Exhibit 10.13
SALESFORCE.COM,
INC.
CHANGE OF CONTROL AND RETENTION
AGREEMENT
This Change of Control and Retention
Agreement (the “Agreement”) is made and entered into by
and between Marc Benioff (the “Executive”) and
salesforce.com, inc. (the “Company”), as of
December 4, 2008.
RECITALS
1. It is possible that the Company
may from time to time receive acquisition proposals by other
companies. The Board of Directors of the Company (the
“Board”) recognizes that consideration of any such
proposals can be a distraction to the Executive and can cause the
Executive to consider alternative employment opportunities. The
Board has determined that it is in the best interests of the
Company and its stockholders to assure that the Company will have
the continued dedication and objectivity of the Executive,
notwithstanding the possibility, threat or occurrence of a Change
of Control (as defined herein) of the Company.
2. The Board believes that it is in
the best interests of the Company and its stockholders to provide
the Executive with an incentive to continue his or her employment
and to motivate the Executive to maximize the value of the Company
upon a Change of Control for the benefit of its
stockholders.
3. The Board believes that it is
imperative to provide the Executive with certain benefits upon the
Executive’s termination of employment following a Change of
Control. These benefits will provide the Executive with enhanced
financial security and incentive and encouragement to remain with
the Company notwithstanding the possibility of a Change of
Control.
4. Certain capitalized terms used in
the Agreement are defined in Section 5 below.
AGREEMENT
NOW, THEREFORE, in consideration of
the mutual covenants contained herein, the parties hereto agree as
follows:
1. Effective Date and Term of
Agreement . This Agreement shall be effective on the date that
is six (6) months after the Agreement has been signed by both
Parties. This Agreement shall terminate upon the date that all of
the obligations of the parties hereto with respect to this
Agreement have been satisfied.
2. At-Will Employment . The
Company and the Executive acknowledge that the Executive’s
employment is and shall continue to be at-will, as defined under
applicable law, except as may otherwise be specifically provided
under the terms of any written formal employment agreement or offer
letter between the Company and the Executive (an “Employment
Agreement”). If the Executive’s employment terminates
for any reason, including (without limitation) any termination
prior to a Change of Control, the Executive shall not be entitled
to any payments, benefits, damages, awards or compensation other
than as provided by this Agreement or under his or her Employment
Agreement, or as may otherwise be available in accordance with the
Company’s established employee plans.
3. Severance Benefits
.
(a) Involuntary Termination Other
than for Cause or Voluntary Termination for Good Reason During the
Change of Control Period . If within the period commencing
three months prior to a Change of Control and ending eighteen
(18) months following a Change of Control (the “Change
of Control Period”) (i) the Executive terminates his or
her employment with the Company (or any parent or subsidiary of the
Company) for “Good Reason” (as defined herein), or
(ii) the Company (or any parent or subsidiary of the Company)
terminates the Executive’s employment for other than
“Cause” (as defined herein), and the Executive signs
and does not revoke a standard release of claims with the Company
in a form substantially similar to that attached hereto as
Exhibit A (the “Release”), then the Executive
shall receive the following severance benefits from the
Company:
(i) Severance Payment . The
Executive shall receive a lump-sum severance payment (less
applicable withholding taxes) equal to two hundred percent
(200%) of the Executive’s annual base salary (as in
effect immediately prior to (A) the Change of Control, or
(B) the Executive’s termination, whichever is greater)
plus two hundred percent (200%) of the Executive’s
target bonus for the fiscal year in which the Change of Control or
the Executive’s termination occurs, whichever is
greater.
(ii) Stock Options, Restricted
Stock Units, Other Equity Compensation . All of the
Executive’s then outstanding stock options to purchase shares
of the Company’s Common Stock (the “Options”)
shall immediately vest one hundred percent (100%). The Options
shall remain exercisable following the termination of employment
for the period prescribed in the respective option agreements.
Additionally, all of Executive’s outstanding Restricted Stock
Units (the “Restricted Stock Units”) shall immediately
vest one hundred percent (100%). All other Company equity
compensation held by Executive shall also immediately vest one
hundred percent (100%).
(iii) Continued Executive
Benefits . Subject to the Executive timely electing
continuation coverage under Title X of the Consolidated Budget
Reconciliation Act of 1985 (“COBRA”), the Executive
shall receive one-hundred percent (100%) Company-paid health,
dental and vision coverage (the “Company-Paid
Coverage”). If such coverage included the Executive’s
dependents immediately prior to the Change of Control, such
dependents shall also be covered at Company expense. Company-Paid
Coverage shall continue until the earlier of (i) twenty
(24) months from the date of termination (irrespective of any
shorter maximum coverage period provided under COBRA), or
(ii) the date upon which the Executive and his dependents
become covered under another employer’s group health, dental
and vision plans that provide Executive and his dependents with
comparable benefits and levels of coverage. Company-Paid Coverage
shall be paid directly by the Company to the applicable insurer
and/or administrator when premiums for such coverage are due in
accordance with the terms and conditions of the applicable
insurance policy or administrative services agreement.
Notwithstanding the foregoing, if providing the Company-Paid
Coverage would violate the non-discrimination rules of
Section 105(h) of the Internal Revenue Code of 1986, as
amended (the “Code”), then Executive shall receive, in
lieu of the Company-Paid Coverage, an additional lump-sum payment
equal to $80,000, less applicable withholding.
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(b) Timing of Severance
Payments . Subject to Section 3(f) below, the severance
payments to which Executive is entitled shall be paid by the
Company to Executive in cash and in full, not later than ten
(10) calendar days after the date upon which the Release
becomes effective. If the Executive should die before all amounts
have been paid, such unpaid amounts shall be paid in a lump-sum
payment (less any withholding taxes) to the Executive’s
designated beneficiary, if living, or otherwise to the personal
representative of the Executive’s estate.
(c) Voluntary Resignation;
Termination for Cause . If the Executive’s employment
with the Company terminates (i) voluntarily by the Executive
other than for Good Reason or Disability or (ii) for Cause by
the Company, then the Executive shall not be entitled to receive
severance or other benefits except for those (if any) as may then
be established under the Company’s then existing severance
and benefits plans and practices or pursuant to other written
agreements with the Company.
(d) Termination Outside Change of
Control Period . In the event the Executive’s employment
is terminated for any reason outside of the Change of Control
Period, then the Executive shall be entitled to receive severance
and any other benefits only as may then be established under the
Company’s existing written severance and benefits plans and
practices or pursuant to other written agreements with the
Company.
(e) Exclusive Remedy . In the
event of a termination of Executive’s employment within the
Change of Control Period, the provisions of this Section 3 are
intended to be and are exclusive and in lieu of any other rights or
remedies to which the Executive or the Company may otherwise be
entitled, whether at law, tort or contract, in equity, or under
this Agreement. The Executive shall be entitled to no benefits,
compensation or other payments or rights upon termination of
employment following a Change in Control other than those benefits
expressly set forth in this Section 3.
(f) Code Section 409A
.
(i) Notwithstanding anything to the
contrary in this Agreement, if Executive is a “specified
employee” within the meaning of Section 409A of the
Code, and the final regulations and any guidance promulgated
thereunder (“Section 409A”) at the time of
Executive’s separation from service (as such term is defined
in Section 409A), then the cash severance benefits payable to
Executive under this Agreement, if any, and any other severance
payments or separation benefits that may be considered deferred
compensation under Section 409A (together, the “Deferred
Compensation Separation Benefits”) otherwise due to Executive
on or within the six (6) month period following
Executive’s separation from service shall accrue during such
six (6) month period and shall become payable in a lump sum
payment on the date six (6) months and one (1) day
following the date of Executive’s separation from service.
All subsequent payments, if any, shall be payable in accordance
with the payment schedule applicable to each payment or benefit.
Notwithstanding anything herein to the contrary, if Executive dies
following his separation from
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service but prior to the six
(6) month anniversary of his date of separation from service,
then any payments delayed in accordance with this Section shall be
payable in a lump sum as soon as administratively practicable after
the date of Executive’s death and all other Deferred
Compensation Separation Benefits shall be payable in accordance
with the payment schedule applicable to each payment or
benefit.
(ii) It is the intent of this
Agreement to comply with the requirements of Section 409A so
that none of the severance payments and benefits to be provided
hereunder shall be subject to the additional tax imposed under
Section 409A, and any ambiguities herein shall be interpreted
to so comply. The Company and Executive agree to work together in
good faith to consider amendments to this Agreement and to take
such reasonable actions which are necessary, appropriate or
desirable to avoid imposition of any additional tax or income
recognition under Section 409A prior to actual payment to
Executive.
(iii) Notwithstanding any other
provisions of this Agreement, Executive’s receipt of
severance payments and benefits under this Agreement is conditioned
upon Executive signing and not revoking the Release and subject to
the Release becoming effective within sixty (60) days
following Executive’s termination of employment (the
“Release Period”). No severance will be paid or
provided until the Release becomes effective. No severance will be
paid or provided unless the Release becomes effective during the
Release Period. In the event Executive’s separation from
service occurs on or after November 1 of any year, any delayed
severance will be paid in arrears on the first payroll date to
occur during the following calendar year, or such later time as
required by Section 409A.
4. Golden Parachute Excise Tax
Best Results . In the event that the severance and other
benefits provided for in this agreement or otherwise payable to
Executive (a) constitute “parachute payments”
within the meaning of Code Section 280G and (b) would be
subject to the excise tax imposed by Section 4999 of the Code,
then such benefits shall be either be:
(i) delivered in full, or
(ii) delivered as to such lesser
extent which would result in no portion of such severance benefits
being subject to excise tax under Section 4999 of the
Code,
whichever of the foregoing amounts,
taking into account the applicable federal, state and local income
and employment taxes and the excise tax imposed by
Section 4999, results in the receipt by Executive, on an
after-tax basis, of the greatest amount of benefits,
notwithstanding that all or some portion of such benefits may be
taxable under Section 4999 of the Code. Unless the Company and
Employee otherwise agree in writing, any determination required
under this Section 4 will be made in writing by a national
“Big Four” accounting firm selected by the Company or
such other person or entity to which the parties mutually agree
(the “Accountants”), whose determination will be
conclusive and binding upon Employee and the Company for all
purposes. For purposes of making the calculations required by this
Section 4, the Accountants may make reasonable assumptions and
approximations concerning applicable taxes and may rely on
reasonable, good faith interpretations concerning the application
of Sections 280G and 4999 of the Code. The Company and the
Executive shall furnish to the Accountants such information and
documents as the Accountants may
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reasonably request in order to make a
determination under this Section. The Company shall bear all costs
the Accountants may reasonably incur in connection with any
calculations contemplated by this Section 4. Any reduction in
payments and/or benefits required by this Section 4 shall
occur in the following order: (1) reduction of cash payments;
and (2) reduction of other benefits paid to Executive. In the
event that acceleration of vesting of equity awards is to be
reduced, such acceleration of vesting shall be cancelled in the
reverse order of the date of grant for Executive’s equity
awards.
5. Definition of Terms . The
following terms referred to in this Agreement shall have the
following meanings:
(a) Cause .
“Cause” shall mean (i) an act of personal
dishonesty taken by the Executive in connection with his
responsibilities as an employee and intended to result in
substantial personal enrichment of the Executive,
(ii) Executive being convicted of a felony, (iii) a
willful act by the Executive which constitutes gross misconduct and
which is injurious to the Company, (iv) following delivery to
the Executive of a written demand for performance from the Company
which describes the basis for the Company’s reasonable belief
that the Executive has not substantially performed his duties,
continued violations by the Executive of the Executive’s
obligations to the Company which are demonstrably willful and
deliberate on the Executive’s part.
(b) Change of Control .
“Change of Control” means the occurrence of any of the
following, in one or a series of related transactions:
(i) Any “person” (as
such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended) becomes the “beneficial
owner” (as defined in Rule 13d-3 under said Act), directly or
indirectly, of securities of the Company representing fifty percent
(50%) or more of the total voting power represented by the
Company’s then outstanding voting securities; or
(ii) Any action or event occurring
within a two-year period, as a result of which fewer than a
majority of the directors are Incumbent Directors. “Incumbent
Directors” shall mean directors who either (A) are
directors of the Company as
