTH:    A director of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for
           breach of fiduciary duty as a director, except for liability (i) for any breach of the director’s duty of loyalty to the
           Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involved intentional misconduct or a
           knowing violation of law, (iii) under Section 174 of the Delaware General Corporation Law, or (iv) for any transaction from
           which the director derived an improper personal benefit.
           If the Delaware General Corporation Law is hereafter amended to authorize the further elimination or limitation of the
           liability of a director, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent
           permitted by the Delaware General Corporation Law, as so amended.
           Any repeal or modification of the foregoing provisions of this Article EIGHTH by the stockholders of the Corporation shall
           not adversely affect any right or protection of a director of the Corporation existing at the time of such repeal or
           modification.

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NINTH:       The Corporation reserves the right to amend or repeal any provision contained in this Amended and Restated Certificate of
             Incorporation in the manner prescribed by the laws of the State of Delaware and all rights conferred upon stockholders are
             granted subject to this reservation; provided, however, that, notwithstanding any other provision of this Amended and Restated
             Certificate of Incorporation or any provision of law which might otherwise permit a lesser vote or no vote, but in addition to
             any vote of the holders of any class or series of the stock of this Corporation required by law or by this Amended and Restated
             Certificate of Incorporation, the affirmative vote of the holders of at least sixty-six and two-thirds percent (66-2/3%) of the
             voting power of all of the then outstanding shares of the capital stock of the Corporation entitled to vote generally in the
             election of directors, voting together as a single class, shall be required to amend or repeal this Article NINTH, Sections C and
             D of Article FIFTH, Article SIXTH, Article SEVENTH or Article EIGHTH.

          D. That the Board of Directors of the Corporation adopted resolutions approving and adopting the foregoing amendment and
    restatement at a duly called meeting in December 2003.

          E. That the stockholders of the Corporation took action by written consent in lieu of a meeting in accordance with the applicable
    provisions of Sections 228 and 242 of the Delaware General Corporation Law in order to approve the foregoing amendment and
    restatement.

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     IN WITNESS WHEREOF, the Corporation has caused this Amended and Restated Certificate of Incorporation to be signed by its duly
authorized officer this day of                , 2004.

                                                                                SALESFORCE.COM, INC.

                                                                                By:

                                                                                       Marc Benioff, Chairman and
                                                                                       Chief Executive Officer

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                                                                                                                                       Exhibit 3.4

                                                               BYLAWS OF
                                                          SALESFORCE.COM, INC.

                                                                ARTICLE I
                                                              STOCKHOLDERS

     1.1 Place of Meetings . All meetings of stockholders shall be held at such place within or without the State of Delaware as may be
designated from time to time by the Board of Directors, the President or the Chief Executive Officer.

     1.2 Annual Meeting . The annual meeting of stockholders for the election of directors and for the transaction of such other business as
may properly be brought before the meeting shall be held on a date to be fixed by the Board of Directors at the time and place to be fixed by the
Board of Directors and stated in the notice of the meeting.

      1.3 Special Meetings . Special meetings of stockholders may be called at any time by the Board of Directors, the Chairman of the Board
or the President, for any purpose or purposes prescribed in the notice of the meeting and shall be held at such place, on such date and at such
time as the Board may fix. Business transacted at any special meeting of stockholders shall be confined to the purpose or purposes stated in the
notice of meeting.

      1.4 Notice of Meetings . Written notice of each meeting of stockholders, whether annual or special, shall be given not less than ten (10)
nor more than sixty (60) days before the date on which the meeting is to be held, to each stockholder entitled to vote at such meeting, except as
otherwise provided herein or as required by law (meaning here and hereafter, as required from time to time by the Delaware General
Corporation Law or the Certificate of Incorporation). The notices of all meetings shall state the place, date and hour of the meeting. The notice
of a special meeting shall state, in addition, the purpose or purposes for which the meeting is called. If mailed, notice is given when deposited
in the United States mail, postage prepaid, directed to the stockholder at his address as it appears on the records of the corporation.

       1.5 Voting List . The officer who has charge of the stock ledger of the corporation shall prepare, at least ten (10) days before each
meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the
address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of
any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten (10) days prior to the
meeting, at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or if not so
specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the
whole time of the meeting, and may be inspected by any stockholder who is present. This list shall determine the identity of the stockholders
entitled to vote at the meeting and the number of shares held by each of them.

     1.6 Quorum . Except as otherwise provided by law or these Bylaws, the holders of a majority of the shares of the capital stock of the
corporation entitled to vote at the meeting,

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present in person or represented by proxy, shall constitute a quorum for the transaction of business. If a quorum shall fail to attend any meeting,
the Chairman of the meeting or the holders of a majority of the shares of stock entitled to vote who are present, in person or by proxy, may
adjourn the meeting to another place, date or time.

      If a notice of any adjourned special meeting of stockholders is sent to all stockholders entitled to vote thereat, stating that it will be held
with those present constituting a quorum, then except as otherwise required by law, those present at such adjourned meeting shall constitute a
quorum, and all matters shall be determined by a majority of the votes cast at such meeting.

       1.7 Adjournments . Any meeting of stockholders may be adjourned to any other time and to any other place at which a meeting of
stockholders may be held under these Bylaws by the Chairman of the meeting or, in the absence of such person, by any officer entitled to
preside at or to act as Secretary of such meeting, or by the holders of a majority of the shares of stock present or represented at the meeting and
entitled to vote, although less than a quorum. When a meeting is adjourned to another place, date or time, written notice need not be given of
the adjourned meeting if the place, date and time thereof are announced at the meeting at which the adjournment is taken; provided, however,
that if the date of any adjourned meeting is more than thirty (30) days after the date for which the meeting was originally noticed, or if a new
record date is fixed for the adjourned meeting, written notice of the place, date, and time of the adjourned meeting shall be given in conformity
herewith. At the adjourned meeting, the corporation may transact any business which might have been transacted at the original meeting.

      1.8 Voting and Proxies . Each stockholder shall have one vote for each share of stock entitled to vote held of record by such stockholder
and a proportionate vote for each fractional share so held, unless otherwise provided by law or in the Certificate of Incorporation. Each
stockholder of record entitled to vote at a meeting of stockholders may vote in person or may authorize any other person or persons to vote or
act for him by written proxy executed by the stockholder or his authorized agent or by a transmission permitted by law and delivered to the
Secretary of the corporation. No stockholder may authorize more than one proxy for his shares. Any copy, facsimile transmission or other
reliable reproduction of the writing or transmission created pursuant to this Section may be substituted or used in lieu of the original writing or
transmission for any and all purposes for which the original writing or transmission could be used, provided that such copy, facsimile
transmission or other reproduction shall be a complete reproduction of the entire original writing or transmission.

      1.9 Action at Meeting . When a quorum is present at any meeting, any election shall be determined by a plurality of the votes cast by the
stockholders entitled to vote at the election, and all other matters shall be determined by a majority of the votes cast affirmatively or negatively
on the matter (or if there are two or more classes of stock entitled to vote as separate classes, then in the case of each such class, a majority of
each such class present or represented and voting affirmatively or negatively on the matter) shall decide such matter, except when a different
vote is required by express provision of law, the Certificate of Incorporation or these Bylaws.

    All voting, including on the election of directors, but excepting where otherwise required by law, may be by a voice vote; provided,
however, that upon demand therefor by a stockholder

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entitled to vote or his or her proxy, a stock vote shall be taken. Every stock vote shall be taken by ballot, each of which shall state the name of
the stockholder or proxy voting and such other information as may be required under the procedure established for the meeting. Every vote
taken by ballot shall be counted by an inspector or inspectors appointed by the chairman of the meeting. The corporation may, and to the extent
required by law, shall, in advance of any meeting of stockholders, appoint one or more inspectors to act at the meeting and make a written
report thereof. The corporation may designate one or more persons as an alternate inspector to replace any inspector who fails to act. If no
inspector or alternate is able to act at a meeting of stockholders, the person presiding at the meeting may, and to the extent required by law,
shall, appoint one or more inspectors to act at the meeting. Each inspector, before entering upon the discharge of his duties, shall take and sign
an oath to faithfully execute the duties of inspector with strict impartiality and according to the best of his ability.

      1.10 Notice of Stockholder Business . At an annual or special meeting of the stockholders, only such business shall be conducted as shall
have been properly brought before the meeting. To be properly brought before an annual meeting, business must be (i) specified in the notice of
meeting (or any supplement thereto) given by or at the direction of the Board of Directors, (ii) properly brought before the meeting by or at the
direction of the Board of Directors, or (iii) properly brought before an annual meeting by a stockholder. For business to be properly brought
before an annual meeting by a stockholder, it must be a proper matter for stockholder action under the Delaware General Corporation Law, and
the stockholder must have given timely notice thereof in writing to the Secretary of the corporation. To be timely, a stockholder proposal to be
presented at an annual meeting shall be received at the corporation’s principal executive offices not less than one hundred twenty (120)
calendar days in advance of the first anniversary of the date that the corporation’s (or the corporation’s predecessor’s) proxy statement was
released to stockholders in connection with the previous year’s annual meeting of stockholders, except that if no annual meeting was held in the
previous year or the date of the annual meeting is more than thirty (30) calendar days earlier than the date contemplated at the time of the
previous year’s proxy statement, notice by the stockholders to be timely must be received not later than the close of business on the 10th day
following the day on which the date of the annual meeting is publicly announced. ―Public announcement‖ for purposes hereof shall have the
meaning set forth in Article II, Section 2.15(c) of these Bylaws. In no event shall the public announcement at an adjournment or postponement
of an annual meeting commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described above.

      A stockholder’s notice to the Secretary of the corporation shall set forth as to each matter the stockholder proposes to bring before the
annual meeting (i) a brief description of the business desired to be brought before the annual meeting, (ii) the name and address of the
stockholder proposing such business and of the beneficial owner, if any, on whose behalf the business is being brought, (iii) the class and
number of shares of the corporation which are beneficially owned by the stockholder and such other beneficial owner, and (iv) any material
interest of the stockholder and such other beneficial owner in such business.

      1.11 Conduct of Business . At every meeting of the stockholders, the Chairman of the Board, or, in his or her absence, the President, or,
in his or her absence, such other person as may be appointed by the Board of Directors, shall act as Chairman. The Secretary of the corporation

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or a person designated by the Chairman of the meeting shall act as Secretary of the meeting. Unless otherwise approved by the Chairman of the
meeting, attendance at the stockholders’ meeting is restricted to stockholders of record, persons authorized in accordance with Section 1.8 of
these Bylaws to act by proxy, and officers of the corporation.

      The Chairman of the meeting shall call the meeting to order, establish the agenda, and conduct the business of the meeting in accordance
therewith or, at the Chairman’s discretion, it may be conducted otherwise in accordance with the wishes of the stockholders in attendance. The
date and time of the opening and closing of the polls for each matter upon which the stockholders will vote at the meeting shall be announced at
the meeting.

      The Chairman shall also conduct the meeting in an orderly manner, rule on the precedence of, and procedure on, motions and other
procedural matters, and exercise discretion with respect to such procedural matters with fairness and good faith toward all those entitled to take
part. The Chairman may impose reasonable limits on the amount of time taken up at the meeting on discussion in general or on remarks by any
one stockholder. Should any person in attendance become unruly or obstruct the meeting proceedings, the Chairman shall have the power to
have such person removed from participation. Notwithstanding anything in the Bylaws to the contrary, no business shall be conducted at a
meeting except in accordance with the procedures set forth in this Section 1.11 and Section 1.10 above. The Chairman of a meeting shall if the
facts warrant, determine and declare to the meeting that any proposed item of business was not brought before the meeting in accordance with
the provisions of this Section 1.11 and Section 1.10, and if he should so determine, he shall so declare to the meeting and any such business not
properly brought before the meeting shall not be transacted.

      1.12 Stockholder Action Without Meeting . Effective upon the date of the closing of the corporation’s initial public offering of its
common stock (the ―Effective Date‖), any action required or permitted to be taken by the stockholders of the corporation must be effected at a
duly called annual or special meeting of stockholders of the corporation and may not be effected by any consent in writing by such
stockholders. At all times prior to the Effective Date, any action which may be taken at any annual or special meeting of stockholders may be
taken without a meeting and without prior notice, if a consent in writing, setting forth the actions so taken, is signed by the holders of
outstanding shares having not less than the minimum number of votes which would be necessary to authorize or take such action at a meeting
at which all shares entitled to vote thereon were present and voted. All such consents shall be filed with the Secretary of the corporation and
shall be maintained in the corporate records. Prompt notice of the taking of a corporate action without a meeting by less than unanimous written
consent shall be given to those stockholders who have not consented in writing.

      An electronic transmission consenting to an action to be taken and transmitted by a stockholder, or by a proxy holder or other person
authorized to act for a stockholder, shall be deemed to be written, signed and dated for the purpose of this Section 1.12, provided that such
electronic transmission sets forth or is delivered with information from which the corporation can determine (i) that the electronic transmission
was transmitted by the stockholder or by a person authorized to act for the stockholder and (ii) the date on which such stockholder or
authorized person transmitted such electronic transmission. The date on which such electronic transmission is transmitted shall be deemed to be
the date on which such consent was signed. No consent given by

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electronic transmission shall be deemed to have been delivered until such consent is reproduced in paper form and until such paper form shall
be delivered to the corporation by delivery to its principal place of business or an officer or agent of the corporation having custody of the
books in which proceedings of meetings of stockholders are recorded.

     Any action required or permitted to be taken by the stockholders of the corporation must be effected at a duly called annual or special
meeting of stockholders of the corporation and may not be effected by any consent in writing by such stockholders.

       1.13 Meetings by Remote Communication . If authorized by the Board of Directors, and subject to such guidelines and procedures as the
Board may adopt, stockholders and proxy holders not physically present at a meeting of stockholders may, by means of remote communication,
participate in the meeting and be deemed present in person and vote at the meeting, whether such meeting is to be held at a designated place or
solely by means of remote communication, provided that (i) the corporation shall implement reasonable measures to verify that each person
deemed present and permitted to vote at the meeting by means of remote communication is a stockholder or proxy holder, (ii) the corporation
shall implement reasonable measures to provide such stockholders and proxy holders a reasonable opportunity to participate in the meeting and
to vote on matters submitted to the stockholders, including an opportunity to read or hear the proceedings of the meeting substantially
concurrently with such proceedings, and (iii) if any stockholder or proxy holder votes or takes other action at the meeting by means of remote
communication, the corporation shall maintain a record of such vote.

                                                                ARTICLE II
                                                            BOARD OF DIRECTORS

       2.1 General Powers . The business and affairs of the corporation shall be managed by or under the direction of a Board of Directors, who
may exercise all of the powers of the corporation except as otherwise provided by law or the Certificate of Incorporation. In the event of a
vacancy in the Board of Directors, the remaining directors, except as otherwise provided by law, may exercise the powers of the full Board
until the vacancy is filled.

      2.2 Number and Term of Office . The number of directors shall initially be seven (7) and, thereafter, shall be fixed from time to time
exclusively by the Board of Directors pursuant to a resolution adopted by a majority of the total number of authorized directors (whether or not
there exist any vacancies in previously authorized directorships at the time any such resolution is presented to the Board for adoption).
Effective upon the Effective Date, the directors shall be divided into three classes, with the term of office of the first class to expire at the first
annual meeting of stockholders held after the Effective Date; the term of office of the second class to expire at the second annual meeting of
stockholders held after the Effective Date; the term of office of the third class to expire at the third annual meeting of stockholders held after
the Effective Date; and thereafter for each such term to expire at each third succeeding annual meeting of stockholders after such election. All
directors shall hold office until the expiration of the term for which elected and until their respective successors are elected, except in the case
of the death, resignation or removal of any director.

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       2.3 Vacancies and Newly Created Directorships . Subject to the rights of the holders of any series of Preferred Stock then outstanding,
newly created directorships resulting from any increase in the authorized number of directors or any vacancies in the Board of Directors
resulting from death, resignation, retirement, disqualification or other cause (including removal from office by a vote of the stockholders) may
be filled only by a majority vote of the directors then in office, though less than a quorum, or by the sole remaining director, and directors so
chosen shall hold office for a term expiring at the next annual meeting of stockholders at which the term of office of the class to which they
have been elected expires. No decrease in the number of directors constituting the Board of Directors shall shorten the term of any incumbent
director.

     2.4 Resignation . Any director may resign by delivering notice in writing or by electronic transmission to the President, Chairman of the
Board or Secretary. Such resignation shall be effective upon receipt unless it is specified to be effective at some other time or upon the
happening of some other event.

      2.5 Removal . Subject to the rights of the holders of any series of Preferred Stock then outstanding, any directors, or the entire Board of
Directors, may be removed from office at any time, but only for cause, by the affirmative vote of the holders of sixty six and two-thirds percent
(66-2/3%) of the voting power of all of the outstanding shares of capital stock entitled to vote generally in the election of directors, voting
together as a single class. Vacancies in the Board of Directors resulting from such removal may be filled by a majority of the directors then in
office, though less than a quorum, or by the sole remaining director. Directors so chosen shall hold office until the next annual meeting of
stockholders at which the term of office of the class to which they have been elected expires.

      2.6 Regular Meetings . Regular meetings of the Board of Directors may be held without notice at such time and place, either within or
without the State of Delaware, as shall be determined from time to time by the Board of Directors; provided that any director who is absent
when such a determination is made shall be given notice of the determination. A regular meeting of the Board of Directors may be held without
notice immediately after and at the same place as the annual meeting of stockholders.

     2.7 Special Meetings . Special meetings of the Board of Directors may be called by the Chairman of the Board, the President or two or
more directors and may be held at any time and place, within or without the State of Delaware.

      2.8 Notice of Special Meetings . Notice of any special meeting of directors shall be given to each director by the Secretary or by the
officer or one of the directors calling the meeting. Notice shall be duly given to each director by (i) giving notice to such director in person or
by telephone, electronic transmission or voice message system at least 24 hours in advance of the meeting, (ii) sending a facsimile, or
delivering written notice by hand, to his last known business or home address at least 24 hours in advance of the meeting, or (iii) mailing
written notice to his last known business or home address at least three (3) days in advance of the meeting. A notice or waiver of notice of a
meeting of the Board of Directors need not specify the purposes of the meeting. Unless otherwise indicated in the notice thereof, any and all
business may be transacted at a special meeting.

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      2.9 Participation in Meetings by Telephone Conference Calls or Other Methods of Communication . Directors or any members of any
committee designated by the directors may participate in a meeting of the Board of Directors or such committee by means of conference
telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and participation
by such means shall constitute presence in person at such meeting.

      2.10 Quorum . A majority of the total number of authorized directors shall constitute a quorum at any meeting of the Board of Directors.
In the event one or more of the directors shall be disqualified to vote at any meeting, then the required quorum shall be reduced by one for each
such director so disqualified; provided, however, that in no case shall less than 1/3 of the number so fixed constitute a quorum. In the absence
of a quorum at any such meeting, a majority of the directors present may adjourn the meeting from time to time without further notice other
than announcement at the meeting, until a quorum shall be present. Interested directors may be counted in determining the presence of a
quorum at a meeting of the Board of Directors or at a meeting of a committee which authorizes a particular contract or transaction.

      2.11 Action at Meeting . At any meeting of the Board of Directors at which a quorum is present, the vote of a majority of those present
shall be sufficient to take any action, unless a different vote is specified by law, the Certificate of Incorporation or these Bylaws.

      2.12 Action by Written Consent . Any action required or permitted to be taken at any meeting of the Board of Directors or of any
committee of the Board of Directors may be taken without a meeting if all members of the Board or committee, as the case may be, consent to
the action in writing or by electronic transmission, and the writings or electronic transmissions are filed with the minutes of proceedings of the
Board or committee. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the
minutes are maintained in electronic form.

      2.13 Committees . The Board of Directors may designate one or more committees, each committee to consist of one or more of the
directors of the corporation, with such lawfully delegated powers and duties as it therefor confers, to serve at the pleasure of the Board. The
Board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any
meeting of the committee. In the absence or disqualification of a member of a committee, the member or members of the committee present at
any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the
Board of Directors to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent provided in
the resolution of the Board of Directors and subject to the provisions of the Delaware General Corporation Law, shall have and may exercise all
the powers and authority of the Board of Directors in the management of the business and affairs of the corporation and may authorize the seal
of the corporation to be affixed to all papers which may require it. Each such committee shall keep minutes and make such reports as the Board
of Directors may from time to time request. Except as the Board of Directors may otherwise determine, any committee may make rules for the
conduct of its business, but unless otherwise provided by such rules, its business shall be conducted as nearly as possible in the same manner as
is provided in these Bylaws for the Board of Directors.

                                                                         7
      2.14 Compensation of Directors . Directors may be paid such compensation for their services and such reimbursement for expenses of
attendance at meetings as the Board of Directors may from time to time determine. No such payment shall preclude any director from serving
the corporation or any of its parent or subsidiary corporations in any other capacity and receiving compensation for such service.

     2.15 Nomination of Director Candidates .

            (a) Subject to the rights of holders of any class or series of Preferred Stock then outstanding, nominations for the election of
     Directors at an annual meeting may be made by (i) the Board of Directors or a duly authorized committee thereof or (ii) any stockholder
     entitled to vote in the election of Directors generally who complies with the procedures set forth in this Bylaw and who is a stockholder
     of record at the time notice is delivered to the Secretary of the corporation. Any stockholder entitled to vote in the election of Directors
     generally may nominate one or more persons for election as Directors at an annual meeting only if timely notice of such stockholder’s
     intent to make such nomination or nominations has been given in writing to the Secretary of the corporation. To be timely, a stockholder
     nomination for a director to be elected at an annual meeting shall be received at the corporation’s principal executive offices not less than
     one hundred twenty (120) calendar days in advance of the first anniversary of the date that the corporation’s (or the corporation’s
     predecessor’s) proxy statement was released to stockholders in connection with the previous year’s annual meeting of stockholders,
     except that if no annual meeting was held in the previous year or the date of the annual meeting has been advanced by more than thirty
     (30) calendar days from the date contemplated at the time of the previous year’s proxy statement, notice by the stockholders to be timely
     must be received not later than the close of business on the tenth day following the day on which public announcement of the date of such
     meeting is first made. Each such notice shall set forth: (i) the name and address of the stockholder who intends to make the nomination,
     of the beneficial owner, if any, on whose behalf the nomination is being made and of the person or persons to be nominated; (ii) a
     representation that the stockholder is a holder of record of stock of the corporation entitled to vote for the election of Directors on the date
     of such notice and intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice; (iii) a
     description of all arrangements or understandings between the stockholder or such beneficial owner and each nominee and any other
     person or persons (naming such person or persons) pursuant to which the nomination or nominations are to be made by the stockholder;
     (iv) such other information regarding each nominee proposed by such stockholder as would be required to be included in a proxy
     statement filed pursuant to the proxy rules of the Securities and Exchange Commission, had the nominee been nominated, or intended to
     be nominated, by the Board of Directors; and (v) the consent of each nominee to serve as a director of the corporation if so elected. In no
     event shall the public announcement of an adjournment or postponement of an annual meeting commence a new time period (or extend
     any time period) for the giving of a stockholder’s notice as described above. Notwithstanding the third sentence of this Section 2.15(a), in
     the event that the number of Directors to be elected at an annual meeting is increased and there is no public announcement by the
     corporation naming the nominees for the additional directorships at least one hundred thirty (130) days prior to the first anniversary of the
     date that the corporation’s (or its predecessor’s) proxy statement was released to stockholders in connection with the previous year’s
     annual meeting, a stockholder’s notice required by this Section 2.15(a) shall also be considered timely, but only with respect to nominees
     for the

                                                                         8
additional directorships, if it shall be delivered to the Secretary at the principal executive offices of the corporation not later than the close
of business on the 10th day following the day on which such public announcement is first made by the corporation.

       (b) Nominations of persons for election to the Board of Directors may be made at a special meeting of stockholders at which
directors are to be elected pursuant to the corporation’s notice of meeting by (i) or at the direction of the Board of Directors or a
committee thereof or (ii) any stockholder of the corporation who is entitled to vote at the meeting, who complies with the notice
procedures set forth in this Bylaw and who is a stockholder of record at the time such notice is delivered to the Secretary of the
corporation. In the event the corporation calls a special meeting of stockholders for the purpose of electing one or more directors to the
Board of Directors, any such stockholder may nominate a person or persons (as the case may be), for election to such position(s) as are
specified in the corporation’s notice of meeting, if the stockholder’s notice as required by paragraph (a) of this Bylaw shall be delivered
to the Secretary at the principal executive offices of the corporation not earlier than the 90th day prior to such special meeting and not
later than the close of business on the later of the 70th day prior to such special meeting or the 10th day following the day on which
public announcement is first made of the date of the special meeting and of the nominees proposed by the Board of Directors to be
elected at such meeting. In no event shall the public announcement of an adjournment or postponement of a special meeting commence a
new time period (or extend any time period) for the giving of a stockholder’s notice as described above.

     (c) For purposes of these Bylaws, ―public announcement‖ shall mean disclosure in a press release reported by the Dow Jones News
Service, Associated Press or comparable national news service or in a document publicly filed by the corporation with the Securities and
Exchange Commission pursuant to Section 13, 14 or 15(d) of the Securities Exchange Act of 1934 (the ―Exchange Act‖).

     (d) Notwithstanding the foregoing provisions of this Bylaw, a stockholder shall also comply with all applicable requirements of the
Exchange Act and the rules and regulations thereunder with respect to the matters set forth in this Bylaw. Nothing in this Bylaw shall be
deemed to affect any rights of stockholders to request inclusion of proposals in the Corporation’s proxy statement pursuant to Rule 14a-8
under the Exchange Act.

     (e) Only persons nominated in accordance with the procedures set forth in this Section 2.15 shall be eligible to serve as directors.
Except as otherwise provided by law, the Chairman of the meeting shall have the power and duty (a) to determine whether a nomination
was made in accordance with the procedures set forth in this Section 2.15 and (b) if any proposed nomination was not made in
compliance with this Section 2.15, to declare that such nomination shall be disregarded.

     (f) If the Chairman of the meeting for the election of Directors determines that a nomination of any candidate for election as a
Director at such meeting was not made in accordance with the applicable provisions of this Section 2.15, such nomination shall be void;
provided, however, that nothing in this Section 2.15 shall be deemed to limit any voting rights upon the occurrence of dividend arrearages
provided to holders of Preferred Stock pursuant to the Preferred Stock designation for any series of Preferred Stock.

                                                                     9
                                                                    ARTICLE III
                                                                     OFFICERS

     3.1 Enumeration . The officers of the corporation shall consist of a Chief Executive Officer, a President, a Secretary, a Chief Financial
Officer, a Treasurer and such other officers with such other titles as the Board of Directors shall determine, including, at the discretion of the
Board of Directors, a Chairman of the Board and one or more Vice Presidents and Assistant Secretaries. The Board of Directors may appoint
such other officers as it may deem appropriate.

     3.2 Election . Officers shall be elected annually by the Board of Directors at its first meeting following the annual meeting of
stockholders. Officers may be appointed by the Board of Directors at any other meeting.

      3.3 Qualification . No officer need be a stockholder. Any two or more offices may be held by the same person.

      3.4 Tenure . Except as otherwise provided by law, by the Certificate of Incorporation or by these Bylaws, each officer shall hold office
until his successor is elected and qualified, unless a different term is specified in the vote appointing him, or until his earlier death, resignation
or removal.

      3.5 Resignation and Removal . Any officer may resign by delivering his written resignation to the corporation at its principal office or to
the President or Secretary. Such resignation shall be effective upon receipt unless it is specified to be effective at some other time or upon the
happening of some other event. Any officer elected by the Board of Directors may be removed at any time, with or without cause, by the Board
of Directors.

      3.6 Chairman of the Board . The Board of Directors may appoint a Chairman of the Board. If the Board of Directors appoints a Chairman
of the Board, he shall perform such duties and possess such powers as are assigned to him by the Board of Directors. Unless otherwise
provided by the Board of Directors, he shall preside at all meetings of the stockholders, and, if he is a director, at all meetings of the Board of
Directors.

      3.7 President . The President shall, subject to the direction of the Board of Directors, have responsibility for the general management and
control of the business and affairs of the corporation and shall perform all duties and have all powers which are commonly incident to the office
of President or which are delegated to him or her by the Board of Directors. Unless otherwise designated by the Board of Directors, the
President shall be the Chief Executive Officer of the corporation. The President shall, in the Chairman of the Board’s absence or because of the
Chairman of the Board’s inability to act, perform all duties of the Chairman of the Board and preside at all meetings of the Board of Directors
and of stockholders. The President shall perform such other duties and shall have such other powers as the Board of Directors may from time to
time prescribe. He or she shall have power to sign stock certificates, contracts and other instruments of the corporation which are authorized
and shall have general supervision and direction of all of the other officers, employees and agents of the corporation, other than the Chairman
of the Board.

                                                                          10
      3.8 Vice Presidents . Any Vice President shall perform such duties and possess such powers as the Board of Directors or the President
may from time to time prescribe. In the event of the absence, inability or refusal to act of the President, the Vice President (or if there shall be
more than one, the Vice Presidents in the order determined by the Board of Directors) shall perform the duties of the President and when so
performing shall have all the powers of and be subject to all the restrictions upon the President. The Board of Directors may assign to any Vice
President the title of Executive Vice President, Senior Vice President or any other title selected by the Board of Directors.

      3.9 Secretary and Assistant Secretaries . The Secretary shall perform such duties and shall have such powers as the Board of Directors or
the President may from time to time prescribe. In addition, the Secretary shall perform such duties and have such powers as are incident to the
office of the Secretary, including, without limitation, the duty and power to give notices of all meetings of stockholders and special meetings of
the Board of Directors, to keep a record of the proceedings of all meetings of stockholders and the Board of Directors, to maintain a stock
ledger and prepare lists of stockholders and their addresses as required, to be custodian of corporate records and the corporate seal and to affix
and attest to the same on documents.

      Any Assistant Secretary shall perform such duties and possess such powers as the Board of Directors, the Chief Executive Officer, the
President or the Secretary may from time to time prescribe. In the event of the absence, inability or refusal to act of the Secretary, the Assistant
Secretary (or if there shall be more than one, the Assistant Secretaries in the order determined by the Board of Directors) shall perform the
duties and exercise the powers of the Secretary.

      In the absence of the Secretary or any Assistant Secretary at any meeting of stockholders or directors, the person presiding at the meeting
shall designate a temporary secretary to keep a record of the meeting.

      3.10 Chief Financial Officer . Unless otherwise designated by the Board of Directors, the Chief Financial Officer shall be the Treasurer.
The Chief Financial Officer shall perform such duties and shall have such powers as may from time to time be assigned to him by the Board of
Directors, the Chief Executive Officer or the President. In addition, the Chief Financial Officer shall perform such duties and have such powers
as are incident to the office of chief financial officer, including without limitation, the duty and power to keep and be responsible for all funds
and securities of the corporation, to maintain the financial records of the corporation, to deposit funds of the corporation in depositories as
authorized, to disburse such funds as authorized, to make proper accounts of such funds, and to render as required by the Board of Directors
accounts of all such transactions and of the financial condition of the corporation.

     3.11 Salaries . Officers of the corporation shall be entitled to such salaries, compensation or reimbursement as shall be fixed or allowed
from time to time by the Board of Directors.

      3.12 Delegation of Authority . The Board of Directors may from time to time delegate the powers or duties of any officer to any other
officers or agents, notwithstanding any provision hereof.

                                                                         11
                                                                   ARTICLE IV
                                                                 CAPITAL STOCK

      4.1 Issuance of Stock . Unless otherwise voted by the stockholders and subject to the provisions of the Certificate of Incorporation, the
whole or any part of any unissued balance of the authorized capital stock of the corporation or the whole or any part of any unissued balance of
the authorized capital stock of the corporation held in its treasury may be issued, sold, transferred or otherwise disposed of by vote of the Board
of Directors in such manner, for such consideration and on such terms as the Board of Directors may determine.

       4.2 Certificates of Stock . Every holder of stock of the corporation shall be entitled to have a certificate, in such form as may be
prescribed by law and by the Board of Directors, certifying the number and class of shares owned by him in the corporation. Each such
certificate shall be signed by, or in the name of the corporation by, the Chairman or Vice Chairman, if any, of the Board of Directors, or the
President or a Vice President, and the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary of the corporation. Any or
all of the signatures on the certificate may be a facsimile.

     Each certificate for shares of stock which are subject to any restriction on transfer pursuant to the Certificate of Incorporation, the
Bylaws, applicable securities laws or any agreement among any number of shareholders or among such holders and the corporation shall have
conspicuously noted on the face or back of the certificate either the full text of the restriction or a statement of the existence of such restriction.

      4.3 Transfers . Except as otherwise established by rules and regulations adopted by the Board of Directors, and subject to applicable law,
shares of stock may be transferred on the books of the corporation by the surrender to the corporation or its transfer agent of the certificate
representing such shares properly endorsed or accompanied by a written assignment or power of attorney properly executed, and with such
proof of authority or authenticity of signature as the corporation or its transfer agent may reasonably require. Except as may be otherwise
required by law, the Certificate of Incorporation or the Bylaws, the corporation shall be entitled to treat the record holder of stock as shown on
its books as the owner of such stock for all purposes, including the payment of dividends and the right to vote with respect to such stock,
regardless of any transfer, pledge or other disposition of such stock until the shares have been transferred on the books of the corporation in
accordance with the requirements of these Bylaws.

       4.4 Lost, Stolen or Destroyed Certificates . The corporation may issue a new certificate of stock in place of any previously issued
certificate alleged to have been lost, stolen, or destroyed, upon such terms and conditions as the Board of Directors may prescribe, including the
presentation of reasonable evidence of such loss, theft or destruction and the giving of such indemnity as the Board of Directors may require for
the protection of the corporation or any transfer agent or registrar.

      4.5 Record Date . The Board of Directors may fix in advance a record date for the determination of the stockholders entitled to notice of
or to vote at any meeting of stockholders or to express consent (or dissent) to corporate action in writing without a meeting, or entitled to

                                                                          12
receive payment of any dividend or other distribution or allotment of any rights in respect of any change, concession or exchange of stock, or
for the purpose of any other lawful action. Such record date shall not be more than sixty (60) nor less than ten (10) days before the date of such
meeting, nor more than sixty (60) days prior to any other action to which such record date relates.

      If no record date is fixed, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be
at the close of business on the day before the day on which notice is given, or, if notice is waived, at the close of business on the day before the
day on which the meeting is held. The record date for determining stockholders entitled to express consent to corporate action in writing
without a meeting when no prior action by the Board of Directors is necessary, shall be the day on which the first written consent is expressed.
The record date for determining stockholders for any other purpose shall be at the close of business on the day on which the Board of Directors
adopts the resolution relating to such purpose.

     A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of
the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.

                                                               ARTICLE V
                                                           GENERAL PROVISIONS

     5.1 Fiscal Year . The fiscal year of the corporation shall be as fixed by the Board of Directors.

     5.2 Corporate Seal . The corporate seal shall be in such form as shall be approved by the Board of Directors.

      5.3 Waiver of Notice . Whenever any notice whatsoever is required to be given by law, by the Certificate of Incorporation or by these
Bylaws, a waiver of such notice either in writing signed by the person entitled to such notice or such person’s duly authorized attorney, or by
electronic transmission or any other method permitted under the Delaware General Corporation Law, whether before, at or after the time stated
in such waiver, or the appearance of such person or persons at such meeting in person or by proxy, shall be deemed equivalent to such notice.

      5.4 Actions with Respect to Securities of Other Corporations . Except as the Board of Directors may otherwise designate, the Chief
Executive Officer or President or any officer of the corporation authorized by the Chief Executive Officer or President shall have the power to
vote and otherwise act on behalf of the corporation, in person or proxy, and may waive notice of, and act as, or appoint any person or persons
to act as, proxy or attorney-in-fact to this corporation (with or without power of substitution) at any meeting of stockholders or shareholders (or
with respect to any action of stockholders) of any other corporation or organization, the securities of which may be held by this corporation and
otherwise to exercise any and all rights and powers

                                                                         13
which this corporation may possess by reason of this corporation’s ownership of securities in such other corporation or other organization.

      5.5 Evidence of Authority . A certificate by the Secretary, or an Assistant Secretary, or a temporary Secretary, as to any action taken by
the stockholders, directors, a committee or any officer or representative of the corporation shall as to all persons who rely on the certificate in
good faith be conclusive evidence of such action.

      5.6 Certificate of Incorporation . All references in these Bylaws to the Certificate of Incorporation shall be deemed to refer to the
Certificate of Incorporation of the corporation, as amended and in effect from time to time.

      5.7 Severability . Any determination that any provision of these Bylaws is for any reason inapplicable, illegal or ineffective shall not
affect or invalidate any other provision of these Bylaws.

      5.8 Pronouns . All pronouns used in these Bylaws shall be deemed to refer to the masculine, feminine or neuter, singular or plural, as the
identity of the person or persons may require.

      5.9 Notices . Except as otherwise specifically provided herein or required by law, all notices required to be given to any stockholder,
director, officer, employee or agent shall be in writing and may in every instance be effectively given by hand delivery to the recipient thereof,
by depositing such notice in the mails, postage paid, or by sending such notice by facsimile or other electronic transmission in the manner
provided in Section 232 of the Delaware General Corporation Law, or by commercial courier service. Any such notice shall be addressed to
such stockholder, director, officer, employee or agent at his or her last known address as the same appears on the books of the corporation. The
time when such notice shall be deemed to be given shall be the time such notice is received by such stockholder, director, officer, employee or
agent, or by any person accepting such notice on behalf of such person, if delivered by hand, facsimile, other electronic transmission or
commercial courier service, or the time such notice is dispatched, if delivered through the mails.

      5.10 Reliance Upon Books, Reports and Records . Each director, each member of any committee designated by the Board of Directors,
and each officer of the corporation shall, in the performance of his duties, be fully protected in relying in good faith upon the books of account
or other records of the corporation, including reports made to the corporation by any of its officers, by an independent certified public
accountant, or by an appraiser selected with reasonable care.

      5.11 Time Periods . In applying any provision of these Bylaws which require that an act be done or not done a specified number of days
prior to an event or that an act be done during a period of a specified number of days prior to an event, calendar days shall be used, the day of
the doing of the act shall be excluded, and the day of the event shall be included.

      5.12 Facsimile Signatures . In addition to the provisions for use of facsimile signatures elsewhere specifically authorized in these Bylaws,
facsimile signatures of any officer or officers

                                                                         14
of the corporation may be used whenever and as authorized by the Board of Directors or a committee thereof.

                                                                  ARTICLE VI
                                                                 AMENDMENTS

     6.1 By the Board of Directors . Except as is otherwise set forth in these Bylaws, these Bylaws may be altered, amended or repealed or
new Bylaws may be adopted by the affirmative vote of a majority of the directors present at any regular or special meeting of the Board of
Directors at which a quorum is present.

      6.2 By the Stockholders . Except as otherwise set forth in these Bylaws, these Bylaws may be altered, amended or repealed or new
Bylaws may be adopted by the affirmative vote of the holders of at least sixty six and two-thirds percent (66-2/3%) of the shares of the capital
stock of the corporation issued and outstanding and entitled to vote at any annual meeting of stockholders, or at any special meeting of
stockholders, provided notice of such alteration, amendment, repeal or adoption of new Bylaws shall have been stated in the notice of such
special meeting.

                                                         ARTICLE VII
                                          INDEMNIFICATION OF DIRECTORS AND OFFICERS

       7.1 Right to Indemnification . Each person who was or is made a party or is threatened to be made a party to or is involved in any action,
suit or proceeding, whether civil, criminal, administrative or investigative (―proceeding‖), by reason of the fact that he or she or a person of
whom he or she is the legal representative, is or was a director or officer of the corporation or is or was serving at the request of the corporation
as a director or officer of another corporation, or as a controlling person of a partnership, joint venture, trust or other enterprise, including
service with respect to employee benefit plans, whether the basis of such proceeding is alleged action in an official capacity as a director or
officer, or in any other capacity while serving as a director or officer, shall be indemnified and held harmless by the corporation to the fullest
extent authorized by the Delaware General Corporation Law, as the same exists or may hereafter be amended (but, in the case of any such
amendment, only to the extent that such amendment permits the corporation to provide broader indemnification rights than said Law permitted
the corporation to provide prior to such amendment) against all expenses, liability and loss reasonably incurred or suffered by such person in
connection therewith and such indemnification shall continue as to a person who has ceased to be a director or officer and shall inure to the
benefit of his or her heirs, executors and administrators; provided , however , that except as provided in Section 7.2 of this Article VII, the
corporation shall indemnify any such person seeking indemnity in connection with a proceeding (or part thereof) initiated by such person only
if (a) such indemnification is expressly required to be made by law, (b) the proceeding (or part thereof) was authorized by the Board of
Directors of the corporation, (c) such indemnification is provided by the corporation, in its sole discretion, pursuant to the powers vested in the
corporation under the Delaware General Corporation Law,

                                                                         15
or (d) the proceeding (or part thereof) is brought to establish or enforce a right to indemnification under an indemnity agreement or any other
statute or law or otherwise as required under Section 145 of the Delaware General Corporation Law. The rights hereunder shall be contract
rights and shall include the right to be paid expenses incurred in defending any such proceeding in advance of its final disposition; provided ,
however , that, unless the Delaware General Corporation Law then so prohibits, the payment of such expenses incurred by a director or officer
of the corporation in his or her capacity as a director or officer (and not in any other capacity in which service was or is tendered by such
person while a director or officer, including, without limitation, service to an employee benefit plan) in advance of the final disposition of such
proceeding, shall be made only upon delivery to the corporation of an undertaking, by or on behalf of such director or officer, to repay all
amounts so advanced if it should be determined ultimately that such director or officer is not entitled to be indemnified under this Section or
otherwise.

      7.2 Right of Claimant to Bring Suit . If a claim under Section 7.1 is not paid in full by the corporation within ninety (90) days after a
written claim has been received by the corporation, the claimant may at any time thereafter bring suit against the corporation to recover the
unpaid amount of the claim and, if such suit is not frivolous or brought in bad faith, the claimant shall be entitled to be paid also the expense of
prosecuting such claim. It shall be a defense to any such action (other than an action brought to enforce a claim for expenses incurred in
defending any proceeding in advance of its final disposition where the required undertaking, if any, has been tendered to this corporation) that
the claimant has not met the standards of conduct which make it permissible under the Delaware General Corporation Law for the corporation
to indemnify the claimant for the amount claimed. Neither the failure of the corporation (including its Board of Directors, independent legal
counsel, or its stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is
proper in the circumstances because he or she has met the applicable standard of conduct set forth in the Delaware General Corporation Law,
nor an actual determination by the corporation (including its Board of Directors, independent legal counsel or its stockholders) that the claimant
has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that claimant has not met the
applicable standard of conduct.

      7.3 Indemnification of Employees and Agents . The corporation may, to the extent authorized from time to time by the Board of
Directors, grant rights to indemnification, and to the advancement of related expenses, to any employee or agent of the corporation to the fullest
extent of the provisions of this Article with respect to the indemnification of and advancement of expenses to directors and officers of the
corporation.

     7.4 Non-Exclusivity of Rights . The rights conferred on any person in Sections 7.1 and 7.2 shall not be exclusive of any other right which
such persons may have or hereafter acquire under any statute, provision of the Certificate of Incorporation, bylaw, agreement, vote of
stockholders or disinterested directors or otherwise.

      7.5 Indemnification Contracts . The Board of Directors is authorized to enter into a contract with any director, officer, employee or agent
of the corporation, or any person serving at the request of the corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, including employee benefit plans, providing

                                                                        16
for indemnification rights equivalent to or, if the Board of Directors so determines, greater than, those provided for in this Article VII.

      7.6 Insurance . The corporation shall maintain insurance to the extent reasonably available, at its expense, to protect itself and any such
director, officer, employee or agent of the corporation or another corporation, partnership, joint venture, trust or other enterprise against any
such expense, liability or loss, whether or not the corporation would have the power to indemnify such person against such expense, liability or
loss under the Delaware General Corporation Law.

      7.7 Effect of Amendment . Any amendment, repeal or modification of any provision of this Article VII by the stockholders and the
directors of the corporation shall not adversely affect any right or protection of a director or officer of the corporation existing at the time of
such amendment, repeal or modification.

                                                                          17
                                                                                                                                      Exhibit 4.2

                         COMMON STOCK                                                                COMMON STOCK

                            PAR VALUE $ .001                                                THIS CERTIFICATE IS TRANSFERABLE IN
                                                                                          NEW YORK, NEW YORK OR CHICAGO, ILLINOIS
                                                              salesforce.com ®
           Certificate                                                                                                          Shares
            Number                                                                                              * * <<Number of Shares>> * * *
                                                                                                                                            ***
                                                                                                                * * * <<Number of Shares>> * *
                                                                                                                                            ***
                                                                                                                * * * * <<Number of Shares>> *
                                                                                                                                            ***
                                                                                                                * * * * * <<Number of Shares>>
                                                                                                                                            ***
                                                                                                                         * * * * * * <<Number of
                                                                                                                                     Shares>> * *


                                                     salesforce.com, inc.
                                   INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE

          THIS CERTIFIES THAT                                    <<Name of Holder>>                             CUSIP 79466L 30 2
                                                                                                        SEE REVERSE FOR CERTAIN DEFINITIONS




                 is the owner of                             ***<<Number of Shares>>***




      FULLY-PAID AND NON-ASSESSABLE SHARES OF THE COMMON STOCK OF salesforce.com, inc. (hereinafter called the
―Company‖) , transferable on the books of the Company in person or by duly authorized attorney, upon surrender of this Certificate properly
endorsed. This Certificate and the shares represented hereby, are issued and shall be held subject to all of the provisions of the Certificate of
Incorporation, as amended, and the By-Laws, as amended, of the Company (copies of which are on file with the Company and with the
Transfer Agent), to all of which each holder, by acceptance hereof, assents. This Certificate is not valid unless countersigned and registered by
the Transfer Agent and Registrar.

     Witness the facsimile seal of the Company and the facsimile signatures of its duly authorized officers.

                                                                                                      DATED <<Month Day, Year>>

                                                                                                      COUNTERSIGNED AND
                                                                                                      REGISTERED:
                                                                                                      COMPUTERSHARE INVESTOR
                                                                                                      SERVICES, LLC.
                                                                                                      (CHICAGO)
            /s/ Marc Benioff                                                                          TRANSFER AGENT AND
          Chief Executive Officer                                                                     REGISTRAR,



           /s/   David Schellhase
                  Secretary                                                                      B
                                                                                                 y
                                                                                                                AUTHORIZED SIGNATURE
The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they were written out in
full according to applicable laws or regulations:

TEN COM—as tenants in common                      UNIF GIFT MIN ACT- . . . . . . . . .Custodian . . . . . . . . . . . . . . .
                                                                        (Cust)                             (Minor)
TEN ENT— as tenants by the entireties                                 under Uniform Gifts to Minors Act . . . . . . . . . . . . .
                                                                                                                              (State)
JT TEN—      as joint tenants with right          UNIF TRF MIN ACT . . . . . . . . . . . . . . .Custodian (until age. . . ). . . . . . . . . . .
of               survivorship and not                                   (Cust)                                                      (Minor)
as               tenants in common                                    under Uniform Transfers to Minors Act. . . . . . . . . .
                                                                                                                                (State)
              Additional abbreviations may also be used though not in the above
       list.


SALESFORCE.COM, INC.

THE COMPANY WILL FURNISH WITHOUT CHARGE TO EACH SHAREHOLDER WHO SO REQUESTS, A SUMMARY OF THE
POWERS, DESIGNATIONS, PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS OF
EACH CLASS OF STOCK OF THE COMPANY AND THE QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS OF SUCH
PREFERENCES AND RIGHTS, AND THE VARIATIONS IN RIGHTS, PREFERENCES AND LIMITATIONS DETERMINED FOR
EACH SERIES, WHICH ARE FIXED BY THE CERTIFICATE OF INCORPORATION OF THE COMPANY, AS AMENDED, AND THE
RESOLUTIONS OF THE BOARD OF DIRECTORS OF THE COMPANY, AND THE AUTHORITY OF THE BOARD OF DIRECTORS
TO DETERMINE VARIATIONS FOR FUTURE SERIES. SUCH REQUEST MAY BE MADE TO THE OFFICE OF THE SECRETARY
OF THE COMPANY OR TO THE TRANSFER AGENT. THE BOARD OF DIRECTORS MAY REQUIRE THE OWNER OF A LOST OR
DESTROYED STOCK CERTIFICATE, OR HIS LEGAL REPRESENTATIVES, TO GIVE THE COMPANY A BOND TO INDEMNIFY IT
AND ITS TRANSFER AGENTS AND REGISTRARS AGAINST ANY CLAIM THAT MAY BE MADE AGAINST THEM ON ACCOUNT
OF THE ALLEGED LOSS OR DESTRUCTION OF ANY SUCH CERTIFICATE.

For value received,                               hereby sell, assign and transfer unto

PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE



(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE, OF ASSIGNEE)




                                                                                                                                                              Sh
ares
of the capital stock represented by the within Certificate, and do hereby irrevocably constitute and appoint

                                                                                                                                                   Attorney
to transfer the said stock on the books of the within-named Corporation with full power of substitution in the premises.


Dated:                                  20                                       Signature:

Signature(s) Guaranteed:                                                         Signature:
                                                                                        Notice: THE SIGNATURE TO THIS
BY:                                                                              ASSIGNMENT                  MUST CORRESPOND WITH
THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN                                      THE NAME                  AS WRITTEN UPON THE FACE
ELIGIBLE GUARANTOR INSTITUTION (Banks,                                           OF THE                 CERTIFICATE, IN EVERY
Stockbrokers, Savings and Loan Associations and Credit                           PARTICULAR,                  WITHOUT ALTERATION
Unions) WITH MEMBERSHIP IN AN APPROVED SIGNATURE   OR       ENLARGEMENT, OR ANY
MEDALLION PROGRAM, PURSUANT TO                     CHANGE       WHATEVER.
S.E.C RULE 17Ad-15.

SECURITY INSTRUCTIONS
THIS IS WATERMARKED PAPER, DO NOT ACCEPT
WITHOUT NOTING WATERMARK HOLD TO LIGHT TO
VERIFY WATERMARK.
                                                                                                                                         Exhibit 10.1

                                                           INDEMNITY AGREEMENT

      This Indemnity Agreement, dated as of                        , 2004, is made by and between salesforce.com, inc., a Delaware corporation
(the ― Company ‖), and                (the ― Indemnitee ‖).

                                                                     RECITALS

      A. The Company is aware that competent and experienced persons are increasingly reluctant to serve as directors, officers or agents of
corporations unless they are protected by comprehensive liability insurance and indemnification, due to increased exposure to litigation costs
and risks resulting from their service to such corporations, and due to the fact that the exposure frequently bears no reasonable relationship to
the compensation of such directors, officers and other agents.

      B. The statutes and judicial decisions regarding the duties of directors and officers are often difficult to apply, ambiguous, or conflicting,
and therefore fail to provide such directors, officers and agents with adequate, reliable knowledge of legal risks to which they are exposed or
information regarding the proper course of action to take.

     C. Plaintiffs often seek damages in such large amounts and the costs of litigation may be so enormous (whether or not the case is
meritorious), that the defense and/or settlement of such litigation is often beyond the personal resources of directors, officers and other agents.

      D. The Company believes that it is unfair for its directors, officers and agents and the directors, officers and agents of its subsidiaries to
assume the risk of huge judgments and other expenses which may occur in cases in which the director, officer or agent received no personal
profit and in cases where the director, officer or agent was not culpable.

       E. The Company recognizes that the issues in controversy in litigation against a director, officer or agent of a corporation such as the
Company or its subsidiaries are often related to the knowledge, motives and intent of such director, officer or agent, that he is usually the only
witness with knowledge of the essential facts and exculpating circumstances regarding such matters, and that the long period of time which
usually elapses before the trial or other disposition of such litigation often extends beyond the time that the director, officer or agent can
reasonably recall such matters; and may extend beyond the normal time for retirement for such director, officer or agent with the result that he,
after retirement or in the event of his death, his spouse, heirs, executors or administrators, may be faced with limited ability and undue hardship
in maintaining an adequate defense, which may discourage such a director, officer or agent from serving in that position.

      F. Based upon their experience as business managers, the Board of Directors of the Company (the ― Board ‖) has concluded that, to retain
and attract talented and experienced individuals to serve as directors, officers and agents of the Company and its subsidiaries and to
encourage such individuals to take the business risks necessary for the success of the Company and its subsidiaries, it is necessary for the
Company to contractually indemnify its directors, officers and agents and the directors, officers and agents of its subsidiaries, and to assume for
itself maximum liability for expenses and damages in connection with claims against such directors, officers and agents in connection with
their service to the Company and its subsidiaries, and has further concluded that the failure to provide such contractual indemnification could
result in great harm to the Company and its subsidiaries and the Company’s stockholders.

     G. Section 145 of the General Corporation Law of Delaware, under which the Company is organized (― Section 145 ‖), empowers the
Company to indemnify its directors, officers, employees and agents by agreement and to indemnify persons who serve, at the request of the
Company, as the directors, officers, employees or agents of other corporations or enterprises, and expressly provides that the indemnification
provided by Section 145 is not exclusive.

     H. The Company desires and has requested the Indemnitee to serve or continue to serve as a director, officer or agent of the Company
and/or one or more subsidiaries of the Company free from undue concern for claims for damages arising out of or related to such services to the
Company and/or one or more subsidiaries of the Company.

      I. Indemnitee is only willing to serve, or to continue to serve, the Company and/or one or more subsidiaries of the Company, provided
that he is furnished the indemnity provided for herein.

                                                                 AGREEMENT

     NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby agree as follows:

     1. Definitions .

            (a) Agent . For the purposes of this Agreement, ―agent‖ of the Company means any person who is or was a director, officer,
     employee or other fiduciary of the Company or a subsidiary of the Company; or is or was serving at the request of, for the convenience
     of, or to represent the interests of the Company or a subsidiary of the Company as a director, officer, employee, fiduciary or agent of
     another foreign or domestic corporation, partnership, joint venture, trust or other enterprise; or was a director, officer, employee, fiduciary
     or agent of a foreign or domestic corporation which was a predecessor corporation of the Company or a subsidiary of the Company, or
     was a director, officer, employee, fiduciary or agent of another enterprise at the request of, for the convenience of, or to represent the
     interests of such predecessor corporation.

           (b) Expenses . For purposes of this Agreement, ―expenses‖ include all out-of-pocket costs of any type or nature whatsoever
     (including, without limitation, all attorneys’ fees and related disbursements), actually and reasonably incurred by the Indemnitee in
     connection with either the investigation, defense or appeal of a proceeding or establishing or enforcing a right to indemnification under
     this Agreement or Section 145 or otherwise; provided, however,
that ―expenses‖ shall not include any judgments, fines, ERISA excise taxes or penalties, or amounts paid in settlement of a proceeding.

      (c) Proceeding . For the purposes of this Agreement, ―proceeding‖ means any threatened, pending, or completed action, suit,
arbitration, alternative dispute mechanism, or other proceeding, whether civil, criminal, administrative, or investigative.

      (d) Subsidiary . For purposes of this Agreement, ―subsidiary‖ means any corporation of which more than 50% of the outstanding
voting securities is owned directly or indirectly by the Company, by the Company and one or more other subsidiaries, or by one or more
other subsidiaries.

       (e) Change in Control . For purposes of this Agreement a ―Change in Control‖ shall be deemed to have occurred if (i) any ―person‖
(as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended), other than a trustee or other
fiduciary holding securities under an employee benefit plan of the Company or a corporation owned directly or indirectly by the
stockholders of the Company in substantially the same proportions as their ownership of stock of the Company, (A) who is or becomes
the beneficial owner, directly or indirectly, of securities of the Company representing 10% or more of the combined voting power of the
Company’s then outstanding Voting Securities, increases his beneficial ownership of such securities by 5% or more over the percentage
so owned by such person, or (B) becomes the ―beneficial owner‖ (as defined in Rule 13d-3 under said Act), directly or indirectly, of
securities of the Company representing more than 20% of the total voting power represented by the Company’s then outstanding Voting
Securities, (ii) during any period of two consecutive years, individuals who at the beginning of such period constitute the Board of
Directors of the Company and any new director whose election by the Board of Directors or nomination for election by the Company’s
stockholders was approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of
the period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof,
or (iii) the stockholders of the Company approve a merger or consolidation of the Company with any other corporation other than a
merger or consolidation which would result in the Voting Securities of the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into Voting Securities of the surviving entity) at least 80% of the total
voting power represented by the Voting Securities of the Company or such surviving entity outstanding immediately after such merger or
consolidation, or the stockholders of the Company approve a plan of complete liquidation of the Company or an agreement for the sale or
disposition by the Company of (in one transaction or a series of transactions) all of substantially all of the Company’s assets.

      (f) Independent Legal Counsel . For purposes of this Agreement, ―Independent Legal Counsel‖ shall mean an attorney or firm of
attorneys, selected in accordance with the provisions of Section 4(g) hereof, who shall not have otherwise performed services for the
Company or Indemnitee within the last three years (other than with respect to matters concerning the rights of Indemnitee under this
Agreement, or of other Indemnitees under similar indemnity agreements).
          (g) Voting Securities . For purposes of this Agreement, ―Voting Securities‖ shall mean any securities of the Company that vote
     generally in the election of directors.

      2. At-Will Agreement to Serve . The Indemnitee agrees to serve and/or continue to serve as agent of the Company, at its will (or under
separate agreement, if such agreement exists), in the capacity Indemnitee currently serves as an agent of the Company, so long as he is duly
appointed or elected and qualified in accordance with the applicable provisions of the Bylaws of the Company or any subsidiary of the
Company or until such time as he tenders his resignation in writing; provided, however, that nothing contained in this Agreement is intended to
create any right to continued employment by Indemnitee.

     3. Liability Insurance .

            (a) Maintenance of D&O Insurance . The Company hereby covenants and agrees that, so long as the Indemnitee shall continue to
     serve as an agent of the Company and thereafter so long as the Indemnitee shall be subject to any possible proceeding by reason of the
     fact that the Indemnitee was an agent of the Company, the Company, subject to Section 3(c), shall promptly obtain and maintain in full
     force and effect directors’ and officers’ liability insurance (― D&O Insurance ‖) in reasonable amounts from established and reputable
     insurers.

          (b) Rights and Benefits . In all policies of D&O Insurance, the Indemnitee shall be named as an insured in such a manner as to
     provide the Indemnitee the same rights and benefits as are accorded to the most favorably insured of the Company’s directors, if the
     Indemnitee is a director; or of the Company’s officers, if the Indemnitee is not a director of the Company but is an officer; or of the
     Company’s key employees, if the Indemnitee is not a director or officer but is a key employee.

           (c) Limitation on Required Maintenance of D&O Insurance . Notwithstanding the foregoing, the Company shall have no obligation
     to obtain or maintain D&O Insurance if the Company determines in good faith that such insurance is not reasonably available, the
     premium costs for such insurance are disproportionate to the amount of coverage provided, the coverage provided by such insurance is
     limited by exclusions so as to provide an insufficient benefit, or the Indemnitee is covered by similar insurance maintained by a
     subsidiary of the Company.

           (d) Run-Off Endorsement . In the event that either (i) the D&O Insurance policy is renewed but the renewed policy does not provide
     for prior act’s coverage, (ii) the Company obtains a new D&O Insurance policy for period following the termination of the prior policy,
     and such new policy does not provide for prior act’s coverage, or (iii) the Company does not renew the policy or obtain a new policy
     following the termination of a policy, then unless otherwise determined by the Board, the Company shall add to the policy or the
     applicable successor policy a run-off endorsement (the ―Endorsement‖) on the existing policy or the applicable successor policy subject
     to substantially the same terms and conditions. Unless otherwise approved by the Board, the Endorsement shall be non-cancelable and
     shall provide for the three-year extended reporting period for any and all claims covered under the policy. The Company shall pay all
     premiums, commissions and other costs or charges incurred in obtaining the Endorsement and shall promptly deliver to Indemnitee a
     Certificate of Confirmation of Insurance with respect to such Endorsement.
4. Mandatory Indemnification . Subject to Section 9 below, the Company shall indemnify the Indemnitee as follows:

      (a) Successful Defense . To the extent the Indemnitee has been successful on the merits or otherwise in defense of any proceeding
(including, without limitation, an action by or in the right of the Company) to which the Indemnitee was a party by reason of the fact that
he is or was an agent of the Company at any time, against all expenses of any type whatsoever actually and reasonably incurred by him in
connection with the investigation, defense or appeal of such proceeding.

       (b) Third Party Actions . If the Indemnitee is a person who was or is a party or is threatened to be made a party to any proceeding
(other than an action by or in the right of the Company) by reason of the fact that he is or was an agent of the Company, or by reason of
anything done or not done by him in any such capacity, the Company shall indemnify the Indemnitee against any and all expenses and
liabilities of any type whatsoever (including, but not limited to, judgments, fines, ERISA excise taxes and penalties, and amounts paid in
settlement) actually and reasonably incurred by him in connection with the investigation, defense, settlement or appeal of such
proceeding, provided the Indemnitee acted in good faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the Company and its stockholders, and, with respect to any criminal action or proceeding, had no reasonable cause to believe
his conduct was unlawful.

       (c) Derivative Actions . If the Indemnitee is a person who was or is a party or is threatened to be made a party to any proceeding by
or in the right of the Company by reason of the fact that he is or was an agent of the Company, or by reason of anything done or not done
by him in any such capacity, the Company shall indemnify the Indemnitee against all expenses actually and reasonably incurred by him
in connection with the investigation, defense, settlement, or appeal of such proceeding, provided the Indemnitee acted in good faith and in
a manner he reasonably believed to be in or not opposed to the best interests of the Company and its stockholders; except that no
indemnification under this subsection 4(c) shall be made in respect to any claim, issue or matter as to which such person shall have been
finally adjudged to be liable to the Company by a court of competent jurisdiction unless and only to the extent that the court in which
such proceeding was brought shall determine upon application that, despite the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably entitled to indemnity for such amounts which the court shall deem proper.

       (d) Actions where Indemnitee is Deceased . If the Indemnitee is a person who was or is a party or is threatened to be made a party to
any proceeding by reason of the fact that he is or was an agent of the Company, or by reason of anything done or not done by him in any
such capacity, and if prior to, during the pendency of after completion of such proceeding Indemnitee becomes deceased, the Company
shall indemnify the Indemnitee’s heirs, executors and administrators against any and all expenses and liabilities of any type whatsoever
(including, but not limited to, judgments, fines, ERISA excise taxes and penalties, and amounts paid in settlement) actually and
reasonably incurred to the extent Indemnitee would have been entitled to indemnification pursuant to Sections 4(a), 4(b), or 4(c) above
were Indemnitee still alive.
           (e) No Obligation to Indemnify; Payments to Indemnitee . Notwithstanding the foregoing, the Company shall not be obligated to
     indemnify the Indemnitee for expenses or liabilities of any type whatsoever (including, but not limited to, judgments, fines, ERISA excise
     taxes and penalties, and amounts paid in settlement) for which payment is actually made to or on behalf of Indemnitee under a valid and
     collectible insurance policy of D&O Insurance, or under a valid and enforceable indemnity clause, by-law or agreement.

           (f) Conclusive Presumption Regarding Indemnitee Conduct . With respect to Sections 4(b) and 4(c) above, the Indemnitee shall be
     conclusively presumed to have acted in good faith and in a manner Indemnitee reasonably believed to be in, or not opposed to, the best
     interests of the Company and its stockholders, and, with respect to any criminal action or Proceeding, to have had no reasonable cause to
     believe Indemnitee’s conduct was unlawful, unless a determination is made that the Indemnitee has not acted in accordance with the
     standards set forth above (i) by the Board of Directors by a majority vote of a quorum thereof consisting of directors who were not parties
     to the Proceeding due to which a claim is made under this Agreement, (ii) by the stockholders of the Company by a majority vote of
     stockholders who were not parties to such a Proceeding, or (iii) in a written opinion of Independent Legal Counsel, selection of whom has
     been approved by the Indemnitee in writing (which approval shall not be unreasonably withheld) or by a panel of arbitrators, one of
     whom is selected by the Company, another of whom is selected by the Indemnitee and the last of whom is selected by the first two
     arbitrators so selected.

            (g) Change in Control . The Company agrees that if there is a Change in Control of the Company (other than a Change in Control
     which has been approved by a majority of the Company’s Board of Directors who were directors immediately prior to such Change in
     Control) then, with respect to all matters thereafter arising concerning the rights of Indemnitees to payments of expenses under this
     Agreement or any other agreement or under the Company’s Certificate of Incorporation or Bylaws as now or hereafter in effect,
     Independent Legal Counsel (as defined in Section 1 hereof) shall be selected by Indemnitee and approved by the Company (which
     approval shall not be unreasonably withheld). Such counsel, among other things, shall render its written opinion to the Company and
     Indemnitee as to whether and to what extent Indemnitee would be permitted to be indemnified under applicable law and the Company
     agrees to abide by such opinion. The Company agrees to pay the reasonable fees of the Independent Legal Counsel referred to above and
     to fully indemnify such counsel against any and all expenses (including attorneys’ fees), claims, liabilities and damages arising out of or
     relating to this Agreement or its engagement pursuant hereto.

      5. Partial Indemnification . If the Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for
some or a portion of any expenses or liabilities of any type whatsoever (including, but not limited to, judgments, fines, ERISA excise taxes and
penalties, and amounts paid in settlement) incurred by him in the investigation, defense, settlement or appeal of a proceeding, but not entitled,
however, to indemnification for all of the total amount hereof, the Company shall nevertheless indemnify the Indemnitee for such total amount
except as to the portion hereof to which the Indemnitee is not entitled.

     6. Mandatory Advancement of Expenses . Subject to Section 8(a) below, the Company shall advance all expenses incurred by the
Indemnitee in connection with the investigation,
defense, settlement or appeal of any proceeding to which the Indemnitee is a party or is threatened to be made a party by reason of the fact that
the Indemnitee is or was an agent of the Company. Indemnitee hereby undertakes to repay such amounts advanced only if, and to the extent
that, it shall be determined ultimately that the Indemnitee is not entitled to be indemnified by the Company as authorized hereby. The advances
to be made hereunder shall be paid by the Company to the Indemnitee within twenty (20) days following delivery of a written request therefor
by the Indemnitee to the Company. In the event that the Company fails to pay expenses as incurred by the Indemnitee as required by this
paragraph, Indemnitee may seek mandatory injunctive relief from any court having jurisdiction to require the Company to pay expenses as set
forth in this paragraph. If Indemnitee seeks mandatory injunctive relief pursuant to this paragraph, it shall not be a defense to enforcement of
the Company’s obligations set forth in this paragraph that Indemnitee has an adequate remedy at law for damages.

     7. Notice and Other Indemnification Procedures .

           (a) Promptly after receipt by the Indemnitee of notice of the commencement of or the threat of commencement of any proceeding,
     the Indemnitee shall, if the Indemnitee believes that indemnification with respect thereto may be sought from the Company under this
     Agreement, notify the Company of the commencement or threat of commencement thereof.

           (b) If, at the time of the receipt of a notice of the commencement of a proceeding pursuant to Section 7(a) hereof, the Company has
     D&O Insurance in effect, the Company shall give prompt notice of the commencement of such proceeding to the insurers in accordance
     with the procedures set forth in the respective policies. The Company shall thereafter take all necessary or desirable action to cause such
     insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such proceeding in accordance with the terms of such
     policies.

           (c) In the event the Company shall be obligated to pay the expenses of any proceeding against the Indemnitee, the Company, if
     appropriate, shall be entitled to assume the defense of such proceeding, with counsel approved by the Indemnitee, upon the delivery to the
     Indemnitee of written notice of its election so to do. After delivery of such notice, approval of such counsel by the Indemnitee and the
     retention of such counsel by the Company, the Company will not be liable to the Indemnitee under this Agreement for any fees of counsel
     subsequently incurred by the Indemnitee with respect to the same proceeding, provided that (i) the Indemnitee shall have the right to
     employ his counsel in any such proceeding at the Indemnitee’s expense; and (ii) if (A) the employment of counsel by the Indemnitee has
     been previously authorized by the Company, (B) the Indemnitee shall have reasonably concluded that there may be a conflict of interest
     between the Company and the Indemnitee in the conduct of any such defense, or (C) the Company shall not, in fact, have employed
     counsel to assume the defense of such proceeding, then the fees and expenses of Indemnitee’s counsel shall be at the expense of the
     Company.

      8. Exceptions . Any other provision herein to the contrary notwithstanding, the Company shall not be obligated pursuant to the terms of
this Agreement:

            (a) Claims Initiated by Indemnitee . To indemnify or advance expenses to the Indemnitee with respect to proceedings or claims
     initiated or brought voluntarily by the Indemnitee and not by way of defense, unless (i) such indemnification is expressly required to be
     made by law, (ii) the proceeding was authorized by the Board, (iii) such indemnification is provided by the Company, in its sole
     discretion, pursuant to the powers vested in the Company under the General Corporation Law of Delaware or (iv) the proceeding is
     brought to establish or enforce a right to indemnification under this Agreement or any other statute or law or otherwise as required under
     Section 145;

            (b) Lack of Good Faith . To indemnify the Indemnitee for any expenses incurred by the Indemnitee with respect to any proceeding
     instituted by the Indemnitee to enforce or interpret this Agreement, if a court of competent jurisdiction determines that each of the
     material assertions made by the Indemnitee in such proceeding was not made in good faith or was frivolous; or

          (c) Unauthorized Settlements . To indemnify the Indemnitee under this Agreement for any amounts paid in settlement of a
     proceeding unless the Company consents to such settlement, which consent shall not be unreasonably withheld.

      9. Non-exclusivity . The provisions for indemnification and advancement of expenses set forth in this Agreement shall not be deemed
exclusive of any other rights which the Indemnitee may have under any provision of law, the Company’s Certificate of Incorporation or
Bylaws, the vote of the Company’s stockholders or disinterested directors, other agreements, or otherwise, both as to action in his official
capacity and to action in another capacity while occupying his position as an agent of the Company, and the Indemnitee’s rights hereunder shall
continue after the Indemnitee has ceased acting as an agent of the Company and shall inure to the benefit of the heirs, executors and
administrators of the Indemnitee.

      10. Enforcement . Any right to indemnification or advances granted by this Agreement to Indemnitee shall be enforceable by or on behalf
of Indemnitee in any court of competent jurisdiction if (i) the claim for indemnification or advances is denied, in whole or in part, or (ii) no
disposition of such claim is made within ninety (90) days of request therefor. Indemnitee, in such enforcement action, if successful in whole or
in part, shall be entitled to be paid also the expense of prosecuting his claim. It shall be a defense to any action for which a claim for
indemnification is made under this Agreement (other than an action brought to enforce a claim for expenses pursuant to Section 6 hereof,
provided that the required undertaking has been tendered to the Company) that Indemnitee is not entitled to indemnification because of the
limitations set forth in Sections 4 and 8 hereof. Neither the failure of the Company (including its Board of Directors or its stockholders) to have
made a determination prior to the commencement of such enforcement action that indemnification of Indemnitee is proper in the
circumstances, nor an actual determination by the Company (including its Board of Directors or its stockholders) that such indemnification is
improper, shall be a defense to the action or create a presumption that Indemnitee is not entitled to indemnification under this Agreement or
otherwise.

      11. Subrogation . In the event the Company is obligated to make a payment under this Agreement, the Company shall be subrogated to
the extent of such payment to all of the rights of recovery under an insurance policy or any other indemnity agreement covering the Indemnitee,
who shall execute all documents required and shall do all acts that may be necessary to secure such rights and to enable the Company
effectively to bring suit to enforce such rights.
     12. Survival of Rights .

           (a) All agreements and obligations of the Company contained herein shall continue during the period Indemnitee is an agent of the
     Company and shall continue thereafter so long as Indemnitee shall be subject to any possible claim or threatened, pending or completed
     action, suit or proceeding, whether civil, criminal, arbitrational, administrative or investigative, by reason of the fact that Indemnitee was
     serving in the capacity referred to herein.

           (b) The Company shall require any successor to the Company (whether direct or indirect, by purchase, merger, consolidation or
     otherwise) to all or substantially all of the business or assets of the Company, expressly to assume and agree to perform this Agreement in
     the same manner and to the same extent that the Company would be required to perform if no such succession had taken place.

     13. Interpretation of Agreement . It is understood that the parties hereto intend this Agreement to be interpreted and enforced so as to
provide indemnification to the Indemnitee to the fullest extent permitted by law including those circumstances in which indemnification would
otherwise be discretionary.

      14. Severability . If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason
whatsoever, (i) the validity, legality and enforceability of the remaining provisions of the Agreement (including without limitation, all portions
of any paragraphs of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that are not themselves invalid,
illegal or unenforceable) shall not in any way be affected or impaired thereby, and (ii) to the fullest extent possible, the provisions of this
Agreement (including, without limitation, all portions of any paragraph of this Agreement containing any such provision held to be invalid,
illegal or unenforceable, that are not themselves invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested
by the provision held invalid, illegal or unenforceable and to give effect to Section 13 hereof.

      15. Modification and Waiver . No supplement, modification or amendment of this Agreement shall be binding unless executed in writing
by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other
provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.

      16. Notice . All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed duly
given (i) if delivered by hand and receipted for by the party addressee or (ii) if mailed by certified or registered mail with postage prepaid, on
the third business day after the mailing date. Addresses for notice to either party are as shown on the signature page of this Agreement, or as
subsequently modified by written notice.

      17. Governing Law . This Agreement shall be governed exclusively by and construed according to the laws of the State of Delaware as
applied to contracts between Delaware residents entered into and to be performed entirely within Delaware.
The parties hereto have entered into this Indemnity Agreement effective as of the date first above written.

                                                                                 THE COMPANY:

                                                                                 salesforce.com, inc.

                                                                                 By


                                                                                 Title


                                                                                 Address




                                                                                              Attn:


                                                                                 INDEMNITEE:


                                                                                 [Name]

                                                                                 Address
                             Exhibit 10.3

   salesforce.com, inc.

2004 Equity Incentive Plan
                                                          TABLE OF CONTENTS

                                                                              Page

1.    Establishment, Purpose and Term of Plan                                   1
     1.1 Establishment                                                          1
     1.2 Purpose                                                                1
     1.3 Term of Plan                                                           1
2.    Definitions and Construction                                              1
     2.1 Definitions                                                            1
     2.2 Construction                                                           6
3.    Administration                                                            6
     3.1 Administration by the Committee                                        6
     3.2 Authority of Officers                                                  6
     3.3 Administration with Respect to Insiders                                7
     3.4 Committee Complying with Section 162(m)                                7
     3.5 Powers of the Committee                                                7
     3.6 Indemnification                                                        8
4.    Shares Subject to Plan                                                    8
     4.1 Maximum Number of Shares Issuable                                      8
     4.2 Annual Increase in Maximum Number of Shares Issuable                   9
     4.3 Adjustments for Changes in Capital Structure                           9
5.    Eligibility and Award Limitations                                        10
     5.1 Persons Eligible for Awards                                           10
     5.2 Participation                                                         10
     5.3 Incentive Stock Option Limitations                                    10
6.    Terms and Conditions of Options                                          11
     6.1 Exercise Price                                                        11
     6.2 Exercisability and Term of Options                                    11
     6.3 Payment of Exercise Price                                             11
     6.4 Effect of Termination of Service                                      12
     6.5 Transferability of Options                                            13
7.    Terms and Conditions of Stock Appreciation Rights                        13
     7.1 Types of SARs Authorized                                              14
     7.2 Exercise Price                                                        14
     7.3 Exercisability and Term of SARs                                       14
     7.4 Exercise of SARs                                                      14
     7.5 Deemed Exercise of SARs                                               15
     7.6 Effect of Termination of Service                                      15
     7.7 Nontransferability of SARs                                            15
8.    Terms and Conditions of Restricted Stock Awards                          15
     8.1 Types of Restricted Stock Awards Authorized                           15
     8.2 Purchase Price                                                        16

                                                                 -i-
                                                           TABLE OF CONTENTS
                                                               (continued)
                                                                                                 Page

      8.3   Purchase Period                                                                       16
      8.4   Payment of Purchase Price                                                             16
      8.5   Vesting and Restrictions on Transfer                                                  16
      8.6   Voting Rights; Dividends and Distributions                                            16
      8.7   Effect of Termination of Service                                                      17
      8.8   Nontransferability of Restricted Stock Award Rights                                   17
9.     Terms and Conditions of Performance Awards                                                 17
      9.1 Types of Performance Awards Authorized                                                  17
      9.2 Initial Value of Performance Shares and Performance Units                               17
      9.3 Establishment of Performance Period, Performance Goals and Performance Award Formula    18
      9.4 Measurement of Performance Goals                                                        18
      9.5 Settlement of Performance Awards                                                        19
      9.6 Voting Rights; Dividend Equivalent Rights and Distributions                             20
      9.7 Effect of Termination of Service                                                        21
      9.8 Nontransferability of Performance Awards                                                21
10.    Terms and Conditions of Restricted Stock Unit Awards                                       22
      10.1 Grant of Restricted Stock Unit Awards                                                  22
      10.2 Purchase Price                                                                         22
      10.3 Vesting                                                                                22
      10.4 Voting Rights, Dividend Equivalent Rights and Distributions                            22
      10.5 Effect of Termination of Service                                                       23
      10.6 Settlement of Restricted Stock Unit Awards                                             23
      10.7 Nontransferability of Restricted Stock Unit Awards                                     23
11.    Deferred Compensation Awards                                                               23
      11.1 Establishment of Deferred Compensation Award Programs                                  23
      11.2 Terms and Conditions of Deferred Compensation Awards                                   24
12.    Standard Forms of Award Agreement                                                          25
      12.1 Award Agreements                                                                       25
      12.2 Authority to Vary Terms                                                                25
13.    Change in Control                                                                          25
      13.1 Definitions                                                                            25
      13.2 Effect of Change in Control on Options and SARs                                        26
      13.3 Effect of Change in Control on Restricted Stock Awards                                 27
      13.4 Effect of Change in Control on Performance Awards                                      27
      13.5 Effect of Change in Control on Restricted Stock Unit Awards                            27
      13.6 Effect of Change in Control on Deferred Compensation Awards                            27
14.    Compliance with Securities Law                                                             27
15.    Tax Withholding                                                                            28

                                                                     -ii-
                                                        TABLE OF CONTENTS
                                                            (continued)
                                                                            Page

      15.1 Tax Withholding in General                                        28
      15.2 Withholding in Shares                                             28
16.    Amendment or Termination of Plan                                      28
17.    Miscellaneous Provisions                                              28
      17.1 Repurchase Rights                                                 28
      17.2 Provision of Information                                          29
      17.3 Rights as Employee, Consultant or Director                        29
      17.4 Rights as a Stockholder                                           29
      17.5 Fractional Shares                                                 29
      17.6 Severability                                                      29
      17.7 Beneficiary Designation                                           29
      17.8 Unfunded Obligation                                               30

                                                               -iii-
                                                       salesforce.com, inc.
                                                    2004 Equity Incentive Plan

1.    E STABLISHMENT , P URPOSE AND T ERM OF P LAN .

     1.1 Establishment. The salesforce.com, inc. 2004 Equity Incentive Plan (the ―Plan‖ ) is hereby established effective as of March 1,
2004, the date of its approval by the stockholders of the Company (the ―Effective Date‖ ).

     1.2 Purpose. The purpose of the Plan is to advance the interests of the Participating Company Group and its stockholders by
providing an incentive to attract, retain and reward persons performing services for the Participating Company Group and by motivating
such persons to contribute to the growth and profitability of the Participating Company Group. The Plan seeks to achieve this purpose by
providing for Awards in the form of Options, Stock Appreciation Rights, Restricted Stock Purchase Rights, Restricted Stock Bonuses,
Performance Shares, Performance Units, Restricted Stock Units and Deferred Compensation Awards.

      1.3 Term of Plan. The Plan shall continue in effect until the earlier of its termination by the Board or the date on which all of the
shares of Stock available for issuance under the Plan have been issued and all restrictions on such shares under the terms of the Plan and
the agreements evidencing Awards granted under the Plan have lapsed. However, all Awards shall be granted, if at all, within ten (10)
years from the Effective Date.

2.    D EFINITIONS AND C ONSTRUCTION .

     2.1 Definitions. Whenever used herein, the following terms shall have their respective meanings set forth below:

           (a) “Affiliate” means (i) an entity, other than a Parent Corporation, that directly, or indirectly through one or more
     intermediary entities, controls the Company or (ii) an entity, other than a Subsidiary Corporation, that is controlled by the Company
     directly, or indirectly through one or more intermediary entities. For this purpose, the term ―control‖ (including the term ―controlled
     by‖) means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of the
     relevant entity, whether through the ownership of voting securities, by contract or otherwise; or shall have such other meaning
     assigned such term for the purposes of registration on Form S-8 under the Securities Act.

          (b) “Award” means any Option, SAR, Restricted Stock Purchase Right, Restricted Stock Bonus, Performance Share,
     Performance Unit, Restricted Stock Unit or Deferred Compensation Award granted under the Plan.

          (c) “Award Agreement” means a written agreement between the Company and a Participant setting forth the terms,
     conditions and restrictions of the Award granted to the Participant. An Award Agreement may be an ―Option Agreement,‖ an ―SAR
     Agreement,‖ a ―Restricted Stock Purchase Agreement,‖ a ―Restricted Stock Bonus Agreement,‖

                                                                  1
a ―Performance Share Agreement,‖ a ―Performance Unit Agreement,‖ a ―Restricted Stock Unit Agreement,‖ or a ―Deferred
Compensation Award Agreement.‖

     (d) “Board ” means the Board of Directors of the Company.

      (e) “Cause” means, unless otherwise defined by the Participant’s Award Agreement or contract of employment or service,
any of the following: (i) the Participant’s theft, dishonesty, or falsification of any Participating Company documents or records; (ii)
the Participant’s improper use or disclosure of a Participating Company’s confidential or proprietary information; (iii) any action by
the Participant which has a detrimental effect on a Participating Company’s reputation or business; (iv) the Participant’s failure or
inability to perform any reasonable assigned duties after written notice from a Participating Company of, and a reasonable
opportunity to cure, such failure or inability; (v) any material breach by the Participant of any employment or service agreement
between the Participant and a Participating Company, which breach is not cured pursuant to the terms of such agreement; or (vi) the
Participant’s conviction (including any plea of guilty or nolo contendere) of any criminal act which impairs the Participant’s ability
to perform his or her duties with a Participating Company.

     (f) “Code ” means the Internal Revenue Code of 1986, as amended, and any applicable regulations promulgated thereunder.

     (g) “Committee ” means the Compensation Committee or other committee of the Board duly appointed to administer the Plan
and having such powers as shall be specified by the Board. If no committee of the Board has been appointed to administer the Plan,
the Board shall exercise all of the powers of the Committee granted herein, and, in any event, the Board may in its discretion
exercise any or all of such powers.

     (h) “Company ” means salesforce.com, inc., a Delaware corporation, or any successor corporation thereto.

      (i) “Consultant ” means a person engaged to provide consulting or advisory services (other than as an Employee or a member
of the Board) to a Participating Company, provided that the identity of such person, the nature of such services or the entity to
which such services are provided would not preclude the Company from offering or selling securities to such person pursuant to the
Plan in reliance on registration on a Form S-8 Registration Statement under the Securities Act.

      (j) “Deferred Compensation Award” means an award of Restricted Stock Units granted to a Participant pursuant to Section
11 of the Plan.

     (k) “Director” means a member of the Board.

     (l) “Disability ” means the permanent and total disability of the Participant, within the meaning of Section 22(e)(3) of the
Code.

      (m) “Dividend Equivalent” means a credit, made at the discretion of the Committee or as otherwise provided by the Plan, to
the account of a Participant in an amount

                                                             2
equal to the cash dividends paid on one share of Stock for each share of Stock represented by an Award held by such Participant.

      (n) “Employee ” means any person treated as an employee (including an Officer or a member of the Board who is also treated
as an employee) in the records of a Participating Company and, with respect to any Incentive Stock Option granted to such person,
who is an employee for purposes of Section 422 of the Code; provided, however, that neither service as a member of the Board nor
payment of a director’s fee shall be sufficient to constitute employment for purposes of the Plan. The Company shall determine in
good faith and in the exercise of its discretion whether an individual has become or has ceased to be an Employee and the effective
date of such individual’s employment or termination of employment, as the case may be. For purposes of an individual’s rights, if
any, under the Plan as of the time of the Company’s determination, all such determinations by the Company shall be final, binding
and conclusive, notwithstanding that the Company or any court of law or governmental agency subsequently makes a contrary
determination.

     (o) “Exchange Act ” means the Securities Exchange Act of 1934, as amended.

      (p) “Fair Market Value ” means, as of any date, the value of a share of Stock or other property as determined by the
Committee, in its discretion, or by the Company, in its discretion, if such determination is expressly allocated to the Company
herein, subject to the following:

             (i) If, on such date, the Stock is listed on a national or regional securities exchange or market system, the Fair Market
       Value of a share of Stock shall be the closing price of a share of Stock (or the mean of the closing bid and asked prices of a
       share of Stock if the Stock is so quoted instead) as quoted on the Nasdaq National Market, The Nasdaq SmallCap Market or
       such other national or regional securities exchange or market system constituting the primary market for the Stock, as
       reported in The Wall Street Journal or such other source as the Company deems reliable. If the relevant date does not fall on
       a day on which the Stock has traded on such securities exchange or market system, the date on which the Fair Market Value
       shall be established shall be the last day on which the Stock was so traded prior to the relevant date, or such other
       appropriate day as shall be determined by the Committee, in its discretion.

             (ii) If, on such date, the Stock is not listed on a national or regional securities exchange or market system, the Fair
       Market Value of a share of Stock shall be as determined by the Committee in good faith without regard to any restriction
       other than a restriction which, by its terms, will never lapse.

     (q) “Incentive Stock Option” means an Option intended to be (as set forth in the Award Agreement) and which qualifies as an
incentive stock option within the meaning of Section 422(b) of the Code.

      (r) “Insider” means an Officer, a member of the Board or any other person whose transactions in Stock are subject to Section
16 of the Exchange Act.

                                                             3
      (s) “Nonstatutory Stock Option ” means an Option not intended to be (as set forth in the Award Agreement) an incentive
stock option within the meaning of Section 422(b) of the Code.

     (t) “Officer” means any person designated by the Board as an officer of the Company.

     (u) “Option ” means the right to purchase Stock at a stated price for a specified period of time granted to a Participant
pursuant to Section 6 of the Plan. An Option may be either an Incentive Stock Option or a Nonstatutory Stock Option.

     (v) “Parent Corporation ” means any present or future ―parent corporation‖ of the Company, as defined in Section 424(e) of
the Code.

     (w) “Participant” means any eligible person who has been granted one or more Awards.

     (x) “Participating Company ” means the Company or any Parent Corporation, Subsidiary Corporation or Affiliate.

    (y) “Participating Company Group ” means, at any point in time, all entities collectively which are then Participating
Companies.

     (z) “Performance Award” means an Award of Performance Shares or Performance Units.

      (aa) “Performance Award Formula” means, for any Performance Award, a formula or table established by the Committee
pursuant to Section 9.3 of the Plan which provides the basis for computing the value of a Performance Award at one or more
threshold levels of attainment of the applicable Performance Goal(s) measured as of the end of the applicable Performance Period.

     (bb) “Performance Goal” means a performance goal established by the Committee pursuant to Section 9.3 of the Plan.

     (cc) “Performance Period” means a period established by the Committee pursuant to Section 9.3 of the Plan at the end of
which one or more Performance Goals are to be measured.

      (dd) “Performance Share” means a bookkeeping entry representing a right granted to a Participant pursuant to Section 9 of
the Plan to receive a payment equal to the value of a Performance Share, as determined by the Committee, based on performance.

      (ee) “Performance Unit” means a bookkeeping entry representing a right granted to a Participant pursuant to Section 9 of the
Plan to receive a payment equal to the value of a Performance Unit, as determined by the Committee, based upon performance.

                                                            4
        (ff) “Restricted Stock Award” means an Award of a Restricted Stock Bonus or a Restricted Stock Purchase Right.

        (gg) “Restricted Stock Bonus” means Stock granted to a Participant pursuant to Section 8 of the Plan.

        (hh) “Restricted Stock Purchase Right” means a right to purchase Stock granted to a Participant pursuant to Section 8 of the
Plan.

      (ii) “Restricted Stock Unit” or “Stock Unit” means a bookkeeping entry representing a right granted to a Participant pursuant
to Section 10 or Section 11 of the Plan, respectively, to receive a share of Stock on a date determined in accordance with the
provisions of Section 10 or Section 11, as applicable, and the Participant’s Award Agreement.

      (jj) “Restriction Period” means the period established in accordance with Section 8.5 of the Plan during which shares subject
to a Restricted Stock Award are subject to Vesting Conditions.

      (kk) “Rule 16b-3” means Rule 16b-3 under the Exchange Act, as amended from time to time, or any successor rule or
regulation.

      (ll) “SAR” or “Stock Appreciation Right” means a bookkeeping entry representing, for each share of Stock subject to such
SAR, a right granted to a Participant pursuant to Section 7 of the Plan to receive payment of an amount equal to the excess, if any,
of the Fair Market Value of a share of Stock on the date of exercise of the SAR over the exercise price.

        (mm) “Section 162(m)” means Section 162(m) of the Code.

        (nn) “Securities Act ” means the Securities Act of 1933, as amended.

      (oo) “Service ” means a Participant’s employment or service with the Participating Company Group, whether in the capacity
of an Employee, a Director or a Consultant. A Participant’s Service shall not be deemed to have terminated merely because of a
change in the capacity in which the Participant renders such Service or a change in the Participating Company for which the
Participant renders such Service, provided that there is no interruption or termination of the Participant’s Service. Furthermore, a
Participant’s Service shall not be deemed to have terminated if the Participant takes any military leave, sick leave, or other bona
fide leave of absence approved by the Company. However, if any such leave taken by a Participant exceeds ninety (90) days, then
on the one hundred eighty-first (181st) day following the commencement of such leave any Incentive Stock Option held by the
Participant shall cease to be treated as an Incentive Stock Option and instead shall be treated thereafter as a Nonstatutory Stock
Option, unless the Participant’s right to return to Service with the Participating Company Group is guaranteed by statute or contract.
Notwithstanding the foregoing, unless otherwise designated by the Company or required by law, a leave of absence shall not be
treated as Service for purposes of determining vesting under the Participant’s Award Agreement. A Participant’s Service shall be
deemed to have terminated either upon an actual termination of Service or upon the entity for which the Participant performs
Service ceasing to

                                                             5
     be a Participating Company. Subject to the foregoing, the Company, in its discretion, shall determine whether the Participant’s
     Service has terminated and the effective date of such termination.

             (pp) “Stock ” means the common stock of the Company, as adjusted from time to time in accordance with Section 4.3 of the
     Plan.

          (qq) “Subsidiary Corporation ” means any present or future ―subsidiary corporation‖ of the Company, as defined in Section
     424(f) of the Code.

           (rr) “Ten Percent Owner” means a Participant who, at the time an Option is granted to the Participant, owns stock possessing
     more than ten percent (10%) of the total combined voting power of all classes of stock of a Participating Company (other than an
     Affiliate) within the meaning of Section 422(b)(6) of the Code.

           (ss) “Vesting Conditions” mean those conditions established in accordance with Section 8.5 or Section 10.3 of the Plan prior
     to the satisfaction of which shares subject to a Restricted Stock Award or Restricted Stock Unit Award, respectively, remain subject
     to forfeiture or a repurchase option in favor of the Company upon the Participant’s termination of Service.

      2.2 Construction. Captions and titles contained herein are for convenience only and shall not affect the meaning or interpretation of
any provision of the Plan. Except when otherwise indicated by the context, the singular shall include the plural and the plural shall
include the singular. Use of the term ―or‖ is not intended to be exclusive, unless the context clearly requires otherwise.

3.    A DMINISTRATION .

      3.1 Administration by the Committee. The Plan shall be administered by the Committee. All questions of interpretation of the
Plan or of any Award shall be determined by the Committee, and such determinations shall be final and binding upon all persons having
an interest in the Plan or such Award.

      3.2 Authority of Officers. Any Officer shall have the authority to act on behalf of the Company with respect to any matter, right,
obligation, determination or election which is the responsibility of or which is allocated to the Company herein, provided the Officer has
apparent authority with respect to such matter, right, obligation, determination or election. The Board may, in its discretion, delegate to a
committee comprised of one or more Officers the authority to grant one or more Options, without further approval of the Board or the
Committee, to any Employee, other than a person who, at the time of such grant, is an Insider; provided, however, that (a) such Options
shall not be granted for shares in excess of the maximum aggregate number of shares of Stock authorized for issuance pursuant to Section
4.1, (b) the exercise price per share of each Option shall be not less than the Fair Market Value per share of the Stock on the effective date
of grant (or, if the Stock has not traded on such date, on the last day preceding the effective date of grant on which the Stock was traded),
and (iii) each such Option shall be subject to the terms and conditions of the appropriate standard form of Award Agreement approved by
the Board or the Committee and shall conform to the provisions of the

                                                                   6
Plan and such other guidelines as shall be established from time to time by the Board or the Committee.

      3.3 Administration with Respect to Insiders. With respect to participation by Insiders in the Plan, at any time that any class of
equity security of the Company is registered pursuant to Section 12 of the Exchange Act, the Plan shall be administered in compliance
with the requirements, if any, of Rule 16b-3.

     3.4 Committee Complying with Section 162(m). If the Company is a ―publicly held corporation‖ within the meaning of Section
162(m), the Board may establish a Committee of ―outside directors‖ within the meaning of Section 162(m) to approve the grant of any
Award which might reasonably be anticipated to result in the payment of employee remuneration that would otherwise exceed the limit
on employee remuneration deductible for income tax purposes pursuant to Section 162(m).

   3.5 Powers of the Committee. In addition to any other powers set forth in the Plan and subject to the provisions of the Plan, the
Committee shall have the full and final power and authority, in its discretion:

          (a) to determine the persons to whom, and the time or times at which, Awards shall be granted and the number of shares of
     Stock or units to be subject to each Award;

          (b) to determine the type of Award granted and to designate Options as Incentive Stock Options or Nonstatutory Stock
     Options;

           (c) to determine the Fair Market Value of shares of Stock or other property;

           (d) to determine the terms, conditions and restrictions applicable to each Award (which need not be identical) and any shares
     acquired pursuant thereto, including, without limitation, (i) the exercise or purchase price of shares purchased pursuant to any
     Award, (ii) the method of payment for shares purchased pursuant to any Award, (iii) the method for satisfaction of any tax
     withholding obligation arising in connection with Award, including by the withholding or delivery of shares of Stock, (iv) the
     timing, terms and conditions of the exercisability or vesting of any Award or any shares acquired pursuant thereto, (v) the
     Performance Award Formula and Performance Goals applicable to any Award and the extent to which such Performance Goals
     have been attained, (vi) the time of the expiration of any Award, (vii) the effect of the Participant’s termination of Service on any of
     the foregoing, and (viii) all other terms, conditions and restrictions applicable to any Award or shares acquired pursuant thereto not
     inconsistent with the terms of the Plan;

           (e) to determine whether an Award of SARs, Performance Shares or Performance Units will be settled in shares of Stock,
     cash, or in any combination thereof;

           (f) to approve one or more forms of Award Agreement;

           (g) to amend, modify, extend, cancel or renew any Award or to waive any restrictions or conditions applicable to any Award
     or any shares acquired pursuant thereto;

                                                                  7
           (h) to accelerate, continue, extend or defer the exercisability or vesting of any Award or any shares acquired pursuant thereto,
     including with respect to the period following a Participant’s termination of Service;

           (i) to prescribe, amend or rescind rules, guidelines and policies relating to the Plan, or to adopt sub-plans or supplements to, or
     alternative versions of, the Plan, including, without limitation, as the Committee deems necessary or desirable to comply with the
     laws or regulations of or to accommodate the tax policy, accounting principles or custom of, foreign jurisdictions whose citizens
     may be granted Awards; and

            (j) to correct any defect, supply any omission or reconcile any inconsistency in the Plan or any Award Agreement and to make
     all other determinations and take such other actions with respect to the Plan or any Award as the Committee may deem advisable to
     the extent not inconsistent with the provisions of the Plan or applicable law.

      3.6 Indemnification. In addition to such other rights of indemnification as they may have as members of the Board or the
Committee or as officers or employees of the Participating Company Group, members of the Board or the Committee and any officers or
employees of the Participating Company Group to whom authority to act for the Board, the Committee or the Company is delegated shall
be indemnified by the Company against all reasonable expenses, including attorneys’ fees, actually and necessarily incurred in connection
with the defense of any action, suit or proceeding, or in connection with any appeal therein, to which they or any of them may be a party
by reason of any action taken or failure to act under or in connection with the Plan, or any right granted hereunder, and against all
amounts paid by them in settlement thereof (provided such settlement is approved by independent legal counsel selected by the
Company) or paid by them in satisfaction of a judgment in any such action, suit or proceeding, except in relation to matters as to which it
shall be adjudged in such action, suit or proceeding that such person is liable for gross negligence, bad faith or intentional misconduct in
duties; provided, however, that within sixty (60) days after the institution of such action, suit or proceeding, such person shall offer to the
Company, in writing, the opportunity at its own expense to handle and defend the same.

4.    S HARES S UBJECT TO P LAN .

      4.1 Maximum Number of Shares Issuable. Subject to adjustment as provided in Section 4.2 and Section 4.3, the maximum
aggregate number of shares of Stock that may be issued under the Plan shall be four million (4,000,000) and shall consist of authorized
but unissued or reacquired shares of Stock or any combination thereof. If an outstanding Award for any reason expires or is terminated or
canceled without having been exercised or settled in full, or if shares of Stock acquired pursuant to an Award subject to forfeiture or
repurchase are forfeited or repurchased by the Company at the Participant’s purchase price, the shares of Stock allocable to the terminated
portion of such Award or such forfeited or repurchased shares of Stock shall again be available for issuance under the Plan. Shares of
Stock shall not be deemed to have been issued pursuant to the Plan (a) with respect to any portion of an Award that is settled in cash or
(b) to the extent such shares are withheld in satisfaction of tax withholding obligations pursuant to Section 15.2. Upon payment in shares
of Stock pursuant to the exercise of an SAR, the number of shares available for issuance under the Plan shall be reduced only by

                                                                   8
the number of shares actually issued in such payment. If the exercise price of an Option is paid by tender to the Company, or attestation to
the ownership, of shares of Stock owned by the Participant, the number of shares available for issuance under the Plan shall be reduced
by the net number of shares for which the Option is exercised.

      4.2 Annual Increase in Maximum Number of Shares Issuable. The maximum aggregate number of shares of Stock that may be
issued under the Plan as set forth in Section 4.1 shall be cumulatively increased as follows:

            (a) on February 1, 2005 and February 1, 2006 by a number of shares equal to the smallest of (i) five percent (5%) of the
     number of shares of Stock issued and outstanding on the immediately preceding January 31, (ii) five million (5,000,000) shares or
     (iii) an amount determined by the Board;

            (b) on February 1, 2007 and February 1, 2008 by a number of shares equal to the smallest of (i) four percent (4%) of the
     number of shares of Stock issued and outstanding on the immediately preceding January 31, (ii) four million (4,000,000) shares or
     (iii) an amount determined by the Board; and

           (c) on February 1, 2009 and each February 1 thereafter, through and including February 1, 2013, by a number of shares equal
     to the smallest of (i) three and one half percent (3.5%) of the number of shares of Stock issued and outstanding on the immediately
     preceding January 31, (ii) three million five hundred thousand (3,500,000) shares or (iii) an amount determined by the Board.

      4.3 Adjustments for Changes in Capital Structure. Subject to any required action by the stockholders of the Company, in the
event of any change in the Stock effected without receipt of consideration by the Company, whether through merger, consolidation,
reorganization, reincorporation, recapitalization, reclassification, stock dividend, stock split, reverse stock split, split-up, split-off,
spin-off, combination of shares, exchange of shares, or similar change in the capital structure of the Company, or in the event of payment
of a dividend or distribution to the stockholders of the Company in a form other than Stock (excepting normal cash dividends) that has a
material effect on the Fair Market Value of shares of Stock, appropriate adjustments shall be made in the number and class of shares
subject to the Plan and to any outstanding Awards, and in the exercise or purchase price per share under any outstanding Award in order
to prevent dilution or enlargement of Participants’ rights under the Plan. For purposes of the foregoing, conversion of any convertible
securities of the Company shall not be treated as ―effected without receipt of consideration by the Company.‖ Any fractional share
resulting from an adjustment pursuant to this Section 4.3 shall be rounded down to the nearest whole number, and in no event may the
exercise or purchase price under any Award be decreased to an amount less than the par value, if any, of the stock subject to such Award.
The adjustments determined by the Committee pursuant to this Section 4.3 shall be final, binding and conclusive.

                                                                  9
5.    E LIGIBILITY AND A WARD L IMITATIONS .

      5.1 Persons Eligible for Awards. Awards may be granted only to Employees, Consultants and Directors. For purposes of the
foregoing sentence, ―Employees, ‖ ―Consultants‖and ―Directors‖ shall include prospective Employees, prospective Consultants and
prospective Directors to whom Awards are granted in connection with written offers of an employment or other service relationship with
the Participating Company Group; provided, however, that no Stock subject to any such Award shall vest, become exercisable or be
issued prior to the date on which such person commences Service.

     5.2 Participation. Awards are granted solely at the discretion of the Committee. Eligible persons may be granted more than one (1)
Award. However, eligibility in accordance with this Section shall not entitle any person to be granted an Award, or, having been granted
an Award, to be granted an additional Award.

     5.3 Incentive Stock Option Limitations.

          (a) Persons Eligible. An Incentive Stock Option may be granted only to a person who, on the effective date of grant, is an
     Employee of the Company, a Parent Corporation or a Subsidiary Corporation (each being an “ISO-Qualifying Corporation” ). Any
     person who is not an Employee of an ISO-Qualifying Corporation on the effective date of the grant of an Option to such person
     may be granted only a Nonstatutory Stock Option. An Incentive Stock Option granted to a prospective Employee upon the
     condition that such person become an Employee of an ISO-Qualifying Corporation shall be deemed granted effective on the date
     such person commences Service with an ISO-Qualifying Corporation, with an exercise price determined as of such date in
     accordance with Section 6.1.

           (b) Fair Market Value Limitation. To the extent that options designated as Incentive Stock Options (granted under all stock
     option plans of the Participating Company Group, including the Plan) become exercisable by a Participant for the first time during
     any calendar year for stock having a Fair Market Value greater than One Hundred Thousand Dollars ($100,000), the portion of such
     options which exceeds such amount shall be treated as Nonstatutory Stock Options. For purposes of this Section, options designated
     as Incentive Stock Options shall be taken into account in the order in which they were granted, and the Fair Market Value of stock
     shall be determined as of the time the option with respect to such stock is granted. If the Code is amended to provide for a different
     limitation from that set forth in this Section, such different limitation shall be deemed incorporated herein effective as of the date
     and with respect to such Options as required or permitted by such amendment to the Code. If an Option is treated as an Incentive
     Stock Option in part and as a Nonstatutory Stock Option in part by reason of the limitation set forth in this Section, the Participant
     may designate which portion of such Option the Participant is exercising. In the absence of such designation, the Participant shall be
     deemed to have exercised the Incentive Stock Option portion of the Option first. Upon exercise, shares issued pursuant to each such
     portion shall be separately identified.

                                                                10
6.    T ERMS AND C ONDITIONS OF O PTIONS .

      Options shall be evidenced by Award Agreements specifying the number of shares of Stock covered thereby, in such form as the
Committee shall from time to time establish. No Option or purported Option shall be a valid and binding obligation of the Company
unless evidenced by a fully executed Award Agreement. Award Agreements evidencing Options may incorporate all or any of the terms
of the Plan by reference and shall comply with and be subject to the following terms and conditions:

      6.1 Exercise Price. The exercise price for each Option shall be established in the discretion of the Committee; provided, however,
that (a) the exercise price per share shall be not less than the Fair Market Value of a share of Stock on the effective date of grant of the
Option and (b) no Incentive Stock Option granted to a Ten Percent Owner shall have an exercise price per share less than one hundred ten
percent (110%) of the Fair Market Value of a share of Stock on the effective date of grant of the Option. Notwithstanding the foregoing,
an Option (whether an Incentive Stock Option or a Nonstatutory Stock Option) may be granted with an exercise price lower than the
minimum exercise price set forth above if such Option is granted pursuant to an assumption or substitution for another option in a manner
qualifying under the provisions of Section 424(a) of the Code.

       6.2 Exercisability and Term of Options. Options shall be exercisable at such time or times, or upon such event or events, and
subject to such terms, conditions, performance criteria and restrictions as shall be determined by the Committee and set forth in the
Award Agreement evidencing such Option; provided, however, that (a) no Option shall be exercisable after the expiration of ten (10)
years after the effective date of grant of such Option, (b) no Incentive Stock Option granted to a Ten Percent Owner shall be exercisable
after the expiration of five (5) years after the effective date of grant of such Option, and (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.
Subject to the foregoing, unless otherwise specified by the Committee in the grant of an Option, any Option granted hereunder shall
terminate ten (10) years after the effective date of grant of the Option, unless earlier terminated in accordance with its provisions.

     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 in cash equivalent, (ii) by tender to
     the Company, or attestation to the ownership, of shares of Stock owned by the Participant having a Fair Market Value not less than
     the exercise price, (iii) by delivery of a properly executed notice of exercise together with irrevocable instructions to a broker
     providing for the assignment to the Company 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 such other consideration as may be approved by the Committee from time to time to the extent permitted by applicable
     law, or (v) by any combination thereof. The Committee may at any time or from time

                                                                  11
to time 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 Committee, 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 Participant for more than six (6) months (and not used for
       another Option exercise by attestation during such period) 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, including with respect to one or more Participants specified by the Company notwithstanding that such
       program or procedures may be available to other Participants.

6.4 Effect of Termination of Service.

      (a) Option Exercisability. Subject to earlier termination of the Option as otherwise provided herein and unless otherwise
provided by the Committee in the grant of an Option and set forth in the Award Agreement, an Option shall be exercisable after a
Participant’s termination of Service only during the applicable time period determined in accordance with this Section and
thereafter shall terminate:

             (i) Disability. If the Participant’s Service terminates because of the Disability of the Participant, the Option, to the
       extent unexercised and exercisable on the date on which the Participant’s Service terminated, may be exercised by the
       Participant (or the Participant’s guardian or legal representative) at any time prior to the expiration of twelve (12) months (or
       such longer period of time as determined by the Board, in its discretion) after the date on which the Participant’s Service
       terminated, but in any event no later than the date of expiration of the Option’s term as set forth in the Award Agreement
       evidencing such Option (the “Option Expiration Date ” ).

             (ii) Death. If the Participant’s Service terminates because of the death of the Participant, the Option, to the extent
       unexercised and exercisable on the date on which the Participant’s Service terminated, may be exercised by the Participant’s
       legal representative or other person who acquired the right to exercise the Option by reason of the Participant’s death at any
       time prior to the expiration of twelve (12) months (or such longer period of time as determined by the Board, in its
       discretion) after the date on which the Participant’s Service terminated, but in any event no later than the Option Expiration
       Date. The Participant’s Service shall be deemed to have terminated on account of death if the Participant dies within three
       (3) months (or such longer period of time as determined by the Board, in its discretion) after the Participant’s termination of
       Service.

                                                            12
                  (iii) Termination for Cause. Notwithstanding any other provision of the Plan to the contrary, if the Participant’s
             Service is terminated for Cause, the Option shall terminate and cease to be exercisable immediately upon such termination of
             Service.

                   (iv) Other Termination of Service. If the Participant’s Service terminates for any reason, except Disability, death or
             Cause, the Option, to the extent unexercised and exercisable by the Participant on the date on which the Participant’s Service
             terminated, may be exercised by the Participant at any time prior to the expiration of three (3) months (or such longer period
             of time as determined by the Board, in its discretion) after the date on which the Participant’s Service terminated, but in any
             event no later than the Option Expiration Date.

           (b) Extension if Exercise Prevented by Law. Notwithstanding the foregoing, other than termination of Service for Cause, if
     the exercise of an Option within the applicable time periods set forth in Section 6.4(a) is prevented by the provisions of Section 14
     below, the Option shall remain exercisable until three (3) months (or such longer period of time as determined by the Board, in its
     discretion) after the date the Participant is notified by the Company that the Option is exercisable, but in any event no later than the
     Option Expiration Date.

           (c) Extension if Participant Subject to Section 16(b). Notwithstanding the foregoing, other than termination of Service for
     Cause, if a sale within the applicable time periods set forth in Section 6.4(a) of shares acquired upon the exercise of the Option
     would subject the Participant to suit under Section 16(b) of the Exchange Act, the Option shall remain exercisable until the earliest
     to occur of (i) the tenth (10th) day following the date on which a sale of such shares by the Participant would no longer be subject to
     such suit, (ii) the one hundred and ninetieth (190th) day after the Participant’s termination of Service, or (iii) the Option Expiration
     Date.

      6.5 Transferability of Options. During the lifetime of the Participant, an Option shall be exercisable only by the Participant or the
Participant’s guardian or legal representative. Prior to the issuance of shares of Stock upon the exercise of an Option, the Option shall not
be subject in any manner to anticipation, alienation, sale, exchange, transfer, assignment, pledge, encumbrance, or garnishment by
creditors of the Participant or the Participant’s beneficiary, except transfer by will or by the laws of descent and distribution.
Notwithstanding the foregoing, to the extent permitted by the Committee, in its discretion, and set forth in the Award Agreement
evidencing such Option, a Nonstatutory Stock Option shall be assignable or transferable subject to the applicable limitations, if any,
described in the General Instructions to Form S-8 Registration Statement under the Securities Act.

7.    T ERMS AND C ONDITIONS OF S TOCK A PPRECIATION R IGHTS .

      Stock Appreciation Rights shall be evidenced by Award Agreements specifying the number of shares of Stock subject to the Award,
in such form as the Committee shall from time to time establish. No SAR or purported SAR shall be a valid and binding obligation of the

                                                                  13
Company unless evidenced by a fully executed Award Agreement. Award Agreements evidencing SARs may incorporate all or any of
the terms of the Plan by reference and shall comply with and be subject to the following terms and conditions:

      7.1 Types of SARs Authorized. SARs may be granted in tandem with all or any portion of a related Option (a “Tandem SAR” ) or
may be granted independently of any Option (a “Freestanding SAR” ). A Tandem SAR may be granted either concurrently with the
grant of the related Option or at any time thereafter prior to the complete exercise, termination, expiration or cancellation of such related
Option.

      7.2 Exercise Price. The exercise price for each SAR shall be established in the discretion of the Committee; provided, however,
that (a) the exercise price per share subject to a Tandem SAR shall be the exercise price per share under the related Option and (b) the
exercise price per share subject to a Freestanding SAR shall be not less than the Fair Market Value of a share of Stock on the effective
date of grant of the SAR.

     7.3 Exercisability and Term of SARs.

           (a) Tandem SARs. Tandem SARs shall be exercisable only at the time and to the extent, and only to the extent, that the
     related Option is exercisable, subject to such provisions as the Committee may specify where the Tandem SAR is granted with
     respect to less than the full number of shares of Stock subject to the related Option. The Committee may, in its discretion, provide in
     any Award Agreement evidencing a Tandem SAR that such SAR may not be exercised without the advance approval of the
     Company and, if such approval is not given, then the Option shall nevertheless remain exercisable in accordance with its terms. A
     Tandem SAR shall terminate and cease to be exercisable no later than the date on which the related Option expires or is terminated
     or canceled. Upon the exercise of a Tandem SAR with respect to some or all of the shares subject to such SAR, the related Option
     shall be canceled automatically as to the number of shares with respect to which the Tandem SAR was exercised. Upon the exercise
     of an Option related to a Tandem SAR as to some or all of the shares subject to such Option, the related Tandem SAR shall be
     canceled automatically as to the number of shares with respect to which the related Option was exercised.

           (b) Freestanding SARs. Freestanding SARs shall be exercisable at such time or times, or upon such event or events, and
     subject to such terms, conditions, performance criteria and restrictions as shall be determined by the Committee and set forth in the
     Award Agreement evidencing such SAR; provided, however, that no Freestanding SAR shall be exercisable after the expiration of
     ten (10) years after the effective date of grant of such SAR.

       7.4 Exercise of SARs. Upon the exercise (or deemed exercise pursuant to Section 7.5) of an SAR, the Participant (or the
Participant’s legal representative or other person who acquired the right to exercise the SAR by reason of the Participant’s death) shall be
entitled to receive payment of an amount for each share with respect to which the SAR is exercised equal to the excess, if any, of the Fair
Market Value of a share of Stock on the date of exercise of the SAR over the exercise price. Payment of such amount shall be made in
cash, shares of Stock, or any combination thereof as determined by the Committee. Unless otherwise provided in the Award Agreement
evidencing such SAR, payment shall be made in a lump sum as soon as

                                                                  14
practicable following the date of exercise of the SAR. The Award Agreement evidencing any SAR may provide for deferred payment in a
lump sum or in installments. When payment is to be made in shares of Stock, the number of shares to be issued shall be determined on
the basis of the Fair Market Value of a share of Stock on the date of exercise of the SAR. For purposes of Section 7, an SAR shall be
deemed exercised on the date on which the Company receives notice of exercise from the Participant.

      7.5 Deemed Exercise of SARs. If, on the date on which an SAR would otherwise terminate or expire, the SAR by its terms remains
exercisable immediately prior to such termination or expiration and, if so exercised, would result in a payment to the holder of such SAR,
then any portion of such SAR which has not previously been exercised shall automatically be deemed to be exercised as of such date with
respect to such portion.

       7.6 Effect of Termination of Service. Subject to earlier termination of the SAR as otherwise provided herein and unless otherwise
provided by the Committee in the grant of an SAR and set forth in the Award Agreement, an SAR shall be exercisable after a
Participant’s termination of Service only during the applicable time period determined in accordance with Section 6.4 (treating the SAR
as if it were an Option) and thereafter shall terminate.

      7.7 Nontransferability of SARs. During the lifetime of the Participant, an SAR shall be exercisable only by the Participant or the
Participant’s guardian or legal representative. Prior to the exercise of an SAR, the SAR shall not be subject in any manner to anticipation,
alienation, sale, exchange, transfer, assignment, pledge, encumbrance, or garnishment by creditors of the Participant or the Participant’s
beneficiary, except transfer by will or by the laws of descent and distribution.

8.    T ERMS AND C ONDITIONS OF R ESTRICTED S TOCK A WARDS .

      Restricted Stock Awards shall be evidenced by Award Agreements specifying whether the Award is a Restricted Stock Bonus or a
Restricted Stock Purchase Right and the number of shares of Stock subject to the Award, in such form as the Committee shall from time
to time establish. No Restricted Stock Award or purported Restricted Stock Award shall be a valid and binding obligation of the
Company unless evidenced by a fully executed Award Agreement. Award Agreements evidencing Restricted Stock Awards may
incorporate all or any of the terms of the Plan by reference and shall comply with and be subject to the following terms and conditions:

      8.1 Types of Restricted Stock Awards Authorized. Restricted Stock Awards may be in the form of either a Restricted Stock
Bonus or a Restricted Stock Purchase Right. Restricted Stock Awards may be granted upon such conditions as the Committee shall
determine, including, without limitation, upon the attainment of one or more Performance Goals described in Section 9.4. If either the
grant of a Restricted Stock Award or the lapsing of the Restriction Period is to be contingent upon the attainment of one or more
Performance Goals, the Committee shall follow procedures substantially equivalent to those set forth in Sections 9.3 through 9.5(a).

                                                                  15
      8.2 Purchase Price. The purchase price for shares of Stock issuable under each Restricted Stock Purchase Right shall be
established by the Committee in its discretion. No monetary payment (other than applicable tax withholding) shall be required as a
condition of receiving shares of Stock pursuant to a Restricted Stock Bonus, the consideration for which shall be services actually
rendered to a Participating Company or for its benefit. Notwithstanding the foregoing, the Participant shall furnish consideration in the
form of cash or past services rendered to a Participating Company or for its benefit having a value not less than the par value of the shares
of Stock subject to such Restricted Stock Award.

       8.3 Purchase Period. A Restricted Stock Purchase Right shall be exercisable within a period established by the Committee, which
shall in no event exceed thirty (30) days from the effective date of the grant of the Restricted Stock Purchase Right; provided, however,
that no Restricted Stock Purchase Right granted to a prospective Employee, prospective Consultant or prospective Director may become
exercisable prior to the date on which such person commences Service.

       8.4 Payment of Purchase Price. Except as otherwise provided below, payment of the purchase price for the number of shares of
Stock being purchased pursuant to any Restricted Stock Purchase Right shall be made (a) in cash, by check, or in cash equivalent, (b) by
such other consideration as may be approved by the Committee from time to time to the extent permitted by applicable law, or (iii) by any
combination thereof. The Committee may at any time or from time to time grant Restricted Stock Purchase Rights which do not permit all
of the foregoing forms of consideration to be used in payment of the purchase price or which otherwise restrict one or more forms of
consideration. Restricted Stock Bonuses shall be issued in consideration for past services actually rendered to a Participating Company or
for its benefit.

      8.5 Vesting and Restrictions on Transfer. Shares issued pursuant to any Restricted Stock Award may or may not be made subject
to Vesting Conditions based upon the satisfaction of such Service requirements, conditions, restrictions or performance criteria,
including, without limitation, Performance Goals as described in Section 9.4, as shall be established by the Committee and set forth in the
Award Agreement evidencing such Award. During any Restriction Period in which shares acquired pursuant to a Restricted Stock Award
remain subject to Vesting Conditions, such shares may not be sold, exchanged, transferred, pledged, assigned or otherwise disposed of
other than pursuant to an Ownership Change Event, as defined in Section 13.1, or as provided in Section 8.8. Upon request by the
Company, each Participant shall execute any agreement evidencing such transfer restrictions prior to the receipt of shares of Stock
hereunder and shall promptly present to the Company any and all certificates representing shares of Stock acquired hereunder for the
placement on such certificates of appropriate legends evidencing any such transfer restrictions.

      8.6 Voting Rights; Dividends and Distributions. Except as provided in this Section, Section 8.5 and any Award Agreement,
during the Restriction Period applicable to shares subject to a Restricted Stock Award, the Participant shall have all of the rights of a
stockholder of the Company holding shares of Stock, including the right to vote such shares and to receive all dividends and other
distributions paid with respect to such shares. However, in the event of a dividend or distribution paid in shares of Stock or any other
adjustment made upon a change in the capital structure of the Company as described in Section 4.3, then any and all new,

                                                                   16
substituted or additional securities or other property (other than normal cash dividends) to which the Participant is entitled by reason of
the Participant’s Restricted Stock Award shall be immediately subject to the same Vesting Conditions as the shares subject to the
Restricted Stock Award with respect to which such dividends or distributions were paid or adjustments were made.

      8.7 Effect of Termination of Service. Unless otherwise provided by the Committee in the grant of a Restricted Stock Award and
set forth in the Award Agreement, if a Participant’s Service terminates for any reason, whether voluntary or involuntary (including the
Participant’s death or disability), then (a) the Company shall have the option to repurchase for the purchase price paid by the Participant
any shares acquired by the Participant pursuant to a Restricted Stock Purchase Right which remain subject to Vesting Conditions as of the
date of the Participant’s termination of Service and (b) the Participant shall forfeit to the Company any shares acquired by the Participant
pursuant to a Restricted Stock Bonus which remain subject to Vesting Conditions as of the date of the Participant’s termination of
Service. The Company shall have the right to assign at any time any repurchase right it may have, whether or not such right is then
exercisable, to one or more persons as may be selected by the Company.

      8.8 Nontransferability of Restricted Stock Award Rights. Prior to the issuance of shares of Stock pursuant to a Restricted Stock
Award, rights to acquire such shares shall not be subject in any manner to anticipation, alienation, sale, exchange, transfer, assignment,
pledge, encumbrance or garnishment by creditors of the Participant or the Participant’s beneficiary, except transfer by will or the laws of
descent and distribution. All rights with respect to a Restricted Stock Award granted to a Participant hereunder shall be exercisable during
his or her lifetime only by such Participant or the Participant’s guardian or legal representative.

9.    T ERMS AND C ONDITIONS OF P ERFORMANCE A WARDS .

      Performance Awards shall be evidenced by Award Agreements in such form as the Committee shall from time to time establish. No
Performance Award or purported Performance Award shall be a valid and binding obligation of the Company unless evidenced by a fully
executed Award Agreement. Award Agreements evidencing Performance Awards may incorporate all or any of the terms of the Plan by
reference and shall comply with and be subject to the following terms and conditions:

     9.1 Types of Performance Awards Authorized. Performance Awards may be in the form of either Performance Shares or
Performance Units. Each Award Agreement evidencing a Performance Award shall specify the number of Performance Shares or
Performance Units subject thereto, the Performance Award Formula, the Performance Goal(s) and Performance Period applicable to the
Award, and the other terms, conditions and restrictions of the Award.

      9.2 Initial Value of Performance Shares and Performance Units. Unless otherwise provided by the Committee in granting a
Performance Award, each Performance Share shall have an initial value equal to the Fair Market Value of one (1) share of Stock, subject
to adjustment as provided in Section 4.3, on the effective date of grant of the Performance Share,

                                                                  17
and each Performance Unit shall have an initial value of one hundred dollars ($100). The final value payable to the Participant in
settlement of a Performance Award determined on the basis of the applicable Performance Award Formula will depend on the extent to
which Performance Goals established by the Committee are attained within the applicable Performance Period established by the
Committee.

      9.3 Establishment of Performance Period, Performance Goals and Performance Award Formula. In granting each
Performance Award, the Committee shall establish in writing the applicable Performance Period, Performance Award Formula and one or
more Performance Goals which, when measured at the end of the Performance Period, shall determine on the basis of the Performance
Award Formula the final value of the Performance Award to be paid to the Participant. Unless otherwise permitted in compliance with
the requirements under Section 162(m) with respect to ―performance-based compensation,‖ the Committee shall establish the
Performance Goal(s) and Performance Award Formula applicable to each Performance Award no later than the earlier of (a) the date
ninety (90) days after the commencement of the applicable Performance Period or (b) the date on which 25% of the Performance Period
has elapsed, and, in any event, at a time when the outcome of the Performance Goals remains substantially uncertain. Once established,
the Performance Goals and Performance Award Formula shall not be changed during the Performance Period. The Company shall notify
each Participant granted a Performance Award of the terms of such Award, including the Performance Period, Performance Goal(s) and
Performance Award Formula.

      9.4 Measurement of Performance Goals. Performance Goals shall be established by the Committee on the basis of targets to be
attained ( “Performance Targets” ) with respect to one or more measures of business or financial performance (each, a “Performance
Measure” ), subject to the following:

           (a) Performance Measures. Performance Measures shall have the same meanings as used in the Company’s financial
     statements, or, if such terms are not used in the Company’s financial statements, they shall have the meaning applied pursuant to
     generally accepted accounting principles, or as used generally in the Company’s industry. Performance Measures shall be calculated
     with respect to the Company and each Subsidiary Corporation consolidated therewith for financial reporting purposes or such
     division or other business unit as may be selected by the Committee. For purposes of the Plan, the Performance Measures applicable
     to a Performance Award shall be calculated in accordance with generally accepted accounting principles, but prior to the accrual or
     payment of any Performance Award for the same Performance Period and excluding the effect (whether positive or negative) of any
     change in accounting standards or any extraordinary, unusual or nonrecurring item, as determined by the Committee, occurring after
     the establishment of the Performance Goals applicable to the Performance Award. Performance Measures may be one or more of
     the following, as determined by the Committee:

                  (i) revenue;

                  (ii) gross margin;

                                                               18
            (iii) operating margin;

            (iv) operating income;

            (v) pre-tax profit;

            (vi) earnings before interest, taxes and depreciation;

            (vii) net income;

            (viii) cash flow;

            (ix) expenses;

            (x) the market price of the Stock;

            (xi) earnings per share;

            (xii) return on stockholder equity;

            (xiii) return on capital;

            (xiv) return on net assets;

            (xv) economic value added;

            (xvi) number of customers; and

            (xvii) market share.

      (b) Performance Targets. Performance Targets may include a minimum, maximum, target level and intermediate levels of
performance, with the final value of a Performance Award determined under the applicable Performance Award Formula by the
level attained during the applicable Performance Period. A Performance Target may be stated as an absolute value or as a value
determined relative to a standard selected by the Committee.

9.5 Settlement of Performance Awards.

      (a) Determination of Final Value. As soon as practicable following the completion of the Performance Period applicable to a
Performance Award, the Committee shall certify in writing the extent to which the applicable Performance Goals have been
attained and the resulting final value of the Award earned by the Participant and to be paid upon its settlement in accordance with
the applicable Performance Award Formula.

      (b) Discretionary Adjustment of Award Formula. In its discretion, the Committee may, either at the time it grants a
Performance Award or at any time thereafter, provide for the positive or negative adjustment of the Performance Award Formula
applicable to a Performance Award granted to any Participant who is not a ―covered employee‖ within the meaning of Section
162(m) (a “Covered Employee” ) to reflect such Participant’s individual

                                                            19
     performance in his or her position with the Company or such other factors as the Committee may determine. If permitted under a
     Covered Employee’s Award Agreement, the Committee shall have the discretion, on the basis of such criteria as may be established
     by the Committee, to reduce some or all of the value of the Performance Award that would otherwise be paid to the Covered
     Employee upon its settlement notwithstanding the attainment of any Performance Goal and the resulting value of the Performance
     Award determined in accordance with the Performance Award Formula. No such reduction may result in an increase in the amount
     payable upon settlement of another Participant’s Performance Award.

           (c) Effect of Leaves of Absence. Unless otherwise required by law, payment of the final value, if any, of a Performance
     Award held by a Participant who has taken in excess of thirty (30) days in leaves of absence during a Performance Period shall be
     prorated on the basis of the number of days of the Participant’s Service during the Performance Period during which the Participant
     was not on a leave of absence.

           (d) Notice to Participants. As soon as practicable following the Committee’s determination and certification in accordance
     with Sections 9.5(a) and (b), the Company shall notify each Participant of the determination of the Committee.

            (e) Payment in Settlement of Performance Awards. As soon as practicable following the Committee’s determination and
     certification in accordance with Sections 9.5(a) and (b), payment shall be made to each eligible Participant (or such Participant’s
     legal representative or other person who acquired the right to receive such payment by reason of the Participant’s death) of the final
     value of the Participant’s Performance Award. Payment of such amount shall be made in cash, shares of Stock, or a combination
     thereof as determined by the Committee. Unless otherwise provided in the Award Agreement evidencing a Performance Award,
     payment shall be made in a lump sum. An Award Agreement may provide for deferred payment in a lump sum or in installments. If
     any payment is to be made on a deferred basis, the Committee may, but shall not be obligated to, provide for the payment during the
     deferral period of Dividend Equivalents or interest.

           (f) Provisions Applicable to Payment in Shares. If payment is to be made in shares of Stock, the number of such shares shall
     be determined by dividing the final value of the Performance Award by the value of a share of Stock determined by the method
     specified in the Award Agreement. Such methods may include, without limitation, the closing market price on a specified date
     (such as the settlement date) or an average of market prices over a series of trading days. Shares of Stock issued in payment of any
     Performance Award may be fully vested and freely transferable shares or may be shares of Stock subject to Vesting Conditions as
     provided in Section 8.5. Any shares subject to Vesting Conditions shall be evidenced by an appropriate Award Agreement and shall
     be subject to the provisions of Sections 8.5 through 8.8 above.

      9.6 Voting Rights; Dividend Equivalent Rights and Distributions. Participants shall have no voting rights with respect to shares
of Stock represented by Performance Share Awards until the date of the issuance of such shares, if any (as evidenced by the appropriate
entry on the books of the Company or of a duly authorized transfer agent of the Company). However, the Committee, in its discretion,
may provide in the Award Agreement

                                                                 20
evidencing any Performance Share Award that the Participant shall be entitled to receive Dividend Equivalents with respect to the
payment of cash dividends on Stock having a record date prior to the date on which the Performance Shares are settled or forfeited. Such
Dividend Equivalents, if any, shall be credited to the Participant in the form of additional whole Performance Shares as of the date of
payment of such cash dividends on Stock. The number of additional Performance Shares (rounded to the nearest whole number) to be so
credited shall be determined by dividing (a) the amount of cash dividends paid on such date with respect to the number of shares of Stock
represented by the Performance Shares previously credited to the Participant by (b) the Fair Market Value per share of Stock on such
date. Dividend Equivalents may be paid currently or may be accumulated and paid to the extent that Performance Shares become
nonforfeitable, as determined by the Committee. Settlement of Dividend Equivalents may be made in cash, shares of Stock, or a
combination thereof as determined by the Committee, and may be paid on the same basis as settlement of the related Performance Share
as provided in Section 9.5. Dividend Equivalents shall not be paid with respect to Performance Units. In the event of a dividend or
distribution paid in shares of Stock or any other adjustment made upon a change in the capital structure of the Company as described in
Section 4.3, appropriate adjustments shall be made in the Participant’s Performance Share Award so that it represents the right to receive
upon settlement any and all new, substituted or additional securities or other property (other than normal cash dividends) to which the
Participant would entitled by reason of the shares of Stock issuable upon settlement of the Performance Share Award, and all such new,
substituted or additional securities or other property shall be immediately subject to the same Performance Goals as are applicable to the
Award.

      9.7 Effect of Termination of Service. Unless otherwise provided by the Committee in the grant of a Performance Award and set
forth in the Award Agreement, the effect of a Participant’s termination of Service on the Performance Award shall be as follows:

           (a) Death or Disability. If the Participant’s Service terminates because of the death or Disability of the Participant before the
     completion of the Performance Period applicable to the Performance Award, the final value of the Participant’s Performance Award
     shall be determined by the extent to which the applicable Performance Goals have been attained with respect to the entire
     Performance Period and shall be prorated based on the number of months of the Participant’s Service during the Performance
     Period. Payment shall be made following the end of the Performance Period in any manner permitted by Section 9.5.

          (b) Other Termination of Service. If the Participant’s Service terminates for any reason except death or Disability before the
     completion of the Performance Period applicable to the Performance Award, such Award shall be forfeited in its entirety; provided,
     however, that in the event of an involuntary termination of the Participant’s Service, the Committee, in its sole discretion, may
     waive the automatic forfeiture of all or any portion of any such Award.

      9.8 Nontransferability of Performance Awards. Prior to settlement in accordance with the provisions of the Plan, no Performance
Award shall be subject in any manner to anticipation, alienation, sale, exchange, transfer, assignment, pledge, encumbrance, or
garnishment by creditors of the Participant or the Participant’s beneficiary, except transfer by will or by the laws of descent and
distribution. All rights with respect to a Performance Award

                                                                 21
granted to a Participant hereunder shall be exercisable during his or her lifetime only by such Participant or the Participant’s guardian or
legal representative.

10.   T ERMS AND C ONDITIONS OF R ESTRICTED S TOCK U NIT A WARDS .

      Restricted Stock Unit Awards shall be evidenced by Award Agreements specifying the number of Restricted Stock Units subject to
the Award, in such form as the Committee shall from time to time establish. No Restricted Stock Unit Award or purported Restricted
Stock Unit Award shall be a valid and binding obligation of the Company unless evidenced by a fully executed Award Agreement.
Award Agreements evidencing Restricted Stock Units may incorporate all or any of the terms of the Plan by reference and shall comply
with and be subject to the following terms and conditions:

       10.1 Grant of Restricted Stock Unit Awards. Restricted Stock Unit Awards may be granted upon such conditions as the
Committee shall determine, including, without limitation, upon the attainment of one or more Performance Goals described in Section
9.4. If either the grant of a Restricted Stock Unit Award or the Vesting Conditions with respect to such Award is to be contingent upon
the attainment of one or more Performance Goals, the Committee shall follow procedures substantially equivalent to those set forth in
Sections 9.3 through 9.5(a).

       10.2 Purchase Price. No monetary payment (other than applicable tax withholding, if any) shall be required as a condition of
receiving a Restricted Stock Unit Award, the consideration for which shall be services actually rendered to a Participating Company or
for its benefit.

      10.3 Vesting. Restricted Stock Units may or may not be made subject to Vesting Conditions based upon the satisfaction of such
Service requirements, conditions, restrictions or performance criteria, including, without limitation, Performance Goals as described in
Section 9.4, as shall be established by the Committee and set forth in the Award Agreement evidencing such Award.

      10.4 Voting Rights, Dividend Equivalent Rights and Distributions. Participants shall have no voting rights with respect to shares
of Stock represented by Restricted Stock Units until the date of the issuance of such shares (as evidenced by the appropriate entry on the
books of the Company or of a duly authorized transfer agent of the Company). However, the Committee, in its discretion, may provide in
the Award Agreement evidencing any Restricted Stock Unit Award that the Participant shall be entitled to receive Dividend Equivalents
with respect to the payment of cash dividends on Stock having a record date prior to date on which Restricted Stock Units held by such
Participant are settled. Such Dividend Equivalents, if any, shall be paid by crediting the Participant with additional whole Restricted
Stock Units as of the date of payment of such cash dividends on Stock. The number of additional Restricted Stock Units (rounded to the
nearest whole number) to be so credited shall be determined by dividing (a) the amount of cash dividends paid on such date with respect
to the number of shares of Stock represented by the Restricted Stock Units previously credited to the Participant by (b) the Fair Market
Value per share of Stock on such date. Such additional Restricted Stock Units shall be subject to the same terms and conditions and shall
be settled in the same manner and at the same

                                                                  22
time (or as soon thereafter as practicable) as the Restricted Stock Units originally subject to the Restricted Stock Unit Award. In the event
of a dividend or distribution paid in shares of Stock or any other adjustment made upon a change in the capital structure of the Company
as described in Section 4.3, appropriate adjustments shall be made in the Participant’s Restricted Stock Unit Award so that it represents
the right to receive upon settlement any and all new, substituted or additional securities or other property (other than normal cash
dividends) to which the Participant would entitled by reason of the shares of Stock issuable upon settlement of the Award, and all such
new, substituted or additional securities or other property shall be immediately subject to the same Vesting Conditions as are applicable
to the Award.

      10.5 Effect of Termination of Service. Unless otherwise provided by the Committee in the grant of a Restricted Stock Unit Award
and set forth in the Award Agreement, if a Participant’s Service terminates for any reason, whether voluntary or involuntary (including
the Participant’s death or disability), then the Participant shall forfeit to the Company any Restricted Stock Units pursuant to the Award
which remain subject to Vesting Conditions as of the date of the Participant’s termination of Service.

      10.6 Settlement of Restricted Stock Unit Awards. The Company shall issue to a Participant on the date on which Restricted Stock
Units subject to the Participant’s Restricted Stock Unit Award vest or on such other date determined by the Committee, in its discretion,
and set forth in the Award Agreement one (1) share of Stock (and/or any other new, substituted or additional securities or other property
pursuant to an adjustment described in Section 10.4) for each Restricted Stock Unit then becoming vested or otherwise to be settled on
such date, subject to the withholding of applicable taxes. Notwithstanding the foregoing, if permitted by the Committee and set forth in
the Award Agreement, the Participant may elect in accordance with terms specified in the Award Agreement to defer receipt of all or any
portion of the shares of Stock or other property otherwise issuable to the Participant pursuant to this Section.

     10.7 Nontransferability of Restricted Stock Unit Awards. Prior to the issuance of shares of Stock in settlement of a Restricted
Stock Unit Award, the Award shall not be subject in any manner to anticipation, alienation, sale, exchange, transfer, assignment, pledge,
encumbrance, or garnishment by creditors of the Participant or the Participant’s beneficiary, except transfer by will or by the laws of
descent and distribution. All rights with respect to a Restricted Stock Unit Award granted to a Participant hereunder shall be exercisable
during his or her lifetime only by such Participant or the Participant’s guardian or legal representative.

11.   D EFERRED C OMPENSATION A WARDS .

     11.1 Establishment of Deferred Compensation Award Programs. This Section 11 shall not be effective unless and until the
Committee determines to establish a program pursuant to this Section. The Committee, in its discretion and upon such terms and
conditions as it may determine, may establish one or more programs pursuant to the Plan under which:

          (a) Participants designated by the Committee who are Insiders or otherwise among a select group of highly compensated
      Employees may irrevocably elect, prior

                                                                  23
to a date specified by the Committee, to reduce such Participant’s compensation otherwise payable in cash (subject to any minimum or
maximum reductions imposed by the Committee) and to be granted automatically at such time or times as specified by the Committee
one or more Awards of Stock Units with respect to such numbers of shares of Stock as determined in accordance with the rules of the
program established by the Committee and having such other terms and conditions as established by the Committee.

           (b) Participants designated by the Committee who are Insiders or otherwise among a select group of highly compensated
     Employees may irrevocably elect, prior to a date specified by the Committee, to be granted automatically an Award of Stock Units
     with respect to such number of shares of Stock and upon such other terms and conditions as established by the Committee in lieu of:

                  (i) shares of Stock otherwise issuable to such Participant upon the exercise of an Option;

                  (ii) cash or shares of Stock otherwise issuable to such Participant upon the exercise of an SAR; or

                  (iii) cash or shares of Stock otherwise issuable to such Participant upon the settlement of a Performance Award.

      11.2 Terms and Conditions of Deferred Compensation Awards. Deferred Compensation Awards granted pursuant to this
Section 11 shall be evidenced by Award Agreements in such form as the Committee shall from time to time establish. No such Deferred
Compensation Award or purported Deferred Compensation Award shall be a valid and binding obligation of the Company unless
evidenced by a fully executed Award Agreement. Award Agreements evidencing Deferred Compensation Awards may incorporate all or
any of the terms of the Plan by reference and shall comply with and be subject to the following terms and conditions:

           (a) Vesting Conditions . Deferred Compensation Awards shall not be subject to any vesting conditions.

           (b) Terms and Conditions of Stock Units .

                  (i) Voting Rights; Dividend Equivalent Rights and Distributions. Participants shall have no voting rights with
            respect to shares of Stock represented by Stock Units until the date of the issuance of such shares (as evidenced by the
            appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company). However, a
            Participant shall be entitled to receive Dividend Equivalents with respect to the payment of cash dividends on Stock having a
            record date prior to date on which Stock Units held by such Participant are settled. Such Dividend Equivalents shall be paid
            by crediting the Participant with additional whole and/or fractional Stock Units as of the date of payment of such cash
            dividends on Stock. The method of determining the number of additional Stock Units to be so credited shall be specified by
            the Committee and set forth in the Award Agreement. Such additional Stock Units shall be subject to the same terms and
            conditions and shall be settled in the same manner and at the same time (or as soon thereafter as practicable) as the Stock
            Units

                                                                 24
           originally subject to the Stock Unit Award. In the event of a dividend or distribution paid in shares of Stock or any other
           adjustment made upon a change in the capital structure of the Company as described in Section 4.3, appropriate adjustments
           shall be made in the Participant’s Stock Unit Award so that it represent the right to receive upon settlement any and all new,
           substituted or additional securities or other property (other than normal cash dividends) to which the Participant would
           entitled by reason of the shares of Stock issuable upon settlement of the Award.

                   (ii) Settlement of Stock Unit Awards. A Participant electing to receive an Award of Stock Units pursuant to this
             Section 11, shall specify at the time of such election a settlement date with respect to such Award. The Company shall issue
             to the Participant as soon as practicable following the earlier of the settlement date elected by the Participant or the date of
             termination of the Participant’s Service, a number of whole shares of Stock equal to the number of whole Stock Units
             subject to the Stock Unit Award. Such shares of Stock shall be fully vested, and the Participant shall not be required to pay
             any additional consideration (other than applicable tax withholding) to acquire such shares. Any fractional Stock Unit
             subject to the Stock Unit Award shall be settled by the Company by payment in cash of an amount equal to the Fair Market
             Value as of the payment date of such fractional share.

                  (iii) Nontransferability of Stock Unit Awards. Prior to their settlement in accordance with the provision of the Plan,
             no Stock Unit Award shall be subject in any manner to anticipation, alienation, sale, exchange, transfer, assignment, pledge,
             encumbrance, or garnishment by creditors of the Participant or the Participant’s beneficiary, except transfer by will or by the
             laws of descent and distribution. All rights with respect to a Stock Unit Award granted to a Participant hereunder shall be
             exercisable during his or her lifetime only by such Participant or the Participant’s guardian or legal representative.

12.   S TANDARD F ORMS OF A WARD A GREEMENT .

     12.1 Award Agreements. Each Award shall comply with and be subject to the terms and conditions set forth in the appropriate
form of Award Agreement approved by the Committee and as amended from time to time. Any Award Agreement may consist of an
appropriate form of Notice of Grant and a form of Agreement incorporated therein by reference, or such other form or forms as the
Committee may approve from time to time.

     12.2 Authority to Vary Terms. The Committee shall have the authority from time to time to vary the terms of any standard form
of Award Agreement either in connection with the grant or amendment of an individual Award or in connection with the authorization of
a new standard form or forms; provided, however, that the terms and conditions of any such new, revised or amended standard form or
forms of Award Agreement are not inconsistent with the terms of the Plan.

13.   C HANGE IN C ONTROL .

      13.1 Definitions.

          (a) An “Ownership Change Event ” shall be deemed to have occurred if any of the following occurs with respect to the
      Company: (i) the direct or indirect sale or

                                                                  25
exchange in a single or series of related transactions by the stockholders of the Company of more than fifty percent (50%) of the
voting stock of the Company; (ii) a merger or consolidation in which the Company is a party; (iii) the sale, exchange, or transfer of
all or substantially all of the assets of the Company (other than a sale, exchange or transfer to one or more subsidiaries of the
Company); or (iv) a liquidation or dissolution of the Company.

      (b) A “Change in Control ” shall mean an Ownership Change Event or series of related Ownership Change Events
(collectively, a “Transaction” ) in which the stockholders of the Company immediately before the Transaction do not retain
immediately after the Transaction, in substantially the same proportions as their ownership of shares of the Company’s voting stock
immediately before the Transaction, direct or indirect beneficial ownership of more than fifty percent (50%) of the total combined
voting power of the outstanding voting securities of the Company or, in the case of an Ownership Change Event described in
Section 13.1(a)(iii), the entity to which the assets of the Company were transferred (the “Transferee” ), as the case may be. For
purposes of the preceding sentence, indirect beneficial ownership shall include, without limitation, an interest resulting from
ownership of the voting securities of one or more corporations or other business entities which own the Company or the Transferee,
as the case may be, either directly or through one or more subsidiary corporations or other business entities. The Committee shall
have the right to determine whether multiple sales or exchanges of the voting securities of the Company or multiple Ownership
Change Events are related, and its determination shall be final, binding and conclusive.

13.2 Effect of Change in Control on Options and SARs.

      (a) Accelerated Vesting . Notwithstanding any other provision of the Plan to the contrary, the Committee, in its sole
discretion, may provide in any Award Agreement or, in the event of a Change in Control, may take such actions as it deems
appropriate to provide for the acceleration of the exercisability and vesting in connection with such Change in Control of any or all
outstanding Options and SARs and shares acquired upon the exercise of such Options and SARs upon such conditions and to such
extent as the Committee shall determine.

      (b) Assumption or Substitution . In the event of a Change in Control, the surviving, continuing, successor, or purchasing
entity or parent thereof, as the case may be (the “Acquiror ” ), may, without the consent of any Participant, either assume the
Company’s rights and obligations under outstanding Options and SARs or substitute for outstanding Options and SARs
substantially equivalent options and SARs (as the case may be) for the Acquiror’s stock. Any Options or SARs which are not
assumed by the Acquiror in connection with the Change in Control nor exercised as of the time of consummation of the Change in
Control shall terminate and cease to be outstanding effective as of the time of consummation of the Change in Control.

       (c) Cash-Out of Options . The Committee may, in its sole discretion and without the consent of any Participant, determine
that, upon the occurrence of a Change in Control, each or any Option or SAR outstanding immediately prior to the Change in
Control shall be canceled in exchange for a payment with respect to each vested share of Stock subject to such canceled Option or
SAR in (i) cash, (ii) stock of the Company or of a corporation or other business entity a party to the Change in Control, or (iii) other
property which, in any such case,

                                                             26
      shall be in an amount having a Fair Market Value equal to the excess of the Fair Market Value of the consideration to be paid per
      share of Stock in the Change in Control over the exercise price per share under such Option or SAR (the “ Spread ” ). In the event
      such determination is made by the Committee, the Spread (reduced by applicable withholding taxes, if any) shall be paid to
      Participants in respect of their canceled Options and SARs as soon as practicable following the date of the Change in Control.

      13.3 Effect of Change in Control on Restricted Stock Awards. The Committee may, in its discretion, provide in any Award
Agreement evidencing a Restricted Stock Award that, in the event of a Change in Control, the lapsing of the Restriction Period applicable
to the shares subject to the Restricted Stock Award held by a Participant whose Service has not terminated prior to the Change in Control
shall be accelerated effective immediately prior to the consummation of the Change in Control to such extent as specified in such Award
Agreement. Any acceleration of the lapsing of the Restriction Period that was permissible solely by reason of this Section 13.3 and the
provisions of such Award Agreement shall be conditioned upon the consummation of the Change in Control.

     13.4 Effect of Change in Control on Performance Awards. The Committee may, in its discretion, provide in any Award
Agreement evidencing a Performance Award that, in the event of a Change in Control, the Performance Award held by a Participant
whose Service has not terminated prior to the Change in Control shall become payable effective as of the date of the Change in Control to
such extent as specified in such Award Agreement.

      13.5 Effect of Change in Control on Restricted Stock Unit Awards. The Committee may, in its discretion, provide in any Award
Agreement evidencing a Restricted Stock Unit Award that, in the event of a Change in Control, the Restricted Stock Unit Award held by
a Participant whose Service has not terminated prior to such date shall be settled effective as of the date of the Change in Control to such
extent as specified in such Award Agreement.

     13.6 Effect of Change in Control on Deferred Compensation Awards. The Committee may, in its discretion, provide in any
Award Agreement evidencing a Deferred Compensation Award that, in the event of a Change in Control, the Stock Units pursuant to
such Award shall be settled effective as of the date of the Change in Control to such extent as specified in such Award Agreement.

14.   C OMPLIANCE WITH S ECURITIES L AW .

       The grant of Awards and the issuance of shares of Stock pursuant to any Award shall be subject to compliance with all applicable
requirements of federal, state and foreign law with respect to such securities and the requirements of any stock exchange or market
system upon which the Stock may then be listed. In addition, no Award may be exercised or shares issued pursuant to an Award unless
(a) a registration statement under the Securities Act shall at the time of such exercise or issuance be in effect with respect to the shares
issuable pursuant to the Award or (b) in the opinion of legal counsel to the Company, the shares issuable pursuant to the Award may be
issued in accordance with the terms of an applicable exemption from the registration requirements of the Securities Act. The inability of
the Company to obtain from any

                                                                  27
     regulatory body having jurisdiction the authority, if any, deemed by the Company’s legal counsel to be necessary to the lawful issuance
     and sale of any shares hereunder shall relieve the Company of any liability in respect of the failure to issue or sell such shares as to which
     such requisite authority shall not have been obtained. As a condition to issuance of any Stock, the Company may require the Participant
     to satisfy any qualifications that may be necessary or appropriate, to evidence compliance with any applicable law or regulation and to
     make any representation or warranty with respect thereto as may be requested by the Company.

      15.   T AX W ITHHOLDING .

           15.1 Tax Withholding in General. The Company shall have the right to deduct from any and all payments made under the Plan, or
     to require the Participant, through payroll withholding, cash payment or otherwise, including by means of a Cashless Exercise of an
     Option, to make adequate provision for, the federal, state, local and foreign taxes, if any, required by law to be withheld by the
     Participating Company Group with respect to an Award or the shares acquired pursuant thereto. The Company shall have no obligation to
     deliver shares of Stock, to release shares of Stock from an escrow established pursuant to an Award Agreement, or to make any payment
     in cash under the Plan until the Participating Company Group’s tax withholding obligations have been satisfied by the Participant.

           15.2 Withholding in Shares. The Company shall have the right, but not the obligation, to deduct from the shares of Stock issuable
     to a Participant upon the exercise or settlement of an Award, or to accept from the Participant the tender of, a number of whole shares of
     Stock having a Fair Market Value, as determined by the Company, equal to all or any part of the tax withholding obligations of the
     Participating Company Group. The Fair Market Value of any shares of Stock withheld or tendered to satisfy any such tax withholding
     obligations shall not exceed the amount determined by the applicable minimum statutory withholding rates.

      16.   A MENDMENT OR T ERMINATION OF P LAN .

      The Committee may amend, suspend or terminate the Plan at any time. However, without the approval of the Company’s stockholders,
there shall be (a) no increase in the maximum aggregate number of shares of Stock that may be issued under the Plan (except by operation of
the provisions of Section 4.3), (b) no change in the class of persons eligible to receive Incentive Stock Options, and (c) no other amendment of
the Plan that would require approval of the Company’s stockholders under any applicable law, regulation or rule. No amendment, suspension
or termination of the Plan shall affect any then outstanding Award unless expressly provided by the Committee. In any event, no amendment,
suspension or termination of the Plan may adversely affect any then outstanding Award without the consent of the Participant unless necessary
to comply with any applicable law, regulation or rule.

      17.   M ISCELLANEOUS P ROVISIONS .

            17.1 Repurchase Rights. Shares issued under the Plan may be subject to one or more repurchase options, or other conditions and
     restrictions as determined by the Committee in its discretion at the time the Award is granted. The Company shall have the right to assign
     at any time any repurchase right it may have, whether or not such right is then exercisable, to one

                                                                        28
or more persons as may be selected by the Company. Upon request by the Company, each Participant shall execute any agreement
evidencing such transfer restrictions prior to the receipt of shares of Stock hereunder and shall promptly present to the Company any and
all certificates representing shares of Stock acquired hereunder for the placement on such certificates of appropriate legends evidencing
any such transfer restrictions.

     17.2 Provision of Information. Each Participant shall be given access to information concerning the Company equivalent to that
information generally made available to the Company’s common stockholders.

       17.3 Rights as Employee, Consultant or Director. No person, even though eligible pursuant to Section 5, shall have a right to be
selected as a Participant, or, having been so selected, to be selected again as a Participant. Nothing in the Plan or any Award granted
under the Plan shall confer on any Participant a right to remain an Employee, Consultant or Director or interfere with or limit in any way
any right of a Participating Company to terminate the Participant’s Service at any time. To the extent that an Employee of a Participating
Company other than the Company receives an Award under the Plan, that Award shall in no event be understood or interpreted to mean
that the Company is the Employee’s employer or that the Employee has an employment relationship with the Company.

       17.4 Rights as a Stockholder. A Participant shall have no rights as a stockholder with respect to any shares covered by an Award
until the date of the issuance of such shares (as evidenced by the appropriate entry on the books of the Company or of a duly authorized
transfer agent of the Company). No adjustment shall be made for dividends, distributions or other rights for which the record date is prior
to the date such shares are issued, except as provided in Section 4.3 or another provision of the Plan.

    17.5 Fractional Shares. The Company shall not be required to issue fractional shares upon the exercise or settlement of any
Award.

     17.6 Severability . If any one or more of the provisions (or any part thereof) of this Plan shall be held invalid, illegal or
unenforceable in any respect, such provision shall be modified so as to make it valid, legal and enforceable, and the validity, legality and
enforceability of the remaining provisions (or any part thereof) of the Plan shall not in any way be affected or impaired thereby.

      17.7 Beneficiary Designation. Subject to local laws and procedures, each Participant may file with the Company a written
designation of a beneficiary who is to receive any benefit under the Plan to which the Participant is entitled in the event of such
Participant’s death before he or she receives any or all of such benefit. Each designation will revoke all prior designations by the same
Participant, shall be in a form prescribed by the Company, and will be effective only when filed by the Participant in writing with the
Company during the Participant’s lifetime. If a married Participant designates a beneficiary other than the Participant’s spouse, the
effectiveness of such designation may be subject to the consent of the Participant’s spouse. If a Participant dies without an effective
designation of a beneficiary who is living at the time of the Participant’s death, the Company will pay any remaining unpaid benefits to
the Participant’s legal representative.

                                                                  29
      17.8 Unfunded Obligation. Participants shall have the status of general unsecured creditors of the Company. Any amounts payable
to Participants pursuant to the Plan shall be unfunded and unsecured obligations for all purposes, including, without limitation, Title I of
the Employee Retirement Income Security Act of 1974. No Participating Company shall be required to segregate any monies from its
general funds, or to create any trusts, or establish any special accounts with respect to such obligations. The Company shall retain at all
times beneficial ownership of any investments, including trust investments, which the Company may make to fulfill its payment
obligations hereunder. Any investments or the creation or maintenance of any trust or any Participant account shall not create or
constitute a trust or fiduciary relationship between the Committee or any Participating Company and a Participant, or otherwise create
any vested or beneficial interest in any Participant or the Participant’s creditors in any assets of any Participating Company. The
Participants shall have no claim against any Participating Company for any changes in the value of any assets which may be invested or
reinvested by the Company with respect to the Plan.

                                                                  30
                                    Exhibit 10.4

       salesforce.com, inc.

2004 Employee Stock Purchase Plan
                                                         TABLE OF CONTENTS
                                                                             Page


1.     Establishment, Purpose and Term of Plan                                 1
      1.1 Establishment                                                        1
      1.2 Purpose                                                              1
      1.3 Term of Plan                                                         1

2.     Definitions and Construction                                            1
      2.1 Definitions                                                          1
      2.2 Construction                                                         4

3.     Administration                                                          4
      3.1 Administration by the Board                                          4
      3.2 Authority of Officers                                                4
      3.3 Policies and Procedures Established by the Company                   4
      3.4 Indemnification                                                      5

4.     Shares Subject to Plan                                                  5
      4.1 Maximum Number of Shares Issuable                                    5
      4.2 Adjustments for Changes in Capital Structure                         5

5.     Eligibility                                                             6
      5.1 Employees Eligible to Participate                                    6
      5.2 Exclusion of Certain Stockholders                                    6
      5.3 Determination by Company                                             6

6.     Offerings                                                               7
7.     Participation in the Plan                                               7
      7.1 Initial Participation                                                7
      7.2 Continued Participation                                              8

8.     Right to Purchase Shares                                                8
      8.1 Grant of Purchase Right                                              8
      8.2 Pro Rata Adjustment of Purchase Right                                8
      8.3 Calendar Year Purchase Limitation                                    9

9.     Purchase Price                                                          9

10.    Accumulation of Purchase Price through Payroll Deduction                9
      10.1 Amount of Payroll Deductions                                       10
      10.2 Commencement of Payroll Deductions                                 10
      10.3 Election to Change or Stop Payroll Deductions                      10
      10.4 Administrative Suspension of Payroll Deductions                    10
      10.5 Participant Accounts                                               10
      10.6 No Interest Paid                                                   11

11.    Purchase of Shares                                                     11
      11.1 Exercise of Purchase Right                                         11

                                                                  -i-
                                                            TABLE OF CONTENTS
                                                                 (continued)
                                                                                Page

      11.2 Pro Rata Allocation of Shares                                         11
      11.3 Delivery of Certificates                                              12
      11.4 Return of Cash Balance                                                12
      11.5 Tax Withholding                                                       12
      11.6 Expiration of Purchase Right                                          12
      11.7 Provision of Reports and Stockholder Information to Participants      12

12.    Withdrawal from Plan                                                      13
      12.1 Voluntary Withdrawal from the Plan                                    13
      12.2 Return of Payroll Deductions                                          13

13.    Termination of Employment or Eligibility                                  13

14.    Change in Control                                                         13
      14.1 Definitions                                                           13
      14.2 Effect of Change in Control on Purchase Rights                        14

15.    Nontransferability of Purchase Rights                                     14

16.    Compliance with Securities Law                                            14

17.    Rights as a Stockholder and Employee                                      15

18.    Legends                                                                   15

19.    Notification of Disposition of Shares                                     16

20.    Designation of Beneficiary                                                16
      20.1 Designation Procedure                                                 16
      20.2 Absence of Beneficiary Designation                                    16

21.    Notices                                                                   16

22.    Amendment or Termination of the Plan                                      16

                                                                      -ii-
                                                     salesforce.com, inc.
                                              2004 Employee Stock Purchase Plan

1.    E STABLISHMENT , P URPOSE AND T ERM OF P LAN .

      1.1 Establishment. The salesforce.com, inc. 2004 Employee Stock Purchase Plan (the “ Plan ” ) is hereby established effective as
of the effective date of the initial registration by the Company of its Stock under Section 12 of the Securities Exchange Act of 1934, as
amended (the “Effective Date” ).

      1.2 Purpose. The purpose of the Plan is to advance the interests of the Company and its stockholders by providing an incentive to
attract, retain and reward Eligible Employees of the Participating Company Group and by motivating such persons to contribute to the
growth and profitability of the Participating Company Group. The Plan provides such Eligible Employees with an opportunity to acquire
a proprietary interest in the Company through the purchase of Stock. The Company intends that the Plan qualify as an ―employee stock
purchase plan‖ under Section 423 of the Code (including any amendments or replacements of such section), and the Plan shall be so
construed.

     1.3 Term of Plan. The Plan shall continue in effect until its termination by the Board.

2.    D EFINITIONS AND C ONSTRUCTION .

      2.1 Definitions. Any term not expressly defined in the Plan but defined for purposes of Section 423 of the Code shall have the same
definition herein. Whenever used herein, the following terms shall have their respective meanings set forth below:

          (a) “Board” means the Board of Directors of the Company. If one or more Committees have been appointed by the Board to
     administer the Plan, ―Board‖ also means such Committee(s).

           (b) “Code” means the Internal Revenue Code of 1986, as amended, and any applicable regulations promulgated thereunder.

           (c) “Committee” means the Compensation Committee or other committee of the Board duly appointed to administer the Plan
     and having such powers as specified by the Board. Unless the powers of the Committee have been specifically limited, the
     Committee shall have all of the powers of the Board granted herein, including, without limitation, the power to amend or terminate
     the Plan at any time, subject to the terms of the Plan and any applicable limitations imposed by law.

           (d) “Company” means salesforce.com, inc., a Delaware corporation, or any successor corporation thereto.

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      (e) “Compensation” means, with respect to any Offering Period, base wages or salary, overtime, bonuses, commissions, shift
differentials, payments for paid time off, payments in lieu of notice, and compensation deferred under any program or plan,
including, without limitation, pursuant to Section 401(k) or Section 125 of the Code. Compensation shall be limited to amounts
actually payable in cash or deferred during the Offering Period. Compensation shall not include moving allowances, payments
pursuant to a severance agreement, termination pay, relocation payments, sign-on bonuses, any amounts directly or indirectly paid
pursuant to the Plan or any other stock purchase or stock option plan, or any other compensation not included above.

      (f) “Eligible Employee” means an Employee who meets the requirements set forth in Section 5 for eligibility to participate in
the Plan.

      (g) “Employee” means a person treated as an employee of a Participating Company for purposes of Section 423 of the Code.
A Participant shall be deemed to have ceased to be an Employee either upon an actual termination of employment or upon the
corporation employing the Participant ceasing to be a Participating Company. For purposes of the Plan, an individual shall not be
deemed to have ceased to be an Employee while on any military leave, sick leave, or other bona fide leave of absence approved by
the Company of ninety (90) days or less. If an individual’s leave of absence exceeds ninety (90) days, the individual shall be
deemed to have ceased to be an Employee on the ninety-first (91st) day of such leave unless the individual’s right to reemployment
with the Participating Company Group is guaranteed either by statute or by contract.

     (h) “Fair Market Value” means, as of any date:

             (i) If the Stock is then listed on a national or regional securities exchange or market system or is regularly quoted by a
       recognized securities dealer, the closing sale price of a share of Stock (or the mean of the closing bid and asked prices if the
       Stock is so quoted instead) as quoted on the Nasdaq National Market, the Nasdaq SmallCap Market or such other national or
       regional securities exchange or market system constituting the primary market for the Stock, or by such recognized securities
       dealer, as reported in The Wall Street Journal or such other source as the Company deems reliable. If the relevant date does
       not fall on a day on which the Stock has traded on such securities exchange or market system or has been quoted by such
       securities dealer, the date on which the Fair Market Value is established shall be the last day on which the Stock was so
       traded or quoted prior to the relevant date, or such other appropriate day as determined by the Board, in its discretion.

             (ii) If, on the relevant date, the Stock is not then listed on a national or regional securities exchange or market system
       or regularly quoted by a recognized securities dealer, the Fair Market Value of a share of Stock shall be as determined in
       good faith by the Board.

             (iii) Notwithstanding the foregoing, the Fair Market Value of a share of Stock on the Effective Date shall be deemed to
       be the public offering price set forth in the final prospectus filed with the Securities and Exchange Commission in
       connection with the Company’s initial public offering of the Stock.

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     (i) “Initial Offering Period” means the Offering Period commencing on the Effective Date of the Plan, as established
pursuant to Section 6.

      (j) “Initial Offering Period Cash Exercise Notice” means a written notice in such form as specified by the Company, which
states a Participant’s election to exercise, as of the next Purchase Date, a Purchase Right granted to such Participant with respect to
the Initial Offering Period.

     (k) “Offering” means an offering of Stock as provided in Section 6.

     (l) “Offering Date” means, for any Offering, the first day of the Offering Period.

     (m) “Offering Period” means an Offering Period established in accordance with Section 6.

     (n) “Parent Corporation” means any present or future ―parent corporation‖ of the Company, as defined in Section 424(e) of
the Code.

      (o) “Participant” means an Eligible Employee who has become a participant in an Offering Period in accordance with
Section 7 and remains a participant in accordance with the Plan.

     (p) “Participating Company” means the Company and any Parent Corporation or Subsidiary Corporation designated by the
Board as a corporation the Employees of which may, if Eligible Employees, participate in the Plan. The Board shall have the sole
and absolute discretion to determine from time to time which Parent Corporations or Subsidiary Corporations shall be Participating
Companies.

      (q) “Participating Company Group” means, at any point in time, the Company and all other corporations collectively which
are then Participating Companies.

     (r) “Purchase Date” means, for any Offering Period, the last day of such period, or, if so determined by the Board, the last
day of each Purchase Period occurring within an Offering Period.

     (s) “Purchase Period” means a Purchase Period established in accordance with Section 6.

     (t) “Purchase Price” means the price at which a share of Stock may be purchased under the Plan, as determined in
accordance with Section 9.

      (u) “Purchase Right” means an option granted to a Participant pursuant to the Plan to purchase such shares of Stock as
provided in Section 8, which the Participant may or may not exercise during the Offering Period in which such option is
outstanding. Such option arises from the right of a Participant to withdraw any accumulated payroll deductions of the Participant
not previously applied to the purchase of Stock under the Plan and to terminate participation in the Plan at any time during an
Offering Period.

                                                             3
            (v) “Registration Date” means the effective date of the initial registration on Form S-8 of shares of Stock issuable pursuant to
      the Plan.

           (w) “Stock” means the common stock of the Company, as adjusted from time to time in accordance with Section 4.2.

            (x) “Subscription Agreement” means a written agreement in such form as specified by the Company, stating an Employee’s
      election to participate in the Plan and authorizing payroll deductions under the Plan from the Employee’s Compensation.

           (y) “Subscription Date” means the last business day prior to the Offering Date of an Offering Period or such earlier date as
      the Company shall establish.

           (z) “Subsidiary Corporation” means any present or future ―subsidiary corporation‖ of the Company, as defined in Section
      424(f) of the Code.

      2.2 Construction. Captions and titles contained herein are for convenience only and shall not affect the meaning or interpretation of
any provision of the Plan. Except when otherwise indicated by the context, the singular shall include the plural and the plural shall
include the singular. Use of the term ―or‖ is not intended to be exclusive, unless the context clearly requires otherwise.

3.    A DMINISTRATION .

      3.1 Administration by the Board. The Plan shall be administered by the Board. All questions of interpretation of the Plan, of any
form of agreement or other document employed by the Company in the administration of the Plan, or of any Purchase Right shall be
determined by the Board, and such determinations shall be final, binding and conclusive upon all persons having an interest in the Plan or
the Purchase Right, unless fraudulent or made in bad faith. Subject to the provisions of the Plan, the Board shall determine all of the
relevant terms and conditions of Purchase Rights; provided, however, that all Participants granted Purchase Rights pursuant to an
Offering shall have the same rights and privileges within the meaning of Section 423(b)(5) of the Code. Any and all actions, decisions
and determinations taken or made by the Board in the exercise of its discretion pursuant to the Plan or any agreement thereunder (other
than determining questions of interpretation pursuant to the second sentence of this Section 3.1) shall be final, binding and conclusive
upon all persons having an interest therein. All expenses incurred in connection with the administration of the Plan shall be paid by the
Company.

      3.2 Authority of Officers. Any officer of the Company shall have the authority to act on behalf of the Company with respect to any
matter, right, obligation, determination or election that is the responsibility of or that is allocated to the Company herein, provided that the
officer has apparent authority with respect to such matter, right, obligation, determination or election.

     3.3 Policies and Procedures Established by the Company. Without regard to whether any Participant’s Purchase Right may be
considered adversely affected, the Company may, from time to time, consistent with the Plan and the requirements of Section 423 of the

                                                                    4
Code, establish, change or terminate such rules, guidelines, policies, procedures, limitations, or adjustments as deemed advisable by the
Company, in its discretion, for the proper administration of the Plan, including, without limitation, (a) a minimum payroll deduction
amount required for participation in an Offering, (b) a limitation on the frequency or number of changes permitted in the rate of payroll
deduction during an Offering, (c) an exchange ratio applicable to amounts withheld in a currency other than United States dollars, (d) a
payroll deduction greater than or less than the amount designated by a Participant in order to adjust for the Company’s delay or mistake in
processing a Subscription Agreement or in otherwise effecting a Participant’s election under the Plan or as advisable to comply with the
requirements of Section 423 of the Code, and (e) determination of the date and manner by which the Fair Market Value of a share of
Stock is determined for purposes of administration of the Plan. All such actions by the Company shall be taken consistent with the
requirement under Section 423(b)(5) of the Code that all Participants granted Purchase Rights pursuant to an Offering shall have the same
rights and privileges within the meaning of such section.

       3.4 Indemnification. In addition to such other rights of indemnification as they may have as members of the Board or officers or
employees of the Participating Company Group, members of the Board and any officers or employees of the Participating Company
Group to whom authority to act for the Board or the Company is delegated shall be indemnified by the Company against all reasonable
expenses, including attorneys’ fees, actually and necessarily incurred in connection with the defense of any action, suit or proceeding, or
in connection with any appeal therein, to which they or any of them may be a party by reason of any action taken or failure to act under or
in connection with the Plan, or any right granted hereunder, and against all amounts paid by them in settlement thereof (provided such
settlement is approved by independent legal counsel selected by the Company) or paid by them in satisfaction of a judgment in any such
action, suit or proceeding, except in relation to matters as to which it shall be adjudged in such action, suit or proceeding that such person
is liable for gross negligence, bad faith or intentional misconduct in duties; provided, however, that within sixty (60) days after the
institution of such action, suit or proceeding, such person shall offer to the Company, in writing, the opportunity at its own expense to
handle and defend the same.

4.    S HARES S UBJECT TO P LAN .

      4.1 Maximum Number of Shares Issuable. Subject to adjustment as provided in Section 4.2, the maximum aggregate number of
shares of Stock that may be issued under the Plan shall be one million (1,000,000), cumulatively increased on February 1, 2005 and each
February 1 thereafter until and including February 1, 2013 (the “Annual Increase” ) by the smallest of (a) one percent (1%) of the
number of shares of Stock issued and outstanding on the immediately preceding January 31, (b) one million (1,000,000) shares, or (c)
such lesser number of shares determined by the Board, and shall consist of authorized but unissued or reacquired shares of Stock, or any
combination thereof. If an outstanding Purchase Right for any reason expires or is terminated or canceled, the shares of Stock allocable to
the unexercised portion of that Purchase Right shall again be available for issuance under the Plan.

      4.2 Adjustments for Changes in Capital Structure. Subject to any required action by the stockholders of the Company, in the
event of any change in the Stock effected without receipt of consideration by the Company, whether through merger, consolidation,

                                                                   5
reorganization, reincorporation, recapitalization, reclassification, stock dividend, stock split, reverse stock split, split-up, split-off,
spin-off, combination of shares, exchange of shares, or similar change in the capital structure of the Company, or in the event of payment
of a dividend or distribution to the stockholders of the Company in a form other than Stock (excepting normal cash dividends) that has a
material effect on the Fair Market Value of shares of Stock, appropriate adjustments shall be made in the number and class of shares
subject to the Plan, the Annual Increase, the limit on the shares which may be purchased by any Participant during an Offering (as
described in Sections 8.1 and 8.2) and each Purchase Right, and in the Purchase Price in order to prevent dilution or enlargement of
Participants’ rights under the Plan. For purposes of the foregoing, conversion of any convertible securities of the Company shall not be
treated as ―effected without receipt of consideration by the Company.‖ Any fractional share resulting from an adjustment pursuant to this
Section 4.2 shall be rounded down to the nearest whole number, and in no event may the Purchase Price be decreased to an amount less
than the par value, if any, of the stock subject to the Purchase Right. The adjustments determined by the Board pursuant to this Section
4.2 shall be final, binding and conclusive.

5.    E LIGIBILITY .

    5.1 Employees Eligible to Participate. Each Employee of a Participating Company is eligible to participate in the Plan and shall be
deemed an Eligible Employee, except the following:

           (a) Any Employee who is customarily employed by the Participating Company Group for twenty (20) hours or less per week;
     or

          (b) Any Employee who is customarily employed by the Participating Company Group for not more than five (5) months in
     any calendar year.

      5.2 Exclusion of Certain Stockholders. Notwithstanding any provision of the Plan to the contrary, no Employee shall be treated as
an Eligible Employee and granted a Purchase Right under the Plan if, immediately after such grant, the Employee would own or hold
options to purchase stock of the Company or of any Parent Corporation or Subsidiary Corporation possessing five percent (5%) or more
of the total combined voting power or value of all classes of stock of such corporation, as determined in accordance with Section
423(b)(3) of the Code. For purposes of this Section 5.2, the attribution rules of Section 424(d) of the Code shall apply in determining the
stock ownership of such Employee.

       5.3 Determination by Company. The Company shall determine in good faith and in the exercise of its discretion whether an
individual has become or has ceased to be an Employee or an Eligible Employee and the effective date of such individual’s attainment or
termination of such status, as the case may be. For purposes of an individual’s participation in or other rights, if any, under the Plan as of
the time of the Company’s determination, all such determinations by the Company shall be final, binding and conclusive, notwithstanding
that the Company or any court of law or governmental agency subsequently makes a contrary determination.

                                                                   6
6.    O FFERINGS .

      The Plan initially shall be implemented on and after the Effective Date by sequential Offerings of approximately six (6) months
duration or such other duration as the Board shall determine (individually, an “Offering Period” ); provided, however, that the first
Offering Period (the “Initial Offering Period” ) shall commence on the Effective Date and end on or about August 31, 2004. Subsequent
Offering Periods shall commence on or about March 1 and September 1 of each year and end on or about the last day of the next August
and February, respectively, occurring thereafter. Notwithstanding the foregoing, the Board may establish additional or alternative
sequential or overlapping Offering Periods, a different duration for one or more Offering Periods or different commencing or ending
dates for such Offering Periods; provided, however, that no Offering Period may have a duration exceeding twenty-seven (27) months. If
the Board shall so determine in its discretion, each Offering Period may consist of two (2) or more consecutive purchase periods having
such duration as the Board shall specify (individually, a “Purchase Period” ), and the last day of each such Purchase Period shall be a
Purchase Date. If the first or last day of an Offering Period or a Purchase Period is not a day on which the national securities exchanges or
Nasdaq Stock Market are open for trading, the Company shall specify the trading day that will be deemed the first or last day, as the case
may be, of the Offering Period or Purchase Period.

7.    P ARTICIPATION IN THE P LAN .

     7.1 Initial Participation.

           (a) Generally. Except as provided in Section 7.1(b), an Eligible Employee may become a Participant in an Offering Period by
     delivering a properly completed Subscription Agreement to the office designated by the Company not later than the close of
     business for such office on the Subscription Date established by the Company for that Offering Period. An Eligible Employee who
     does not deliver a properly completed Subscription Agreement to the Company’s designated office on or before the Subscription
     Date for an Offering Period shall not participate in the Plan for that Offering Period or for any subsequent Offering Period unless
     the Eligible Employee subsequently delivers a properly completed Subscription Agreement to the appropriate office of the
     Company on or before the Subscription Date for such subsequent Offering Period. An Employee who becomes an Eligible
     Employee after the Offering Date of an Offering Period shall not be eligible to participate in that Offering Period but may
     participate in any subsequent Offering Period provided the Employee is still an Eligible Employee as of the Offering Date of such
     subsequent Offering Period.

           (b) Automatic Participation in Initial Offering Period. Notwithstanding Section 7.1(a), each Employee who is an Eligible
     Employee as of the Effective Date shall automatically become a Participant in the Initial Offering Period and shall be granted
     automatically a Purchase Right consisting of an option to purchase the lesser of (a) a number of whole shares of Stock determined
     in accordance with Section 8 or (b) a number of whole shares of Stock determined by dividing fifteen percent (15%) of such
     Participant’s Compensation paid during the Initial Offering Period by the Purchase Price applicable to the Initial Offering Period.
     The Company shall not require or permit any Participant to deliver a Subscription Agreement for participation in the Initial Offering
     Period; provided, however, that following the Registration

                                                                   7
     Date a Participant may deliver a Subscription Agreement to the office designated by the Company if the Participant wishes to
     change the terms of the Participant’s participation in the Initial Offering Period. Such changes may include, for example, an election
     to commence payroll deductions in accordance with Section 10.

     7.2 Continued Participation.

           (a) Generally. Except as provided in Section 7.2(b), a Participant shall automatically participate in the next Offering Period
     commencing immediately after the Purchase Date of each Offering Period in which the Participant participates provided that the
     Participant remains an Eligible Employee on the Offering Date of the new Offering Period and has not either (a) withdrawn from
     the Plan pursuant to Section 12.1 or (b) terminated employment as provided in Section 13. A Participant who may automatically
     participate in a subsequent Offering Period, as provided in this Section, is not required to deliver any additional Subscription
     Agreement for the subsequent Offering Period in order to continue participation in the Plan. However, a Participant may deliver a
     new Subscription Agreement for a subsequent Offering Period in accordance with the procedures set forth in Section 7.1(a) if the
     Participant desires to change any of the elections contained in the Participant’s then effective Subscription Agreement.

            (b) Participation Following Initial Offering Period. Notwithstanding Section 7.2(a), an Eligible Employee who was
     automatically enrolled in the Initial Offering Period and who wishes to participate in an Offering Period which begins after the
     Initial Offering Period shall deliver a Subscription Agreement in accordance with Section 7.1(a) no earlier than the Registration
     Date and no later than the Subscription Date for such Offering Period, unless such Employee was a Participant in the Initial
     Offering Period who delivered a Subscription Agreement with respect to the Initial Offering Period as provided in Section 7.1(b).

8.    R IGHT TO P URCHASE S HARES .

       8.1 Grant of Purchase Right. Except as provided in Section 7.1 with respect to the Initial Offering Period or as otherwise provided
below, on the Offering Date of each Offering Period, each Participant in such Offering Period shall be granted automatically a Purchase
Right consisting of an option to purchase the lesser of (a) that number of whole shares of Stock determined by dividing Twelve Thousand
Five Hundred Dollars ($12,500) by the Fair Market Value of a share of Stock on such Offering Date or (b) seven hundred fifty (750)
shares of Stock. The Board may, in its discretion and prior to the Offering Date of any Offering Period, (i) change the method of, or any
of the foregoing factors in, determining the number of shares of Stock subject to Purchase Rights to be granted on such Offering Date or
(ii) specify a maximum aggregate number of shares that may be purchased by all Participants in an Offering or on any Purchase Date
within an Offering Period. No Purchase Right shall be granted on an Offering Date to any person who is not, on such Offering Date, an
Eligible Employee.

      8.2 Pro Rata Adjustment of Purchase Right. If the Board establishes an Offering Period of any duration other than six months,
then (a) the dollar amount in Section 8.1 shall be determined by multiplying $2,083.33 by the number of months (rounded to the nearest
whole month) in the Offering Period and rounding to the nearest whole dollar, and (b) the share

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amount in Section 8.1 shall be determined by multiplying 125 shares by the number of months (rounded to the nearest whole month) in
the Offering Period and rounding to the nearest whole share.

      8.3 Calendar Year Purchase Limitation. Notwithstanding any provision of the Plan to the contrary, no Participant shall be
granted a Purchase Right which permits his or her right to purchase shares of Stock under the Plan to accrue at a rate which, when
aggregated with such Participant’s rights to purchase shares under all other employee stock purchase plans of a Participating Company
intended to meet the requirements of Section 423 of the Code, exceeds Twenty-Five Thousand Dollars ($25,000) in Fair Market Value
(or such other limit, if any, as may be imposed by the Code) for each calendar year in which such Purchase Right is outstanding at any
time. For purposes of the preceding sentence, the Fair Market Value of shares purchased during a given Offering Period shall be
determined as of the Offering Date for such Offering Period. The limitation described in this Section shall be applied in conformance
with applicable regulations under Section 423(b)(8) of the Code.

9.    P URCHASE P RICE .

      The Purchase Price at which each share of Stock may be acquired in an Offering Period upon the exercise of all or any portion of a
Purchase Right shall be established by the Board; provided, however, that the Purchase Price on each Purchase Date shall not be less than
eighty-five percent (85%) of the lesser of (a) the Fair Market Value of a share of Stock on the Offering Date of the Offering Period or (b)
the Fair Market Value of a share of Stock on the Purchase Date. Subject to adjustment as provided below or in Section 22 and unless
otherwise provided by the Board, the Purchase Price for each Offering Period shall be eighty-five percent (85%) of the lesser of (a) the
Fair Market Value of a share of Stock on the Offering Date of the Offering Period or (b) the Fair Market Value of a share of Stock on the
Purchase Date. Notwithstanding the foregoing, in the event that (i) the stockholders of the Company approve an amendment to the Plan to
increase the maximum aggregate number of shares of Stock issuable under the Plan in accordance with Section 4.1, (ii) all or any portion
of such additional shares of Stock (the ― Additional Shares ‖) are to be issued pursuant to an Offering Period in progress at the time of
such stockholder approval and (iii) the Fair Market value per share of Stock on the date of such stockholder approval (the “ Approval
Date ” ) is greater than the Fair Market value per share of Stock on the Offering Date of such Offering period, then, the Board may, in its
discretion and without the consent of any Participant, adjust the Purchase Price for such Offering Period to be an amount equal to
eighty-five percent (85%) (or such other percentage as in effect prior to such adjustment) of the lesser of (a) the Fair Market Value of a
share of Stock on the Approval Date or (b) the Fair Market Value of a share of Stock on the Purchase Date.

10.   A CCUMULATION OF P URCHASE P RICE T HROUGH P AYROLL D EDUCTION .

       Except as provided in Section 11.1(b) with respect to the Initial Offering Period, shares of Stock acquired pursuant to the exercise
of all or any portion of a Purchase Right may be paid for only by means of payroll deductions from the Participant’s Compensation
accumulated during the Offering Period for which such Purchase Right was granted, subject to the following:

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      10.1 Amount of Payroll Deductions. Except as otherwise provided herein, the amount to be deducted under the Plan from a
Participant’s Compensation on each pay day during an Offering Period shall be determined by the Participant’s Subscription Agreement.
The Subscription Agreement shall set forth the percentage of the Participant’s Compensation to be deducted on each pay day during an
Offering Period in whole percentages of not less than one percent (1%) (except as a result of an election pursuant to Section 10.3 to stop
payroll deductions effective following the first pay day during an Offering) or more than fifteen percent (15%). The Board may change
the foregoing limits on payroll deductions effective as of any Offering Date.

      10.2 Commencement of Payroll Deductions. Payroll deductions shall commence on the first pay day following the Offering Date
and shall continue to the end of the Offering Period unless sooner altered or terminated as provided herein; provided, however, that with
respect to the Initial Offering Period, payroll deductions shall commence as soon as practicable following the Company’s receipt of the
Participant’s Subscription Agreement (delivered no earlier than the Registration Date), if any.

      10.3 Election to Change or Stop Payroll Deductions. During an Offering Period, a Participant may elect to increase or decrease
the rate of or to stop deductions from his or her Compensation by delivering to the Company’s designated office an amended Subscription
Agreement authorizing such change on or before the ―Change Notice Date.‖ The “ Change Notice Date ” shall be a date prior to the
beginning of the first pay period for which such election is to be effective as established by the Company from time to time and
announced to the Participants. A Participant who elects, effective following the first pay day of an Offering Period, to decrease the rate of
his or her payroll deductions to zero percent (0%) shall nevertheless remain a Participant in the current Offering Period unless such
Participant withdraws from the Plan as provided in Section 12.1.

      10.4 Administrative Suspension of Payroll Deductions. The Company may, in its sole discretion, suspend a Participant’s payroll
deductions under the Plan as the Company deems advisable to avoid accumulating payroll deductions in excess of the amount that could
reasonably be anticipated to purchase the maximum number of shares of Stock permitted (a) under the Participant’s Purchase Right or (b)
during a calendar year under the limit set forth in Section 8.3. Unless the Participant has either withdrawn from the Plan as provided in
Section 12.1 or has ceased to be an Eligible Employee, payroll deductions shall be resumed at the rate specified in the Participant’s then
effective Subscription Agreement either (i) at the beginning of the next Offering Period if the reason for suspension was clause (a) in the
preceding sentence or (ii) at the beginning of the next Offering Period having a first Purchase Date that falls within the subsequent
calendar year if the reason for suspension was clause (b) in the preceding sentence.

      10.5 Participant Accounts. Individual bookkeeping accounts shall be maintained for each Participant. All payroll deductions from
a Participant’s Compensation (and other amounts received from the Participant in the Initial Offering Period) shall be credited to such
Participant’s Plan account and shall be deposited with the general funds of the Company. All such amounts received or held by the
Company may be used by the Company for any corporate purpose.

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     10.6 No Interest Paid. Interest shall not be paid on sums deducted from a Participant’s Compensation pursuant to the Plan or
otherwise credited to the Participant’s Plan account.

11.   P URCHASE OF S HARES .

      11.1 Exercise of Purchase Right.

            (a) Generally. Except as provided in Section 11.1(b), on each Purchase Date of an Offering Period, each Participant who has
      not withdrawn from the Plan and whose participation in the Offering has not otherwise terminated before such Purchase Date shall
      automatically acquire pursuant to the exercise of the Participant’s Purchase Right the number of whole shares of Stock determined
      by dividing (a) the total amount of the Participant’s payroll deductions accumulated in the Participant’s Plan account during the
      Offering Period and not previously applied toward the purchase of Stock by (b) the Purchase Price. However, in no event shall the
      number of shares purchased by the Participant during an Offering Period exceed the number of shares subject to the Participant’s
      Purchase Right. No shares of Stock shall be purchased on a Purchase Date on behalf of a Participant whose participation in the
      Offering or the Plan has terminated before such Purchase Date.

            (b) Purchase in Initial Offering Period. Notwithstanding Section 11.1(a), on the Purchase Date of the Initial Offering
      Period, each Participant who has not withdrawn from the Plan and whose participation in such Offering has not otherwise
      terminated before such Purchase Date shall automatically acquire pursuant to the exercise of the Participant’s Purchase Right (i) a
      number of whole shares of Stock determined in accordance with Section 11.1(a) to the extent of the total amount of the Participant’s
      payroll deductions accumulated in the Participant’s Plan account during the Initial Offering Period, if any, and not previously
      applied toward the purchase of Stock and (ii) such additional shares of Stock (not exceeding in the aggregate the Participant’s
      Purchase Right) as determined in accordance with an Initial Offering Period Cash Exercise Notice delivered to the office designated
      by the Company no earlier than the Registration Date and not later than the close of business for such office on the business day
      immediately preceding the Purchase Date or such earlier date as the Company shall establish, accompanied by payment in cash or
      by check of the Purchase Price for such additional shares. However, in no event shall the number of shares purchased by a
      Participant during the Initial Offering Period exceed the number of shares subject to the Participant’s Purchase Right. In addition, if
      a Participant delivers a Subscription Agreement to the Company after the Registration Date, the Participant may not elect to
      exercise a Purchase Right pursuant to an Initial Offering Period Cash Exercise Notice in an amount which, when aggregated with
      payroll deductions pursuant to such Subscription Agreement, exceeds fifteen percent (15%) of the Participant’s Compensation
      during the Initial Offering Period. The Company shall refund to the Participant in accordance with Section 11.4 any excess
      Purchase Price payment received from the Participant.

      11.2 Pro Rata Allocation of Shares. If the number of shares of Stock which might be purchased by all Participants on a Purchase
Date exceeds the number of shares of Stock available in the Plan as provided in Section 4.1 or the maximum aggregate number of shares
of Stock that may be purchased on such Purchase Date pursuant to a limit established by the Board

                                                                  11
pursuant to Section 8.1, the Company shall make a pro rata allocation of the shares available in as uniform a manner as practicable and as
the Company determines to be equitable. Any fractional share resulting from such pro rata allocation to any Participant shall be
disregarded.

      11.3 Delivery of Certificates. As soon as practicable after each Purchase Date, the Company shall arrange the delivery to each
Participant of a certificate representing the shares acquired by the Participant on such Purchase Date; provided that the Company may
deliver such shares to a broker designated by the Company that will hold such shares for the benefit of the Participant. Shares to be
delivered to a Participant under the Plan shall be registered in the name of the Participant, or, if requested by the Participant, in the name
of the Participant and his or her spouse, or, if applicable, in the names of the heirs of the Participant.

      11.4 Return of Cash Balance. Any cash balance remaining in a Participant’s Plan account following any Purchase Date shall be
refunded to the Participant as soon as practicable after such Purchase Date. However, if the cash balance to be returned to a Participant
pursuant to the preceding sentence is less than the amount that would have been necessary to purchase an additional whole share of Stock
on such Purchase Date, the Company may retain the cash balance in the Participant’s Plan account to be applied toward the purchase of
shares of Stock in the subsequent Offering Period.

      11.5 Tax Withholding. At the time a Participant’s Purchase Right is exercised, in whole or in part, or at the time a Participant
disposes of some or all of the shares of Stock he or she acquires under the Plan, the Participant shall make adequate provision for the
federal, state, local and foreign tax withholding obligations, if any, of the Participating Company Group which arise upon exercise of the
Purchase Right or upon such disposition of shares, respectively. The Participating Company Group may, but shall not be obligated to,
withhold from the Participant’s compensation the amount necessary to meet such withholding obligations.

     11.6 Expiration of Purchase Right. Any portion of a Participant’s Purchase Right remaining unexercised after the end of the
Offering Period to which the Purchase Right relates shall expire immediately upon the end of the Offering Period.

      11.7 Provision of Reports and Stockholder Information to Participants. Each Participant who has exercised all or part of his or
her Purchase Right shall receive, as soon as practicable after the Purchase Date, a report of such Participant’s Plan account setting forth
the total amount credited to his or her Plan account prior to such exercise, the number of shares of Stock purchased, the Purchase Price
for such shares, the date of purchase and the cash balance, if any, remaining immediately after such purchase that is to be refunded or
retained in the Participant’s Plan account pursuant to Section 11.4. The report required by this Section may be delivered in such form and
by such means, including by electronic transmission, as the Company may determine. In addition, each Participant shall be provided
information concerning the Company equivalent to that information provided generally to the Company’s common stockholders.

                                                                   12
12.   W ITHDRAWAL FROM P LAN .

      12.1 Voluntary Withdrawal from the Plan. A Participant may withdraw from the Plan by signing and delivering to the
Company’s designated office a written notice of withdrawal on a form provided by the Company for this purpose. Such withdrawal may
be elected at any time prior to the end of an Offering Period; provided, however, that if a Participant withdraws from the Plan after a
Purchase Date, the withdrawal shall not affect shares of Stock acquired by the Participant on such Purchase Date. A Participant who
voluntarily withdraws from the Plan is prohibited from resuming participation in the Plan in the same Offering from which he or she
withdrew, but may participate in any subsequent Offering by again satisfying the requirements of Sections 5 and 7.1. The Company may
impose, from time to time, a requirement that the notice of withdrawal from the Plan be on file with the Company’s designated office for
a reasonable period prior to the effectiveness of the Participant’s withdrawal.

      12.2 Return of Payroll Deductions. Upon a Participant’s voluntary withdrawal from the Plan pursuant to Section 12.1, the
Participant’s accumulated Plan account balance which has not been applied toward the purchase of shares of Stock shall be refunded to
the Participant as soon as practicable after the withdrawal, without the payment of any interest, and the Participant’s interest in the Plan
and the Offering shall terminate. Such amounts to be refunded in accordance with this Section may not be applied to any other Offering
under the Plan.

13.   T ERMINATION OF E MPLOYMENT OR E LIGIBILITY .

      Upon a Participant’s ceasing, prior to a Purchase Date, to be an Employee of the Participating Company Group for any reason,
including retirement, disability or death, or upon the failure of a Participant to remain an Eligible Employee, the Participant’s
participation in the Plan shall terminate immediately. In such event, the Participant’s Plan account balance which has not been applied
toward the purchase of shares shall, as soon as practicable, be returned to the Participant or, in the case of the Participant’s death, to the
Participant’s beneficiary designated in accordance with Section 20, if any, or legal representative, and all of the Participant’s rights under
the Plan shall terminate. Interest shall not be paid on sums returned pursuant to this Section 13. A Participant whose participation has
been so terminated may again become eligible to participate in the Plan by satisfying the requirements of Sections 5 and 7.1.

14.   C HANGE IN C ONTROL .

      14.1 Definitions.

            (a) An “ Ownership Change Event ” shall be deemed to have occurred if any of the following occurs with respect to the
      Company: (i) the direct or indirect sale or exchange in a single or series of related transactions by the stockholders of the Company
      of more than fifty percent (50%) of the voting stock of the Company; (ii) a merger or consolidation in which the Company is a
      party; (iii) the sale, exchange, or transfer of all or substantially all of the assets of the Company; or (iv) a liquidation or dissolution
      of the Company.

            (b) A “ Change in Control ” shall mean an Ownership Change Event or a series of related Ownership Change Events
      (collectively, the “ Transaction ” ) wherein the

                                                                    13
      stockholders of the Company immediately before the Transaction do not retain immediately after the Transaction, in substantially
      the same proportions as their ownership of shares of the Company’s voting stock immediately before the Transaction, direct or
      indirect beneficial ownership of more than fifty percent (50%) of the total combined voting power of the outstanding voting
      securities of the Company or, in the case of a Transaction described in Section 14.1(a)(iii), the corporation or other business entity
      to which the assets of the Company were transferred (the “Transferee” ), as the case may be. For purposes of the preceding
      sentence, indirect beneficial ownership shall include, without limitation, an interest resulting from ownership of the voting
      securities of one or more corporations or other business entities which own the Company or the Transferee, as the case may be,
      either directly or through one or more subsidiary corporations or other business entities. The Board shall have the right to determine
      whether multiple sales or exchanges of the voting securities of the Company or multiple Ownership Change Events are related, and
      its determination shall be final, binding and conclusive.

      14.2 Effect of Change in Control on Purchase Rights. In the event of a Change in Control, the surviving, continuing, successor,
or purchasing corporation or parent thereof, as the case may be (the “ Acquiring Corporation ” ), may, without the consent of any
Participant, assume the Company’s rights and obligations under the Plan. If the Acquiring Corporation elects not to assume the
Company’s rights and obligations under the Plan, the Purchase Date of the then current Offering Period shall be accelerated to a date
before the date of the Change in Control specified by the Board, but the number of shares of Stock subject to outstanding Purchase Rights
shall not be adjusted. All Purchase Rights which are neither assumed by the Acquiring Corporation in connection with the Change in
Control nor exercised as of the date of the Change in Control shall terminate and cease to be outstanding effective as of the date of the
Change in Control.

15.   N ONTRANSFERABILITY OF P URCHASE R IGHTS .

      Neither payroll deductions or other amounts credited to a Participant’s Plan account nor a Participant’s Purchase Right may be
assigned, transferred, pledged or otherwise disposed of in any manner other than as provided by the Plan or by will or the laws of descent
and distribution. (A beneficiary designation pursuant to Section 20 shall not be treated as a disposition for this purpose.) Any such
attempted assignment, transfer, pledge or other disposition shall be without effect, except that the Company may treat such act as an
election to withdraw from the Plan as provided in Section 12.1. A Purchase Right shall be exercisable during the lifetime of the
Participant only by the Participant.

16.   C OMPLIANCE WITH S ECURITIES L AW .

      The issuance of shares under the Plan shall be subject to compliance with all applicable requirements of federal, state and foreign
law with respect to such securities. A Purchase Right may not be exercised if the issuance of shares upon such exercise would constitute a
violation of any applicable federal, state or foreign securities laws or other law or regulations or the requirements of any securities
exchange or market system upon which the Stock may then be listed. In addition, no Purchase Right may be exercised unless (a) a
registration statement under the Securities Act of 1933, as amended, shall at the time of exercise

                                                                  14
   of the Purchase Right be in effect with respect to the shares issuable upon exercise of the Purchase Right, or (b) in the opinion of legal
   counsel to the Company, the shares issuable upon exercise of the Purchase Right may be issued in accordance with the terms of an
   applicable exemption from the registration requirements of said Act. The inability of the Company to obtain from any regulatory body
   having jurisdiction the authority, if any, deemed by the Company’s legal counsel to be necessary to the lawful issuance and sale of any
   shares under the Plan shall relieve the Company of any liability in respect of the failure to issue or sell such shares as to which such
   requisite authority shall not have been obtained. As a condition to the exercise of a Purchase Right, the Company may require the
   Participant to satisfy any qualifications that may be necessary or appropriate, to evidence compliance with any applicable law or
   regulation, and to make any representation or warranty with respect thereto as may be requested by the Company.

    17.   R IGHTS AS A S TOCKHOLDER AND E MPLOYEE .

         A Participant shall have no rights as a stockholder by virtue of the Participant’s participation in the Plan until the date of the
   issuance of the shares purchased pursuant to the exercise of the Participant’s Purchase Right (as evidenced by the appropriate entry on the
   books of the Company or of a duly authorized transfer agent of the Company). No adjustment shall be made for dividends, distributions
   or other rights for which the record date is prior to the date such shares are issued, except as provided in Section 4.2. Nothing herein shall
   confer upon a Participant any right to continue in the employ of the Participating Company Group or interfere in any way with any right
   of the Participating Company Group to terminate the Participant’s employment at any time.

    18.   L EGENDS .

          The Company may at any time place legends or other identifying symbols referencing any applicable federal, state or foreign
   securities law restrictions or any provision convenient in the administration of the Plan on some or all of the certificates representing
   shares of Stock issued under the Plan. The Participant shall, at the request of the Company, promptly present to the Company any and all
   certificates representing shares acquired pursuant to a Purchase Right in the possession of the Participant in order to carry out the
   provisions of this Section. Unless otherwise specified by the Company, legends placed on such certificates may include but shall not be
   limited to the following:

―THE SHARES EVIDENCED BY THIS CERTIFICATE WERE ISSUED BY THE CORPORATION TO THE REGISTERED HOLDER
UPON THE PURCHASE OF SHARES UNDER AN EMPLOYEE STOCK PURCHASE PLAN AS DEFINED IN SECTION 423 OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED. THE TRANSFER AGENT FOR THE SHARES EVIDENCED HEREBY SHALL
NOTIFY THE CORPORATION IMMEDIATELY OF ANY TRANSFER OF THE SHARES BY THE REGISTERED HOLDER HEREOF.
THE REGISTERED HOLDER SHALL HOLD ALL SHARES PURCHASED UNDER THE PLAN IN THE REGISTERED HOLDER’S
NAME (AND NOT IN THE NAME OF ANY NOMINEE).‖

                                                                     15
19.   N OTIFICATION OF D ISPOSITION OF S HARES .

      The Company may require the Participant to give the Company prompt notice of any disposition of shares acquired by exercise of a
Purchase Right. The Company may require that until such time as a Participant disposes of shares acquired upon exercise of a Purchase
Right, the Participant shall hold all such shares in the Participant’s name (or, if elected by the Participant, in the name of the Participant
and his or her spouse but not in the name of any nominee) until the later of two years after the date of grant of such Purchase Right or one
year after the date of exercise of such Purchase Right. The Company may direct that the certificates evidencing shares acquired by
exercise of a Purchase Right refer to such requirement to give prompt notice of disposition.

20.   D ESIGNATION OF B ENEFICIARY .

      20.1 Designation Procedure. Subject to local laws and procedures, a Participant may file a written designation of a beneficiary
who is to receive (a) shares and cash, if any, from the Participant’s Plan account if the Participant dies subsequent to a Purchase Date but
prior to delivery to the Participant of such shares and cash or (b) cash, if any, from the Participant’s Plan account if the Participant dies
prior to the exercise of the Participant’s Purchase Right. If a married Participant designates a beneficiary other than the Participant’s
spouse, the effectiveness of such designation may be subject to the consent of the Participant’s spouse. A Participant may change his or
her beneficiary designation at any time by written notice to the Company.

      20.2 Absence of Beneficiary Designation. If a Participant dies without an effective designation pursuant to Section 20.1 of a
beneficiary who is living at the time of the Participant’s death, the Company shall deliver any shares or cash credited to the Participant’s
Plan account to the Participant’s legal representative.

21.   N OTICES .

      All notices or other communications by a Participant to the Company under or in connection with the Plan shall be deemed to have
been duly given when received in the form specified by the Company at the location, or by the person, designated by the Company for the
receipt thereof.

22.   A MENDMENT OR T ERMINATION OF T HE P LAN .

      The Board may at any time amend, suspend or terminate the Plan, except that (a) no such amendment, suspension or termination
shall affect Purchase Rights previously granted under the Plan unless expressly provided by the Board and (b) no such amendment,
suspension or termination may adversely affect a Purchase Right previously granted under the Plan without the consent of the Participant,
except to the extent permitted by the Plan or as may be necessary to qualify the Plan as an employee stock purchase plan pursuant to
Section 423 of the Code or to comply with any applicable law, regulation or rule. In addition, an amendment to the Plan must be
approved by the stockholders of the Company within twelve (12) months of the adoption of such amendment if such amendment would
authorize the sale of more shares than are then authorized for issuance under the Plan or would change the definition of the

                                                                   16
corporations that may be designated by the Board as Participating Companies. Notwithstanding the foregoing, in the event that the Board
determines that continuation of the Plan or an Offering would result in unfavorable financial accounting consequences to the Company as
a result of a change after the Effective Date in the generally accepted accounting principles applicable to the Plan, the Board may, in its
discretion and without the consent of any Participant, including with respect to an Offering Period then in progress: (a) terminate the Plan
or any Offering Period, (b) accelerate the Purchase Date of any Offering Period, (c) reduce the discount applicable in determining the
Purchase Price of any Offering Period, (d) reduce the maximum number of shares of Stock that may be purchased in any Offering Period
or (e) take any combination of the foregoing actions.

                                                                  17
                          APPENDIX A

Participating Companies

salesforce.com, inc.
      APPENDIX B

       FORMS OF

SUBSCRIPTION AGREEMENT
          AND
 NOTICE OF WITHDRAWAL
                                                       SALESFORCE.COM, INC.
                                               2004 EMPLOYEE STOCK PURCHASE PLAN
                                                     SUBSCRIPTION AGREEMENT

NAME (Please print):

                                  (Last)                                         (First)                                       (Middle)
™
      Original application for the Offering Period beginning (date): ____________________________________
™
      Change in payroll deduction rate effective with the pay period beginning (date): _____________________
™
      Stop payroll deductions effective with the pay period beginning (date): _____________________________
™
      Change of beneficiary.

I.    SUBSCRIPTION

      I elect to participate in the 2004 Employee Stock Purchase Plan (the ― Plan ‖) of salesforce.com, inc. (the ― Company ‖) and to subscribe
to purchase shares of the Company’s Common Stock in accordance with this Subscription Agreement and the Plan.

      I authorize payroll deductions of              percent (in whole percentages not less than 1%, unless an election to stop deductions is
being made, or more than 15%) of my Compensation on each pay day throughout the Offering Period in accordance with the Plan. I
understand that these payroll deductions will be accumulated for the purchase of shares of Common Stock at the applicable purchase price
determined in accordance with the Plan. Except as otherwise provided by the Plan, I will automatically purchase shares on each Purchase Date
unless I withdraw from the Plan by giving written notice on a form provided by the Company or unless my eligibility or employment
terminates.

      I understand that I will automatically participate in each subsequent Offering that commences immediately after the last day of an
Offering in which I am participating until I withdraw from the Plan by giving written notice on a form provided by the Company or my
eligibility or employment terminates.

      Shares I purchase under the Plan should be issued in the name(s) set forth below. (Shares may be issued in the participant’s name alone or
together with the participant’s spouse as community property or in joint tenancy.)

       NAME(S) (please print):


       ADDRESS
       :


       MY SOCIAL SECURITY NUMBER:


     I agree to make adequate provision for the federal, state, local and foreign tax withholding obligations, if any, which arise upon my
purchase of shares under the Plan and/or my disposition of shares. The Company may withhold from my compensation the amount necessary to
meet such withholding obligations.

     I agree that, unless otherwise permitted by the Company, until I dispose of shares I purchase under the Plan, I will hold such shares in the
name(s) entered above (and not in the name of any nominee) until the later of (i) two years after the first day of the Offering Period in which I
purchased the shares and (ii) one year after the Purchase Date on which I purchased the shares. This restriction only applies to the name(s) in
which shares are held and does not affect my ability to dispose of Plan shares.

                                                                        1
     I agree that I will notify the Chief Financial Officer of the Company in writing within 30 days after any sale, gift, transfer or
other disposition of any kind prior to the end of the periods referred to in the preceding paragraph (a ―Disqualifying Disposition‖) of
any shares I purchased under the Plan. If I do not respond within 30 days of the date of a Disqualifying Disposition Survey delivered to
me by certified mail, the Company is authorized to treat my nonresponse as my notice to the Company of a Disqualifying Disposition
and to compute and report to the Internal Revenue Service the ordinary income I must recognize upon such Disqualifying Disposition.

II.     BENEFICIARY DESIGNATION

        In the event of my death, I designate the following as my beneficiary to receive all payments and shares then due me under the Plan:

         BENEFICIARY’S NAME (please print):
                                                                (First)                     (Middle)                    (Last)

         RELATIONSHIP:                                                          SOC. SEC. NO.:


         ADDRESS:

      If you are married and your beneficiary is someone other than your spouse, then your spouse must sign and date this form as indicated
below. If you are not married when you designate a beneficiary and you later become married, or if you later become married to a different
person, the beneficiary designation previously made will be automatically revoked. Payments and shares then due you upon your death will be
delivered to your legal representative unless you have completed a new beneficiary designation and it is consented to by your then spouse.

III. CONSENT OF SPOUSE

     I am the spouse of                                                                  . I consent to the above designation of a beneficiary other
than me to receive payments and shares due my spouse under the Plan.

Date:

                                                                                    Signature of Participant’s Spouse

IV. PARTICIPANT DECLARATION

        Any election I have made on this form revokes all prior elections with regard to this form.

      I am familiar with the provisions of the Plan and agree to participate in the Plan subject to all of its provisions. I understand that the Board
of Directors of the Company reserves the right to terminate the Plan or to amend the Plan and my right to purchase stock under the Plan to the
extent provided by the Plan. I understand that the effectiveness of this Subscription Agreement is dependent upon my eligibility to participate
in the Plan.

Date:

                                                                                    Signature of Participant
                                                      SALESFORCE.COM, INC.
                                              2004 EMPLOYEE STOCK PURCHASE PLAN
                                                     NOTICE OF WITHDRAWAL

NAME (Please print):
                                  (Last)                                         (First)                                       (Middle)

      I elect to withdraw from the salesforce.com, inc. 2004 Employee Stock Purchase Plan (the ― Plan ‖) and the Offering which began on
(date)                       and in which I am participating (the ― Current Offering ‖).

      I understand that I am terminating immediately my interest in the Plan and the Current Offering, and that no further payroll deductions
will be made (provided I have given sufficient notice before the next pay day). My payroll deductions not previously used to purchase shares
will not be used to purchase shares in the Current Offering, but instead will be paid to me as soon as practicable. I understand that I will not
participate in the Plan unless I elect to become a participant in another Offering by filing a new Subscription Agreement with the Company. I
understand that I will receive no interest on the amounts paid to me from my Plan account, and that I may not apply such amounts to any other
Offering under the Plan or any other employee stock purchase plan of the Company.

Date:                                                                    Signature:
                                    Exhibit 10.5

       salesforce.com, inc.

2004 Outside Directors Stock Plan
                                                    TABLE OF CONTENTS

                                                                           Page



1.   Establishment, Purpose and Term of Plan                                 1
      1.1     Establishment                                                  1
      1.2     Purpose                                                        1
      1.3     Term of Plan                                                   1

2.   Definitions and Construction                                            1
      2.1     Definitions                                                    1
      2.2     Construction                                                   4

3.   Administration                                                          4
      3.1   Administration by the Board                                      4
      3.2   Authority of Officers                                            4
      3.3   Powers of the Board                                              4
      3.4   Indemnification                                                  5

4.   Shares Subject to Plan                                                  6
      4.1    Maximum Number of Shares Issuable                               6
      4.2    Adjustments for Changes in Capital Structure                    6

5.   Eligibility for Participation                                           6

6.   Terms and Conditions of Outside Director Stock Awards                   7
      6.1    Automatic Grant of Outside Director Stock Awards                7
      6.2    Purchase Price                                                  7
      6.3    Vesting                                                         7

7.   Terms and Conditions of Options                                         8
      7.1    Exercise Price                                                  8
      7.2    Exercisability and Term of Options                              8
      7.3    Payment of Exercise Price                                       8
      7.4    Effect of Termination of Service                                9
      7.5    Transferability of Options                                     10

8.   Terms and Conditions of Restricted Stock Awards                        10
      8.1    Purchase Price                                                 10
      8.2    Vesting and Restrictions on Transfer                           11
      8.3    Voting Rights; Dividends and Distributions                     11
      8.4    Effect of Termination of Service                               11
      8.5    Nontransferability of Restricted Stock Award Rights            11

9.   Terms and Conditions of Restricted Stock Unit Awards                   12
      9.1    Purchase Price                                                 12
      9.2    Vesting                                                        12
      9.3    Voting Rights, Dividend Equivalent Rights and Distributions    12
      9.4    Effect of Termination of Service                               12

                                                                -i-
                                                   TABLE OF CONTENTS
                                                       (continued)
                                                                             Page

        9.5    Settlement of Restricted Stock Unit Awards                     13
        9.6    Nontransferability of Restricted Stock Unit Awards             13

10.   Standard Forms of Award Agreement                                       13
       10.1     Award Agreement                                               13
       10.2     Authority to Vary Terms                                       13

11.   Change in Control                                                       13
       11.1    Definitions                                                    13
       11.2    Effect of Change in Control on Options                         14
       11.3    Effect of Change in Control on Restricted Stock Awards         15
       11.4    Effect of Change in Control on Restricted Stock Unit Awards    15

12.   Compliance with Securities Law                                          15

13.   Tax Withholding                                                         15
       13.1    Tax Withholding in General                                     15
       13.2    Withholding in Shares                                          16

14.   Amendment or Termination of Plan                                        16

15.   Miscellaneous Provisions                                                16
       15.1    Repurchase Rights                                              16
       15.2    Provision of Information                                       16
       15.3    Rights as Outside Director                                     16
       15.4    Rights as a Stockholder                                        16
       15.5    Fractional Shares                                              17
       15.6    Severability                                                   17
       15.7    Beneficiary Designation                                        17
       15.8    Unfunded Obligation                                            17

                                                              -ii-
                                                      salesforce.com, inc.
                                                2004 Outside Directors Stock Plan

1.    E STABLISHMENT , P URPOSE AND T ERM OF P LAN .

    1.1 Establishment. The salesforce.com, inc. 2004 Outside Directors Stock Plan (the “Plan” ) is hereby established effective as of
March 1, 2004, the date of its approval by the stockholders of the Company (the “Effective Date” ).

     1.2 Purpose. The purpose of the Plan is to advance the interests of the Participating Company Group and its stockholders by
providing an incentive to attract, retain and reward persons performing services as Outside Directors of the Company and by motivating
such persons to contribute to the growth and profitability of the Participating Company Group. The Plan seeks to achieve this purpose by
providing for Awards in the form of Options, Restricted Stock, and Restricted Stock Units.

      1.3 Term of Plan. The Plan shall continue in effect until the earlier of its termination by the Board or the date on which all of the
shares of Stock available for issuance under the Plan have been issued and all restrictions on such shares under the terms of the Plan and
the agreements evidencing Awards granted under the Plan have lapsed. However, all Awards shall be granted, if at all, within ten (10)
years from the Effective Date.

2.    D EFINITIONS AND C ONSTRUCTION .

     2.1 Definitions. Whenever used herein, the following terms shall have their respective meanings set forth below:

           (a) “Award” means any Option, Restricted Stock or Restricted Stock Unit granted under the Plan.

          (b) “Award Agreement” means a written agreement between the Company and a Participant setting forth the terms,
     conditions and restrictions of the Award granted to the Participant. An Award Agreement may be an ―Option Agreement,‖ a
     ―Restricted Stock Agreement‖ or a ―Restricted Stock Units Agreement.‖

          (c) “Board” means the Board of Directors of the Company. If one or more Committees have been appointed by the Board to
     administer the Plan, ―Board‖ also means such Committee(s).

           (d) “Code” means the Internal Revenue Code of 1986, as amended, and any applicable regulations promulgated thereunder.

          (e) “Committee” means the Compensation Committee or other committee of the Board duly appointed to administer the Plan
     and having such powers as shall be specified by the Board. Unless the powers of the Committee have been specifically limited, the
     Committee shall have all of the powers of the Board granted herein, including, without

                                                                  1
limitation, the power to amend or terminate the Plan at any time, subject to the terms of the Plan and any applicable limitations
imposed by law.

     (f) “Company” means salesforce.com, inc., a Delaware corporation, or any successor corporation thereto.

     (g) “Consultant” means a person engaged to provide consulting or advisory services (other than as an Employee or a
Director) to a Participating Company.

     (h) “Director” means a member of the Board or of the board of directors of any other Participating Company.

     (i) “Disability” means the permanent and total disability of the Participant within the meaning of Section 22(e)(3) of the
Code.

     (j) “Dividend Equivalent” means a credit, made at the discretion of the Board or as otherwise provided by the Plan, to the
account of a Participant in an amount equal to the cash dividends paid on one share of Stock for each share of Stock represented by
an Award held by such Participant.

      (k) “Employee” means any person treated as an employee (including an officer of the Company or a Director who is also
treated as an employee) in the records of a Participating Company; provided, however, that neither service as a Director nor
payment of a director’s fee shall be sufficient to constitute employment for purposes of the Plan.

     (l) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

       (m) “Fair Market Value” means, as of any date, the value of a share of Stock or other property as determined by the Board,
in its discretion, or by the Company, in its discretion, if such determination is expressly allocated to the Company herein, subject to
the following:

             (i) If, on such date, the Stock is listed on a national or regional securities exchange or market system, the Fair Market
       Value of a share of Stock shall be the closing price of a share of Stock (or the mean of the closing bid and asked prices of a
       share of Stock if the Stock is so quoted instead) as quoted on the Nasdaq National Market, The Nasdaq SmallCap Market or
       such other national or regional securities exchange or market system constituting the primary market for the Stock, as
       reported in The Wall Street Journal or such other source as the Company deems reliable. If the relevant date does not fall on
       a day on which the Stock has traded on such securities exchange or market system, the date on which the Fair Market Value
       shall be established shall be the last day on which the Stock was so traded prior to the relevant date, or such other
       appropriate day as shall be determined by the Board, in its discretion.

           (ii) If, on such date, the Stock is not listed on a national or regional securities exchange or market system, the Fair
       Market Value of a share of Stock shall be

                                                             2
       as determined by the Board in good faith without regard to any restriction other than a restriction which, by its terms, will
       never lapse.

     (n) “Officer” means any person designated by the Board as an officer of the Company.

      (o) “Option” means a right to purchase Stock (subject to adjustment as provided in Section 4.2) pursuant to the terms and
conditions of the Plan. Each Option shall be a nonstatutory stock option, that is an option not intended to qualify as an incentive
stock option within the meaning of Section 422(b) of the Code.

     (p) “Outside Director” means a Director of the Company who is not an Employee or a Consultant.

     (q) “Outside Director Stock Award” means Stock granted to a Participant pursuant to Section 6 of the Plan.

     (r) “Parent Corporation” means any present or future ―parent corporation‖ of the Company, as defined in Section 424(e) of
the Code.

     (s) “Participant” means any eligible person who has been granted one or more Awards.

     (t) “Participating Company” means the Company or any Parent Corporation or Subsidiary Corporation.

    (u) “Participating Company Group” means, at any point in time, all corporations collectively which are then Participating
Companies.

      (v) “Restriction Period” means the period established in accordance with Section 8.2 of the Plan during which shares subject
to a Restricted Stock Award are subject to Vesting Conditions.

     (w) “Restricted Stock” means Stock granted to a Participant pursuant to Section 6 or Section 8 of the Plan.

      (x) “Restricted Stock Unit” means a bookkeeping entry representing a right granted to a Participant pursuant to Section 9 of
the Plan to receive a share of Stock on a date determined in accordance with the provisions of Section 9 and the Participant’s Award
Agreement.

      (y) “Rule 16b-3” means Rule 16b-3 under the Exchange Act, as amended from time to time, or any successor rule or
regulation.

     (z) “Securities Act” means the Securities Act of 1933, as amended.

      (aa) “Service” means a Participant’s employment or service with the Participating Company Group, whether in the capacity
of an Employee, a Director, or a Consultant. A Participant’s Service shall not be deemed to have terminated merely because of a

                                                             3
     change in the capacity in which the Participant renders Service to the Participating Company Group or a change in the Participating
     Company for which the Participant renders such Service, provided that there is no interruption or termination of the Participant’s
     Service. Furthermore, a Participant’s Service shall not be deemed to have terminated if the Participant takes any military leave, sick
     leave, or other bona fide leave of absence approved by the Company. Notwithstanding the foregoing, unless otherwise designated
     by the Company or required by law, a leave of absence shall not be treated as Service for purposes of determining vesting under a
     Participant’s Award Agreement. A Participant’s Service shall be deemed to have terminated either upon an actual termination of
     Service or upon the corporation for which the Participant performs Service ceasing to be a Participating Company. Subject to the
     foregoing, the Company, in its discretion, shall determine whether a Participant’s Service has terminated and the effective date of
     such termination.

           (bb) “Stock” means the common stock of the Company, as adjusted from time to time in accordance with Section 4.2.

          (cc) “Subsidiary Corporation” means any present or future ―subsidiary corporation‖ of the Company, as defined in Section
     424(f) of the Code.

           (dd) “Vesting Conditions” mean those conditions established in accordance with Section 8.2 or Section 9.2 of the Plan prior
     to the satisfaction of which shares of Restricted Stock or Restricted Stock Units remain subject to forfeiture to the Company upon
     the Participant’s termination of Service.

      2.2 Construction. Captions and titles contained herein are for convenience only and shall not affect the meaning or interpretation of
any provision of the Plan. Except when otherwise indicated by the context, the singular shall include the plural and the plural shall
include the singular. Use of the term ―or‖ is not intended to be exclusive, unless the context clearly requires otherwise.

3.    A DMINISTRATION .

      3.1 Administration by the Board. The Plan shall be administered by the Board, including any duly appointed Committee of the
Board. At any time that any class of equity security of the Company is registered pursuant to Section 12 of the Exchange Act, the Plan
shall be administered in compliance with the requirements, if any, of Rule 16b-3. All questions of interpretation of the Plan or of any
Award shall be determined by the Board, and such determinations shall be final and binding upon all persons having an interest in the
Plan or such Award.

      3.2 Authority of Officers. Any Officer shall have the authority to act on behalf of the Company with respect to any matter, right,
obligation, determination or election which is the responsibility of or which is allocated to the Company herein, provided the Officer has
apparent authority with respect to such matter, right, obligation, determination or election.

      3.3 Powers of the Board. In addition to any other powers set forth in the Plan and subject to the provisions of the Plan, the Board
shall have the full and final power and authority, in its discretion:

          (a) to determine the persons to whom, and the time or times at which, Awards shall be granted and the number of shares of
     Stock or units to be subject to each Award;

                                                                  4
           (b) to determine the type of Award granted;

           (c) to determine the Fair Market Value of shares of Stock or other property;

           (d) to determine the terms, conditions and restrictions applicable to each Award (which need not be identical) and any shares
     acquired pursuant thereto, including, without limitation, (i) the exercise or purchase price of shares purchased pursuant to any
     Award, (ii) the method of payment for shares purchased pursuant to any Award, (iii) the method for satisfaction of any tax
     withholding obligation arising in connection with Award, including by the withholding or delivery of shares of Stock, (iv) the
     timing, terms and conditions of the exercisability or vesting of any Award or any shares acquired pursuant thereto, (v) the time of
     the expiration of any Award, (vi) the effect of the Participant’s termination of Service on any of the foregoing, and (vii) all other
     terms, conditions and restrictions applicable to any Award or shares acquired pursuant thereto not inconsistent with the terms of the
     Plan;

           (e) to approve one or more forms of Award Agreement;

           (f) to amend, modify, extend, cancel or renew any Award or to waive any restrictions or conditions applicable to any Award
     or any shares acquired pursuant thereto;

           (g) to accelerate, continue, extend or defer the exercisability or vesting of any Award or any shares acquired pursuant thereto,
     including with respect to the period following a Participant’s termination of Service;

           (h) to prescribe, amend or rescind rules, guidelines and policies relating to the plan, or to adopt sub-plans or supplements to,
     or alternative versions of, the Plan, including, without limitation, as the Board deems necessary or desirable to comply with the laws
     or regulations of or to accommodate the tax policy, accounting principles or custom of, foreign jurisdictions whose citizens may be
     granted Awards; and

            (i) to correct any defect, supply any omission or reconcile any inconsistency in the Plan or any Award Agreement and to make
     all other determinations and take such other actions with respect to the Plan or any Award as the Board may deem advisable to the
     extent not inconsistent with the provisions of the Plan or applicable law.

      3.4 Indemnification. In addition to such other rights of indemnification as they may have as members of the Board or officers or
employees of the Participating Company Group, members of the Board and any officers or employees of the Participating Company
Group to whom authority to act for the Board or the Company is delegated shall be indemnified by the Company against all reasonable
expenses, including attorneys’ fees, actually and necessarily incurred in connection with the defense of any action, suit or proceeding, or
in connection with any appeal therein, to which they or any of them may be a party by reason of any action taken or failure to act under or
in connection with the Plan, or any right granted hereunder, and against all amounts paid by them in settlement thereof (provided such
settlement

                                                                  5
is approved by independent legal counsel selected by the Company) or paid by them in satisfaction of a judgment in any such action, suit
or proceeding, except in relation to matters as to which it shall be adjudged in such action, suit or proceeding that such person is liable for
gross negligence, bad faith or intentional misconduct in duties; provided, however, that within sixty (60) days after the institution of such
action, suit or proceeding, such person shall offer to the Company, in writing, the opportunity at its own expense to handle and defend the
same.

4.    S HARES S UBJECT TO P LAN .

      4.1 Maximum Number of Shares Issuable. Subject to adjustment as provided in Section 4.2, the maximum aggregate number of
shares of Stock that may be issued under the Plan shall be one million (1,000,000) and shall consist of authorized but unissued or
reacquired shares of Stock or any combination thereof. If an outstanding Award for any reason expires or is terminated or canceled
without having been exercised or settled in full, or if shares of Stock acquired pursuant to an Award subject to forfeiture or repurchase are
forfeited or repurchased by the Company at the Participant’s purchase price, the shares of Stock allocable to the terminated portion of
such Award or such forfeiture or repurchased shares of Stock shall again be available for issuance under the Plan. Shares of Stock shall
not be deemed to have been issued pursuant to the Plan to the extent such shares are withheld in satisfaction of tax withholding
obligations pursuant to Section 13.2. If the exercise price of an Option is paid by tender to the Company, or attestation to the ownership,
of shares of Stock owned by the Participant, the number of shares available for issuance under the Plan shall be reduced by the net
number of shares for which the Option is exercised.

      4.2 Adjustments for Changes in Capital Structure. Subject to any required action by the stockholders of the Company, in the
event of any change in the Stock effected without receipt of consideration by the Company, whether through merger, consolidation,
reorganization, reincorporation, recapitalization, reclassification, stock dividend, stock split, reverse stock split, split-up, split-off,
spin-off, combination of shares, exchange of shares, or similar change in the capital structure of the Company, or in the event of payment
of a dividend or distribution to the stockholders of the Company in a form other than Stock (excepting normal cash dividends) that has a
material effect on the Fair Market Value of shares of Stock, appropriate adjustments shall be made in the number and class of shares
subject to the Plan and to any outstanding Awards, and in the exercise per share under any outstanding Award in order to prevent dilution
or enlargement of Participants’ rights under the Plan. For purposes of the foregoing, conversion of any convertible securities of the
Company shall not be treated as ―effected without receipt of consideration by the Company.‖ Any fractional share resulting from an
adjustment pursuant to this Section 4.2 shall be rounded down to the nearest whole number, and in no event may the exercise or purchase
price under any Award be decreased to an amount less than the par value, if any, of the stock subject to such Award. The adjustments
determined by the Committee pursuant to this Section 4.2 shall be final, binding and conclusive.

5.    E LIGIBILITY FOR P ARTICIPATION .

      Only those persons who, at the time of grant, are serving as Outside Directors shall be eligible to become Participants and to be
granted an Award.

                                                                    6
6.    T ERMS AND C ONDITIONS OF O UTSIDE D IRECTOR S TOCK A WARDS .

       This Section 6 shall become effective commencing with the first fiscal quarter of the Company beginning after the effective date of
the initial registration by the Company of its Stock under Section 12 of the Exchange Act and shall continue in effect for each subsequent
fiscal quarter ending during the term (as provided in Section 1.3) of the Plan. Outside Director Stock Awards shall be evidenced by
Award Agreements specifying the number of shares of Stock covered thereby, in such form as the Board shall from time to time
establish. No Outside Director Stock Award or purported Outside Director Stock Award shall be a valid and binding obligation of the
Company unless evidenced by a fully executed Award Agreement. Such Award Agreements may incorporate all or any of the terms of
the Plan by reference and shall comply with and be subject to the following terms and conditions and those terms and conditions set forth
in Section 8 which are not inconsistent with the following:

      6.1 Automatic Grant of Outside Director Stock Awards. On the first day of each fiscal quarter of the Company following the
effective date of this Section 6, each Outside Director whose Service has not terminated prior to such date and who served on the Board
for the entire preceding fiscal quarter shall be granted automatically and without further action of the Board an Outside Director Stock
Award consisting of a number of shares of Stock determined as follows:

          (a) three thousand seven hundred fifty (3,750) shares of Stock in consideration for the Participant’s service as a Director
     during the preceding fiscal quarter; and

         (b) an additional one thousand two hundred fifty (1,250) shares of Stock in consideration for the Participant’s service on each
     committee of the Board on which such Participant served for the entire preceding fiscal quarter; and

           (c) an additional one thousand two hundred fifty (1,250) shares of Stock in consideration for the Participant’s service as the
     chairperson of each committee of the Board for which such Participant served in such capacity for the entire preceding fiscal
     quarter;

     Notwithstanding the foregoing, a Participant may elect not to receive an Outside Director Stock Award by delivering written notice
     of such election to the Board no later than the day prior to the date such Outside Director Stock Award would otherwise be granted.
     A Participant so declining an Outside Director Stock Award shall receive no payment or other consideration in lieu of such declined
     Award. A Participant who has declined an Outside Director Stock Award may revoke such election by delivering written notice of
     such revocation to the Board no later than the day prior to the date such Award would be granted pursuant this Section.

      6.2 Purchase Price. No monetary payment (other than applicable tax withholding, if any) shall be required as a condition of
receiving an Outside Director Stock Award, the consideration for which shall be services actually rendered to the Company or for its
benefit during the preceding fiscal quarter of the Company;

     6.3 Vesting. The shares of Stock granted pursuant to an Outside Director Stock Award shall be fully vested on the date of grant.

                                                                  7
7.    T ERMS AND C ONDITIONS OF O PTIONS .

      Options shall be evidenced by Award Agreements specifying the number of shares of Stock covered thereby, in such form as the
Board shall from time to time establish. No Option or purported Option shall be a valid and binding obligation of the Company unless
evidenced by a fully executed Award Agreement. Award Agreements may incorporate all or any of the terms of the Plan by reference and
shall comply with and be subject to the following terms and conditions:

      7.1 Exercise Price. The exercise price for each Option shall be the Fair Market Value of a share of Stock on the effective date of
grant of the Option. Notwithstanding the foregoing, an Option may be granted with an exercise price lower than the minimum exercise
price set forth above if such Option is granted pursuant to an assumption or substitution for another option in a manner that would qualify
under the provisions of Section 424(a) of the Code.

      7.2 Exercisability and Term of Options. Options shall be exercisable at such time or times, or upon such event or events, and
subject to such terms, conditions, performance criteria and restrictions as shall be determined by the Board and set forth in the Award
Agreement evidencing such Option; provided, however, that no Option shall be exercisable after the expiration of ten (10) years after the
effective date of grant of such Option. Subject to the foregoing, unless otherwise specified by the Board in the grant of an Option, any
Option granted hereunder shall terminate ten (10) years after the effective date of grant of the Option, unless earlier terminated in
accordance with its provisions.

     7.3 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 Participant having a Fair Market Value not less than the
     exercise price, (iii) by delivery of a properly executed notice of exercise together with irrevocable instructions to a broker providing
     for the assignment to the Company 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 such
     other consideration as may be approved by the Board from time to time to the extent permitted by applicable law, or (v) by any
     combination thereof. The Board may at any time or from time to time, by approval of or by amendment to the standard forms of
     Award Agreement described in Section 10, 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

                                                                  8
       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 Participant for more than six (6) months (and not used for another Option exercise by attestation during
       such period) 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, including with respect to one or more Participants specified by the Company notwithstanding that such
       program or procedures may be available to other Participants.

7.4 Effect of Termination of Service.

      (a) Option Exercisability. Subject to earlier termination of the Option as otherwise provided herein and unless otherwise
provided by the Board in the grant of an Option and set forth in the Award Agreement, an Option shall be exercisable after a
Participant’s termination of Service only during the applicable time period determined in accordance with this Section 7.4 and
thereafter shall terminate:

             (i) Disability. If the Participant’s Service terminates because of the Disability of the Participant, the Option, to the
       extent unexercised and exercisable on the date on which the Participant’s Service terminated, may be exercised by the
       Participant (or the Participant’s guardian or legal representative) at any time prior to the expiration of twelve (12) months (or
       such longer period of time as determined by the Board, in its discretion) after the date on which the Participant’s Service
       terminated, but in any event no later than the date of expiration of the Option’s term as set forth in the Award Agreement
       evidencing such Option (the “Option Expiration Date ” ).

             (ii) Death. If the Participant’s Service terminates because of the death of the Participant, the Option, to the extent
       unexercised and exercisable on the date on which the Participant’s Service terminated, may be exercised by the Participant’s
       legal representative or other person who acquired the right to exercise the Option by reason of the Participant’s death at any
       time prior to the expiration of twelve (12) months (or such longer period of time as determined by the Board, in its
       discretion) after the date on which the Participant’s Service terminated, but in any event no later than the Option Expiration
       Date. The Participant’s Service shall be deemed to have terminated on account of death if the Participant dies within three
       (3) months (or such longer period of time as determined by the Board, in its discretion) after the Participant’s termination of
       Service.

             (iii) Termination After Change in Control. If the Participant’s Service terminates for any reason except Disability or
       death upon or within twelve (12) months following a Change in Control (a “Termination After Change in Control” ), then
       the Option (unless terminated pursuant to Section 11.2), to the extent unexercised and exercisable on the date on which the
       Participant’s Service terminated, may be exercised by the Participant (or the Participant’s guardian or legal representative) at
       any time prior to the expiration of six (6) months (or such longer period of time as determined by the Board, in its

                                                             9
                  discretion) after the date on which the Participant’s Service terminated, but in any event no later than the Option Expiration
                  Date.

                        (iv) Other Termination of Service. If the Participant’s Service terminates for any reason, except Disability, death or
                  Termination After Change in Control, the Option, to the extent unexercised and exercisable by the Participant on the date on
                  which the Participant’s Service terminated, may be exercised by the Participant at any time prior to the expiration of three
                  (3) months (or such longer period of time as determined by the Board, in its discretion) after the date on which the
                  Participant’s Service terminated, but in any event no later than the Option Expiration Date.

                 (b) Extension if Exercise Prevented by Law. Notwithstanding the foregoing, if the exercise of an Option within the
           applicable time periods set forth in Section 7.4(a) is prevented by the provisions of Section 12 below, the Option shall remain
           exercisable until three (3) months (or such longer period of time as determined by the Board, in its discretion) after the date the
           Participant is notified by the Company that the Option is exercisable, but in any event no later than the Option Expiration Date.

                 (c) Extension if Participant Subject to Section 16(b). Notwithstanding the foregoing, if a sale within the applicable time
           periods set forth in Section 7.4(a) of shares acquired upon the exercise of the Option would subject the Participant to suit under
           Section 16(b) of the Exchange Act, the Option shall remain exercisable until the earliest to occur of (i) the tenth (10th) day
           following the date on which a sale of such shares by the Participant would no longer be subject to such suit, (ii) the one hundred and
           ninetieth (190th) day after the Participant’s termination of Service, or (iii) the Option Expiration Date.

           7.5 Transferability of Options. During the lifetime of the Participant, an Option shall be exercisable only by the Participant or the
     Participant’s guardian or legal representative. Prior to the issuance of shares of Stock upon the exercise of an Option, the Option shall not
     be subject in any manner to anticipation, alienation, sale, exchange, transfer, assignment, pledge, encumbrance, or garnishment by
     creditors of the Participant or the Participant’s beneficiary, except transfer by will or by the laws of descent and distribution.
     Notwithstanding the foregoing, to the extent permitted by the Board, in its discretion, and set forth in the Award Agreement evidencing
     such Option, an Option shall be assignable or transferable subject to the applicable limitations, if any, described in the General
     Instructions to Form S-8 Registration Statement under the Securities Act.

     8.    T ERMS AND C ONDITIONS OF R ESTRICTED S TOCK A WARDS .

      Restricted Stock Awards shall be evidenced by Award Agreements specifying the number of shares of Stock subject to the Award, in
such form as the Board shall from time to time establish. No Restricted Stock Award or purported Restricted Stock Award shall be a valid and
binding obligation of the Company unless evidenced by a fully executed Award Agreement. Award Agreements evidencing Restricted Stock
may incorporate all or any of the terms of the Plan by reference and shall comply with and be subject to the following terms and conditions:

           8.1 Purchase Price. No monetary payment (other than applicable tax withholding, if any) shall be required as a condition of
     receiving shares of Restricted Stock, the

                                                                       10
consideration for which shall be services actually rendered to a Participating Company or for its benefit. Notwithstanding the foregoing, if
required by applicable law, the Participant shall furnish consideration in the form of cash or past services rendered to a Participating
Company or for its benefit having a value not less than the par value of the shares of Restricted Stock subject to such Award.

       8.2 Vesting and Restrictions on Transfer. Shares issued pursuant to any Restricted Stock Award may or may not be made subject
to Vesting Conditions based upon the satisfaction of such Service requirements, conditions, restrictions or performance criteria as shall be
established by the Board and set forth in the Award Agreement evidencing such Award. During any Restriction Period in which shares
acquired pursuant to a Restricted Stock Award remain subject to Vesting Conditions, such shares may not be sold, exchanged,
transferred, pledged, assigned or otherwise disposed of other than pursuant to an Ownership Change Event, as defined in Section 11.1, or
as provided in Section 8.5. Upon request by the Company, each Participant shall execute any agreement evidencing such transfer
restrictions prior to the receipt of shares of Restricted Stock hereunder and shall promptly present to the Company any and all certificates
representing shares of Restricted Stock acquired hereunder for the placement on such certificates of appropriate legends evidencing any
such transfer restrictions.

      8.3 Voting Rights; Dividends and Distributions. Except as provided in this Section, Section 8.2 and any Award Agreement,
during the Restriction Period applicable to shares subject to a Restricted Stock Award, the Participant shall have all of the rights of a
stockholder of the Company holding shares of Stock, including the right to vote such shares and to receive all dividends and other
distributions paid with respect to such shares. However, in the event of a dividend or distribution paid in shares of Stock or any other
adjustment made upon a change in the capital structure of the Company as described in Section 4.2, then any and all new, substituted or
additional securities or other property (other than normal cash dividends) to which the Participant is entitled by reason of the Participant’s
Restricted Stock Award shall be immediately subject to the same Vesting Conditions as the shares subject to the Restricted Stock Award
with respect to which such dividends or distributions were paid or adjustments were made.

      8.4 Effect of Termination of Service. Unless otherwise provided by the Board in the grant of a Restricted Stock Award and set
forth in the Award Agreement, if a Participant’s Service terminates for any reason, whether voluntary or involuntary (including the
Participant’s death or disability), then the Participant shall forfeit to the Company any shares acquired by the Participant pursuant to a
Restricted Stock Award which remain subject to Vesting Conditions as of the date of the Participant’s termination of Service.

      8.5 Nontransferability of Restricted Stock Award Rights. Prior to the issuance of shares of Stock pursuant to a Restricted Stock
Award, rights to acquire such shares shall not be subject in any manner to anticipation, alienation, sale, exchange, transfer, assignment,
pledge, encumbrance or garnishment by creditors of the Participant or the Participant’s beneficiary, except transfer by will or the laws of
descent and distribution. All rights with respect to a Restricted Stock Award granted to a Participant hereunder shall be exercisable during
his or her lifetime only by such Participant or the Participant’s guardian or legal representative.

                                                                   11
9.    T ERMS AND C ONDITIONS OF R ESTRICTED S TOCK U NIT A WARDS .

     Restricted Stock Unit Awards shall be evidenced by Award Agreements specifying the number of Restricted Stock Units subject to
the Award, in such form as the Board shall from time to time establish. No Restricted Stock Unit Award or purported Restricted Stock
Unit Award shall be a valid and binding obligation of the Company unless evidenced by a fully executed Award Agreement. Award
Agreements evidencing Restricted Stock Units may incorporate all or any of the terms of the Plan by reference and shall comply with and
be subject to the following terms and conditions:

       9.1 Purchase Price. No monetary payment (other than applicable tax withholding, if any) shall be required as a condition of
receiving a Restricted Stock Unit Award, the consideration for which shall be services actually rendered to a Participating Company or
for its benefit.

     9.2 Vesting. Restricted Stock Units may or may not be made subject to Vesting Conditions based upon the satisfaction of such
Service requirements, conditions, restrictions or performance criteria, as shall be established by the Board and set forth in the Award
Agreement evidencing such Award.

      9.3 Voting Rights, Dividend Equivalent Rights and Distributions. Participants shall have no voting rights with respect to shares
of Stock represented by Restricted Stock Units until the date of the issuance of such shares (as evidenced by the appropriate entry on the
books of the Company or of a duly authorized transfer agent of the Company). However, the Board, in its discretion, may provide in the
Award Agreement evidencing any Restricted Stock Unit Award that the Participant shall be entitled to receive Dividend Equivalents with
respect to the payment of cash dividends on Stock having a record date prior to date on which Restricted Stock Units held by such
Participant are settled. Such Dividend Equivalents, if any, shall be paid by crediting the Participant with additional whole Restricted
Stock Units as of the date of payment of such cash dividends on Stock. The number of additional Restricted Stock Units (rounded to the
nearest whole number) to be so credited shall be determined by dividing (a) the amount of cash dividends paid on such date with respect
to the number of shares of Stock represented by the Restricted Stock Units previously credited to the Participant by (b) the Fair Market
Value per share of Stock on such date. Such additional Restricted Stock Units shall be subject to the same terms and conditions and shall
be settled in the same manner and at the same time (or as soon thereafter as practicable) as the Restricted Stock Units originally subject to
the Restricted Stock Unit Award. In the event of a dividend or distribution paid in shares of Stock or any other adjustment made upon a
change in the capital structure of the Company as described in Section 4.2, appropriate adjustments shall be made in the Participant’s
Restricted Stock Unit Award so that it represents the right to receive upon settlement any and all new, substituted or additional securities
or other property (other than normal cash dividends) to which the Participant would be entitled by reason of the shares of Stock issuable
upon settlement of the Award, and all such new, substituted or additional securities or other property shall be immediately subject to the
same Vesting Conditions as are applicable to the Award.

      9.4 Effect of Termination of Service. Unless otherwise provided by the Board in the grant of a Restricted Stock Unit Award and
set forth in the Award Agreement, if a Participant’s Service terminates for any reason, whether voluntary or involuntary (including the

                                                                  12
Participant’s death or disability), then the Participant shall forfeit to the Company any Restricted Stock Units pursuant to the Award
which remain subject to Vesting Conditions as of the date of the Participant’s termination of Service.

       9.5 Settlement of Restricted Stock Unit Awards. The Company shall issue to a Participant on the date on which Restricted Stock
Units subject to the Participant’s Restricted Stock Unit Award vest or on such other settlement date determined by the Board, in its
discretion, and set forth in the Award Agreement one (1) share of Stock (and/or any other new, substituted or additional securities or
other property pursuant to an adjustment described in Section 9.3) for each Restricted Stock Unit then becoming vested or otherwise to be
settled on such date, subject to the withholding of applicable taxes, if any. Notwithstanding the foregoing, if permitted by the Board and
set forth in the Award Agreement, the Participant may elect in accordance with terms specified in the Award Agreement to defer receipt
of all or any portion of the shares of Stock or other property otherwise issuable to the Participant pursuant to this Section.

     9.6 Nontransferability of Restricted Stock Unit Awards. Prior to the issuance of shares of Stock in settlement of a Restricted
Stock Unit Award, the Award shall not be subject in any manner to anticipation, alienation, sale, exchange, transfer, assignment, pledge,
encumbrance, or garnishment by creditors of the Participant or the Participant’s beneficiary, except transfer by will or by the laws of
descent and distribution. All rights with respect to a Restricted Stock Unit Award granted to a Participant hereunder shall be exercisable
during his or her lifetime only by such Participant or the Participant’s guardian or legal representative.

10.   S TANDARD F ORMS OF A WARD A GREEMENT .

     10.1 Award Agreement . Each Award shall comply with and be subject to the terms and conditions set forth in the appropriate
form of Award Agreement approved by the Board and as amended from time to time. Any Award Agreement may consist of an
appropriate form of Notice of Grant and a form of Agreement incorporated therein by reference, or such other form or forms as the Board
may approve from time to time.

     10.2 Authority to Vary Terms . The Board shall have the authority from time to time to vary the terms of any standard form of
Award Agreement either in connection with the grant or amendment of an individual Award or in connection with the authorization of a
new standard form or forms; provided, however, that the terms and conditions of any such new, revised or amended standard form or
forms of Award Agreement are not inconsistent with the terms of the Plan.

11.   C HANGE IN C ONTROL .

      11.1 Definitions.

           (a) An “Ownership Change Event ” shall be deemed to have occurred if any of the following occurs with respect to the
      Company: (i) the direct or indirect sale or exchange in a single or series of related transactions by the stockholders of the Company
      of more than fifty percent (50%) of the voting stock of the Company; (ii) a merger or consolidation in

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which the Company is a party; (iii) the sale, exchange, or transfer of all or substantially all of the assets of the Company; or (iv) a
liquidation or dissolution of the Company.

      (b) A “Change in Control” shall mean an Ownership Change Event or a series of related Ownership Change Events
(collectively, a “Transaction” ) wherein the stockholders of the Company immediately before the Transaction do not retain
immediately after the Transaction, in substantially the same proportions as their ownership of shares of the Company’s voting stock
immediately before the Transaction, direct or indirect beneficial ownership of more than fifty percent (50%) of the total combined
voting power of the outstanding voting securities of the Company or, in the case of a Transaction described in Section 11.1(a)(iii),
the corporation or other business entity to which the assets of the Company were transferred (the “Transferee” ), as the case may
be. For purposes of the preceding sentence, indirect beneficial ownership shall include, without limitation, an interest resulting from
ownership of the voting securities of one or more corporations or other business entities which own the Company or the Transferee,
as the case may be, either directly or through one or more subsidiary corporations or other business entities. The Board shall have
the right to determine whether multiple sales or exchanges of the voting securities of the Company or multiple Ownership Change
Events are related, and its determination shall be final, binding and conclusive.

11.2 Effect of Change in Control on Options.

     (a) Accelerated Vesting . Notwithstanding any other provision of the Plan to the contrary, in the event of a Change in Control,
each Option held by a Participant whose Service has not terminated prior to the date of such Change in Control shall become
immediately exercisable and vested in full as of such date, subject to the consummation of the Change in Control.

      (b) Assumption or Substitution. In the event of a Change in Control, the surviving, continuing, successor, or purchasing entity
or parent thereof, as the case may be (the “Acquiror ” ), may, without the consent of any Participant, either assume the Company’s
rights and obligations under outstanding Options or substitute for outstanding Options substantially equivalent options for the
Acquiror’s stock. Any Options which are not assumed by the Acquiror in connection with the Change in Control nor exercised as of
the time of consummation of the Change in Control shall terminate and cease to be outstanding effective as of the time of
consummation of the Change in Control.

      (c) Cash-Out of Options. The Board may, in its sole discretion and without the consent of any Participant, determine that,
upon the occurrence of a Change in Control, each or any Option outstanding immediately prior to the Change in Control shall be
canceled in exchange for a payment with respect to each vested share of Stock subject to such canceled Option in (i) cash, (ii) stock
of the Company or of a corporation or other business entity a party to the Change in Control, or (iii) other property which, in any
such case, shall be in an amount having a Fair Market Value equal to the excess of the Fair Market Value of the consideration to be
paid per share of Stock in the Change in Control over the exercise price per share under such Option (the “Spread “ ). In the event
such determination is made by the Board, the Spread (reduced by applicable withholding taxes, if any) shall be paid to Participants
in

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      respect of their canceled Options as soon as practicable following the date of the Change in Control.

            11.3 Effect of Change in Control on Restricted Stock Awards. The Board may, in its discretion, provide in any Award
      Agreement evidencing a Restricted Stock Award that, in the event of a Change in Control, the lapsing of the Restriction Period
      applicable to the shares subject to the Restricted Stock Award held by a Participant whose Service has not terminated prior to such
      date shall be accelerated effective immediately prior to the consummation of the Change in Control to such extent as specified in
      such Award Agreement. Any acceleration of the lapsing of the Restriction Period that was permissible solely by reason of this
      Section 11.3 and the provisions of such Award Agreement shall be conditioned upon the consummation of the Change in Control.

          11.4 Effect of Change in Control on Restricted Stock Unit Awards. The Board may, in its discretion, provide in any
      Award Agreement evidencing a Restricted Stock Unit Award that, in the event of a Change in Control, the Restricted Stock Unit
      Award held by a Participant whose Service has not terminated prior to such date shall be settled effective as of the date of the
      Change in Control to such extent as specified in such Award Agreement.

      12.    C OMPLIANCE WITH S ECURITIES L AW .

      The grant of Awards and the issuance of shares of Stock pursuant to any Award shall be subject to compliance with all applicable
requirements of federal, state and foreign law with respect to such securities and the requirements of any stock exchange or market
system upon which the Stock may then be listed. In addition, no Award may be exercised or shares issued pursuant to an Award unless (i)
a registration statement under the Securities Act shall at the time of such exercise or issuance be in effect with respect to the shares
issuable pursuant to the Award or (ii) in the opinion of legal counsel to the Company, the shares issuable pursuant to the Award may be
issued in accordance with the terms of an applicable exemption from the registration requirements of the Securities Act. The inability of
the Company to obtain from any regulatory body having jurisdiction the authority, if any, deemed by the Company’s legal counsel to be
necessary to the lawful issuance and sale of any shares hereunder shall relieve the Company of any liability in respect of the failure to
issue or sell such shares as to which such requisite authority shall not have been obtained. As a condition to issuance of any Stock, the
Company may require the Participant to satisfy any qualifications that may be necessary or appropriate, to evidence compliance with any
applicable law or regulation and to make any representation or warranty with respect thereto as may be requested by the Company.

13.   T AX W ITHHOLDING .

            13.1 Tax Withholding in General. The Company shall have the right to deduct from any and all payments made under the
      Plan, or to require the Participant, through payroll withholding, cash payment or otherwise, including by means of a Cashless
      Exercise of an Option, to make adequate provision for, the federal, state, local and foreign taxes, if any, required by law to be
      withheld by the Participating Company Group with respect to an Award or the shares acquired pursuant thereto. The Company shall
      have no obligation to deliver shares of Stock, to release shares of Stock from an escrow established pursuant to an Award
      Agreement,

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      or to make any payment in cash under the Plan until the Participating Company Group’s tax withholding obligations have been
      satisfied by the Participant.

            13.2 Withholding in Shares. The Company shall have the right, but not the obligation, to deduct from the shares of Stock
      issuable to a Participant upon the exercise or settlement of an Award, or to accept from the Participant the tender of, a number of
      whole shares of Stock having a Fair Market Value, as determined by the Company, equal to all or any part of the tax withholding
      obligations of the Participating Company Group. The Fair Market Value of any shares of Stock withheld or tendered to satisfy any
      such tax withholding obligations shall not exceed the amount determined by the applicable minimum statutory withholding rates.

14.   A MENDMENT OR T ERMINATION OF P LAN .

      The Board may amend, suspend or terminate the Plan at any time. However, without the approval of the Company’s stockholders,
there shall be (a) no increase in the maximum aggregate number of shares of Stock that may be issued under the Plan (except by
operation of the provisions of Section 4.2) and (b) no other amendment of the Plan that would require approval of the Company’s
stockholders under any applicable law, regulation or rule. No amendment, suspension or termination of the Plan shall affect any then
outstanding Award unless expressly provided by the Board. In any event, no amendment, suspension or termination of the Plan may
adversely affect any then outstanding Award without the consent of the Participant unless necessary to comply with any applicable law,
regulation or rule.

15.   M ISCELLANEOUS P ROVISIONS .

             15.1 Repurchase Rights. Shares issued under the Plan may be subject to one or more repurchase options, or other conditions
      and restrictions as determined by the Board in its discretion at the time the Award is granted. The Company shall have the right to
      assign at any time any repurchase right it may have, whether or not such right is then exercisable, to one or more persons as may be
      selected by the Company. Upon request by the Company, each Participant shall execute any agreement evidencing such transfer
      restrictions prior to the receipt of shares of Stock hereunder and shall promptly present to the Company any and all certificates
      representing shares of Stock acquired hereunder for the placement on such certificates of appropriate legends evidencing any such
      transfer restrictions.

             15.2 Provision of Information. Each Participant shall be given access to information concerning the Company equivalent to
      that information generally made available to the Company’s common stockholders.

            15.3 Rights as Outside Director. No person, even though eligible pursuant to Section 5, shall have a right to be selected as a
      Participant, or, having been so selected, to be selected again as a Participant. Nothing in the Plan or any Award granted under the
      Plan shall confer on any Participant a right to remain an Outside Director, or interfere with or limit in any way any right of a
      Participating Company to terminate the Participant’s Service at any time.

          15.4 Rights as a Stockholder. A Participant shall have no rights as a stockholder with respect to any shares covered by an
      Award until the date of the issuance of such shares (as evidenced by the appropriate entry on the books of the Company or of a duly

                                                                 16
authorized transfer agent of the Company). No adjustment shall be made for dividends, distributions or other rights for which the
record date is prior to the date such shares are issued, except as provided in Section 4.2 or another provision of the Plan.

    15.5 Fractional Shares. The Company shall not be required to issue fractional shares upon the exercise or settlement of any
Award.

      15.6 Severability . If any one or more of the provisions (or any part thereof) of this Plan shall be held invalid, illegal or
unenforceable in any respect, such provision shall be modified so as to make it valid, legal and enforceable, and the validity,
legality and enforceability of the remaining provisions (or any part thereof) of the Plan shall not in any way be affected or impaired
thereby.

      15.7 Beneficiary Designation. Subject to local laws and procedures, each Participant may file with the Company a written
designation of a beneficiary who is to receive any benefit under the Plan to which the Participant is entitled in the event of such
Participant’s death before he or she receives any or all of such benefit. Each designation will revoke all prior designations by the
same Participant, shall be in a form prescribed by the Company, and will be effective only when filed by the Participant in writing
with the Company during the Participant’s lifetime. If a married Participant designates a beneficiary other than the Participant’s
spouse, the effectiveness of such designation may be subject to the consent of the Participant’s spouse. If a Participant dies without
an effective designation of a beneficiary who is living at the time of the Participant’s death, the Company will pay any remaining
unpaid benefits to the Participant’s legal representative.

      15.8 Unfunded Obligation. Participants shall have the status of general unsecured creditors of the Company. Any amounts
payable to Participants pursuant to the Plan shall be unfunded and unsecured obligations for all purposes, including, without
limitation, Title I of the Employee Retirement Income Security Act of 1974. No Participating Company shall be required to
segregate any monies from its general funds, or to create any trusts, or establish any special accounts with respect to such
obligations. The Company shall retain at all times beneficial ownership of any investments, including trust investments, which the
Company may make to fulfill its payment obligations hereunder. Any investments or the creation or maintenance of any trust or any
Participant account shall not create or constitute a trust or fiduciary relationship between the Board or any Participating Company
and a Participant, or otherwise create any vested or beneficial interest in any Participant or the Participant’s creditors in any assets
of any Participating Company. The Participants shall have no claim against any Participating Company for any changes in the value
of any assets which may be invested or reinvested by the Company with respect to the Plan.

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                                                                                                                                EXHIBIT 23.2

                                          Consent of Ernst & Young LLP, Independent Auditors

We consent to the reference to our firm under the caption ―Experts‖ and to the use of our report dated February 21, 2004, except for Notes 1
and 7, as to which the date is April 15, 2004, in Amendment No. 3 to the Registration Statement (Form S-1 No. 333-111289) and related
Prospectus of salesforce.com, inc. for the registration of 11,500,000 shares of its common stock.

                                                                                /s/   E RNST & Y OUNG LLP

Palo Alto, California
April 15, 2004