Exhibit 10.3
TRANSITION SERVICES AGREEMENT
This Transition Services Agreement (“Agreement”) is made by and between Graham
Smith (“Executive”) and salesforce.com, Inc. (the “Company”) (collectively
referred to as the “Parties” or individually referred to as a “Party”).
RECITALS
WHEREAS, Executive intends to retire from his employment with the Company no
later than March 31, 2015 (Executive’s actual termination date within this
period, the “Retirement Date”); and
WHEREAS, Executive and Company both wish to ensure an orderly transition of
Executive’s duties and responsibilities throughout the Transition Period (as
defined below);
NOW, THEREFORE, in consideration of the mutual promises made herein, the Company
and Executive hereby agree as follows:
COVENANTS
1.Consideration.
a.    Executive’s Retirement. Executive will retire from his employment with the
Company as of the Retirement Date, and the Company shall process his voluntary
termination accordingly. Executive agrees to execute any documentation deemed
reasonably necessary by the Company to confirm Executive’s resignation from
employment.
b.    Continued Employment; Transition Services. The Company agrees to continue
to employ Executive until the Retirement Date. Beginning on the Effective Date
of this Agreement and through March 31, 2015 (the “Transition Period”),
Executive agrees to (1) continue to serve as the Company’s Chief Financial
Officer until such time as the Board of Directors of the Company determines that
Executive shall no longer serve in such capacity and (2) provide reasonable
transition services to the Company, or such other services as the Company may
request, including, but not limited to, the transitioning of Executive’s
responsibilities and assistance in the hiring of a new Chief Financial Officer
of the Company. Executive agrees to continue to provide such services to the
Company in good faith, to the best of his ability and in the best interests of
the Company. Executive’s employment during the Transition Period shall continue
to be “at-will,” meaning the Company and Executive are both free to terminate
Executive’s employment with or without cause or notice, subject to any
limitations in this Section 1. During the Transition Period, Executive shall
continue to receive his salary at the same rate that he was receiving his salary
immediately prior to the Transition Period, and shall continue to be eligible to
participate in then-available Company benefit programs at the same level as he
would have been eligible to participate in such programs as of immediately prior
to the Transition Period, subject to the terms and conditions, including
eligibility requirements, of such programs. If, at any time during the
Transition

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Period, the Company appoints a new Chief Financial Officer (“CFO”), Executive
will take all steps necessary at the Company’s request to relinquish the title
of CFO and continue providing such transition services as will be determined by
the Company in its sole discretion. Notwithstanding the foregoing, the hiring of
a new CFO will not diminish Executive’s right to continue his employment during
the Transition Period and receive the compensation and benefits to which he is
otherwise entitled under this Agreement during such employment.
c.    Base Salary and Continued Health Coverage Severance Upon Qualifying
Termination. If prior to the end of the Transition Period, Executive’s
employment with the Company is terminated by the Company other than for Cause
(as defined below) or Executive resigns his employment at the request of the
Company if such request is not for Cause (each, a “Qualifying Termination”),
Executive will nevertheless be entitled to (1) a lump sum payment, less any
applicable withholding, of all unpaid base salary compensation to which he would
otherwise be entitled under this Agreement from the Retirement Date through the
end of the Transition Period, and (2) if Executive is covered under the
Company’s group health plan as of the Retirement Date, the Company will continue
to pay for healthcare premiums for Executive and his eligible dependents and
cover Executive and his eligible dependents under the Company’s healthcare plans
that are in place at the time of the Retirement Date, from the Retirement Date
through the end of the Transition Period (or if required by law or necessary to
avoid a violation of the non-discrimination rules of Section 105(h) of the
Internal Revenue Code of 1986, as amended (the “Code”), pay an amount equal to
such premiums (based on cost as of immediately prior to the Qualifying
Termination) in one lump sum payment). Subject to any delay required by
Section 5 of this Agreement, any payment of base salary or premium equivalents
due to Executive pursuant to the prior sentence shall be made to Executive, less
any applicable withholding, within 10 calendar days following Executive’s
Qualifying Termination, provided, however, that if the Retirement Date occurs in
2014 but on or after November 1 of 2014, any cash severance payable under this
paragraph will be paid in arrears on the first payroll date to occur during
calendar year 2015.
d.    Bonus and Bonus Severance Upon Qualifying Termination. Executive will be
entitled to receive 100% of his target bonus opportunity for the 2015 fiscal
year (ending January 31, 2015) with 25% of his target bonus opportunity for the
2015 fiscal year paid on September 30, 2014, or such time as the Company makes
its first fiscal 2015 bonus installment payment to all of its similarly situated
employees under the same bonus program, regardless of Executive’s or Company’s
performance, provided that Executive remains employed through the payment date
of such bonus. Alternatively, if prior to such date, Executive has a Qualifying
Termination, subject to any delay required by Section 5 of this Agreement, any
payment that, but for such Qualifying Termination, otherwise would have been due
to Executive pursuant to the foregoing sentence shall be made to Executive, less
any applicable withholding, at the same time as provided for cash severance
payments under Section 1(c) above. If Executive resigns his employment at any
time prior to the end of the Transition Period, for any reason other than as
provided in the prior sentence, or his employment is terminated by the Company
for Cause, he shall not be entitled to any bonus payment, other than any amounts
already paid.

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e.    Definition of Cause. For purposes of this Agreement, 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.
f.    Equity Awards and Equity Severance Upon Qualifying Termination. Executive
will continue to vest in Executive’s outstanding Company stock options and
restricted stock unit awards in accordance with their terms through and
including the Retirement Date, and no more. Should Executive have a Qualifying
Termination before the end of the Transition Period, then the vesting of
Executive’s then-outstanding stock options and restricted stock unit awards will
accelerate such that Executive will vest in the number of shares of Company
common stock subject to each such equity award that would have vested had
Executive remained employed through the Transition Period, and no further Shares
subject to such awards will vest. Any options (or portion thereof) that vest
pursuant to the prior sentence will be immediately vested as of the Retirement
Date and shall be exercisable pursuant to the terms of the applicable award; any
restricted stock units that vest pursuant to the prior sentence will be
immediately vested as of the Retirement Date and will be settled, subject to any
delay required under Section 5 of this Agreement, (1) if granted under the 2004
Equity Incentive Plan, in accordance with the original vesting schedule as
provided under the restricted stock unit agreement, and (2) if granted under the
2013 Equity Incentive Plan, as soon as practicable upon or following the
Retirement Date. Any equity awards that are unvested on the Retirement Date will
be forfeited permanently on that date and never will become vested (except as
may be provided pursuant to the Change of Control and Retention Agreement
between the Company and Executive dated as of December 22, 2008 (the “Retention
Agreement”) if a “Change of Control” (as defined under the Retention Agreement)
occurs prior to the Retirement Date, as further discussed under Section 2
below). In all other respects, the exercise of Executive’s vested options and
Shares shall continue to be governed by the terms and conditions of the
applicable award agreement and the Company’s equity plan under which the award
was granted.

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2.    Impact on Other Arrangements. Executive understands and agrees that except
as expressly provided for in this Agreement, Executive shall not be entitled to
any other consideration or separation benefits, including, but not limited to,
any severance payments, equity benefits, or other severance benefits provided
for in the offer letter between Executive and the Company on August 8, 2007 (the
“Offer Letter”). However, if, during Executive’s employment during the
Transition Period, the Company completes a “Change of Control” (as defined in
the Retention Agreement) and Executive becomes entitled to receive benefits
under his Retention Agreement, Executive will not receive any severance
payments, equity benefits, or other severance benefits provided in this
Agreement and instead will receive only the benefits provided under the
Retention Agreement under the terms and conditions provided thereunder, and any
severance payments and benefits already provided under this Agreement will
reduce the like-kind payments and benefits provided under the Retention
Agreement. If, during Executive’s employment during the Transition Period, the
Company completes a Change of Control but Executive does not become entitled to
receive benefits under his Retention Agreement, he will remain entitled to
receive benefits under this Agreement. If no Change of Control occurs prior to
the Retirement Date, the Retention Agreement will, as of the Retirement Date, be
of no further force and effect, except with respect to Section 4 (“Golden
Parachute Excise Tax Best Results”) of the Retention Agreement, which Section 4
shall remain in full force and effect, and Executive will not be entitled to
receive any severance benefits, equity benefits or other benefits thereunder.
Notwithstanding the foregoing, if the benefits under this Agreement would be
greater in the aggregate than the benefits under the Retention Agreement in the
aggregate, Executive shall receive the applicable benefits under this Agreement.
For purposes of clarity, Section 4 of the Retention Agreement applies to
payments under this Retention Agreement.
3.    Benefits. Except as provided in Section 1(c) above, Executive’s health
insurance benefits shall cease on the Retirement Date occurs, subject to
Executive’s right to continue his health insurance under COBRA. Except as
provided in this Agreement, Executive’s participation in all benefits and
incidents of employment, including, but not limited to, vesting in stock
options, and the accrual of bonuses, vacation, and paid time off, will cease as
of the Retirement Date.
4.    Payment of Salary and Receipt of All Benefits. Executive acknowledges and
represents that, other than the consideration specified in this Agreement,
Executive has received and is not entitled to any additional salary, wages,
bonuses, accrued vacation/paid time off, premiums, leaves, housing allowances,
relocation costs, interest, severance, outplacement costs, fees, commissions,
stock, stock options, vesting, and any and all other benefits and compensation
due to Executive.

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5.    Tax Consequences.
a.    General. The Company makes no representations or warranties with respect
to the tax consequences of the payments provided to Executive or made on his
behalf under the terms of this Agreement. Executive agrees and understands that
he is responsible for payment, if any, of personal local, personal state, and/or
personal federal taxes on the payments and any other consideration provided
hereunder by the Company and any penalties or assessments thereon. Executive
further agrees to indemnify and hold the Company harmless from any claims,
demands, deficiencies, penalties, interest, assessments, executions, judgments,
or recoveries by any government agency against the Company for any amounts
claimed due on account of (a) Executive’s failure to pay or Executive’s delayed
payment of Executive’s personal federal or personal state taxes, or (b) damages
sustained by the Company by reason of any claims, specifically set forth in
(a) above, including attorneys’ fees and costs.
b.    Notwithstanding anything in this Agreement to the contrary, no severance
payments or benefits under that become payable under this Agreement will be paid
to Executive until he has a “separation from service” within the meaning of
Section 409A of the Code and the final treasury regulations (the “Treasury
Regulations”) and official guidance thereunder (collectively, as each may be
amended from time to time, “Section 409A”). References to Retirement Date or
termination date or similar terms are intended to refer to Executive’s
separation from service within the meaning of Section 409A. At no time during
his employment during the Transition Period shall Executive’s duties constitute
any less than twenty-percent (20%) of the services provided by Executive to the
Company, on average, during the 36 months of employment immediately preceding
the start of the Transition Period. Each payment and benefit payable under this
Agreement is intended to constitute a separate payment for purposes of Treasury
Regulation Section 1.409A-2(b)(2)(iii). Payments under this Agreement are
intended to comply with the requirements of Section 409A so that none of the
severance payments and benefits to be provided hereunder will be subject to any
additional tax imposed under Section 409A, and any ambiguities or ambiguous
terms herein will be interpreted to so comply or to otherwise be exempt from
Section 409A. Notwithstanding anything to the contrary in this Agreement, if
Executive is a “specified employee” within the meaning of Section 409A at the
time of Executive’s separation from service, then any severance payments or
separation benefits to the extent that the same constitute deferred compensation
under Section 409A, otherwise due to Executive on or within the six (6) month
period following Executive’s separation from service (whether under this
Agreement or otherwise) will accrue during such six (6) month period and will
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, will 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 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 payments and benefits shall be payable in accordance with the payment
schedule applicable to each payment or benefit. 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,

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appropriate or desirable to avoid imposition of any additional tax or income
recognition prior to actual payment to Employee under Section 409A. In no event
will the Company reimburse Executive for any tax obligations arising under
Section 409A.
6.    Trade Secrets and Confidential Information/Company Property. Executive
reaffirms and agrees to observe and abide by the terms of his Employee
Inventions and Proprietary Rights Assignment Agreement (the “Confidentiality
Agreement”) (except as provided herein), specifically including the provisions
therein regarding nondisclosure of the Company’s trade secrets and confidential
and proprietary information. Executive agrees that upon the Retirement Date, or
date of termination, whichever comes first, he will return all documents and
other items provided to Executive by the Company, developed or obtained by
Executive in connection with his employment with the Company, or otherwise
belonging to the Company.
7.    ARBITRATION. THE PARTIES AGREE THAT ANY AND ALL DISPUTES ARISING OUT OF
THE TERMS OF THIS AGREEMENT, AND THEIR INTERPRETATION, SHALL BE SUBJECT TO
ARBITRATION IN THE CITY AND COUNTY OF SAN FRANCISCO, BEFORE JUDICIAL
ARBITRATION & MEDIATION SERVICES (“JAMS”), PURSUANT TO ITS EMPLOYMENT
ARBITRATION RULES & PROCEDURES (“JAMS RULES”). THE ARBITRATOR MAY GRANT
INJUNCTIONS AND OTHER RELIEF IN SUCH DISPUTES. THE ARBITRATOR SHALL ADMINISTER
AND CONDUCT ANY ARBITRATION IN ACCORDANCE WITH CALIFORNIA LAW, INCLUDING THE
CALIFORNIA CODE OF CIVIL PROCEDURE, AND THE ARBITRATOR SHALL APPLY SUBSTANTIVE
AND PROCEDURAL CALIFORNIA LAW TO ANY DISPUTE OR CLAIM, WITHOUT REFERENCE TO ANY
CONFLICT-OF-LAW PROVISIONS OF ANY JURISDICTION. TO THE EXTENT THAT THE JAMS
RULES CONFLICT WITH CALIFORNIA LAW, CALIFORNIA LAW SHALL TAKE PRECEDENCE. THE
DECISION OF THE ARBITRATOR SHALL BE FINAL, CONCLUSIVE, AND BINDING ON THE
PARTIES TO THE ARBITRATION. THE PARTIES AGREE THAT THE PREVAILING PARTY IN ANY
ARBITRATION SHALL BE ENTITLED TO INJUNCTIVE RELIEF IN ANY COURT OF COMPETENT
JURISDICTION TO ENFORCE THE ARBITRATION AWARD. THE PARTIES TO THE ARBITRATION
SHALL EACH PAY AN EQUAL SHARE OF THE COSTS AND EXPENSES OF SUCH ARBITRATION, AND
EACH PARTY SHALL SEPARATELY PAY FOR ITS RESPECTIVE COUNSEL FEES AND EXPENSES;
PROVIDED, HOWEVER, THAT THE ARBITRATOR SHALL AWARD ATTORNEYS’ FEES AND COSTS TO
THE PREVAILING PARTY, EXCEPT AS PROHIBITED BY LAW. THE PARTIES HEREBY AGREE TO
WAIVE THEIR RIGHT TO HAVE ANY DISPUTE BETWEEN THEM RESOLVED IN A COURT OF LAW BY
A JUDGE OR JURY. NOTWITHSTANDING THE FOREGOING, THIS SECTION WILL NOT PREVENT
EITHER PARTY FROM SEEKING INJUNCTIVE RELIEF (OR ANY OTHER PROVISIONAL REMEDY)
FROM ANY COURT HAVING JURISDICTION OVER THE PARTIES AND THE SUBJECT MATTER OF
THEIR DISPUTE RELATING TO THIS AGREEMENT AND THE AGREEMENTS INCORPORATED HEREIN
BY REFERENCE. SHOULD ANY PART OF THE ARBITRATION AGREEMENT CONTAINED IN THIS
PARAGRAPH CONFLICT WITH ANY OTHER ARBITRATION AGREEMENT BETWEEN THE PARTIES, THE
PARTIES AGREE THAT THIS ARBITRATION AGREEMENT SHALL GOVERN.

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8.    Authority. The Company represents and warrants that the undersigned has
the authority to act on behalf of the Company and to bind the Company and all
who may claim through it to the terms and conditions of this Agreement.
Executive represents and warrants that he has the capacity to act on his own
behalf and on behalf of all who might claim through him to bind them to the
terms and conditions of this Agreement. Each Party warrants and represents that
there are no liens or claims of lien or assignments in law or equity or
otherwise of or against any of the claims or causes of action released herein.
9.    No Representations. Executive represents that he has had an opportunity to
consult with an attorney, and has carefully read and understands the scope and
effect of the provisions of this Agreement. Executive has not relied upon any
representations or statements made by the Company that are not specifically set
forth in this Agreement.
10.    Severability. In the event that any provision or any portion of any
provision hereof or any surviving agreement made a part hereof becomes or is
declared by a court of competent jurisdiction or arbitrator to be illegal,
unenforceable, or void, this Agreement shall continue in full force and effect
without said provision or portion of provision.
11.    Entire Agreement. This Agreement represents the entire agreement and
understanding between the Company and Executive concerning the subject matter of
this Agreement and Executive’s employment with and retirement from the Company
and the events leading thereto and associated therewith, and supersedes and
replaces any and all prior agreements and understandings concerning the subject
matter of this Agreement and Executive’s relationship with the Company, with the
exception of the Confidentiality Agreement, the equity plans and equity
agreements under which Executive’s Company equity awards are granted, and the
Retention Agreement, in each case as modified herein. For the sake of clarity,
Executive specifically acknowledges that the Offer Letter’s provisions with
respect to receipt of any severance payments or benefits in the event of his
termination without cause or otherwise are expressly superseded by this
Agreement and that the Executive shall receive no compensation or consideration
of any sort under the Offer Letter. Executive further acknowledges that if no
Change of Control occurs prior to the Retirement Date, the Retention Agreement
will, as of the Retirement Date, be of no further force and effect, except with
respect to Section 4 (“Golden Parachute Excise Tax Best Results”) of the
Retention Agreement, which Section 4 shall remain in full force and effect, and
Executive will not be entitled to receive any severance benefits, equity
benefits or other benefits thereunder.
12.    No Oral Modification. This Agreement may only be amended in a writing
signed by Executive and the Company’s Chief Legal Officer.
13.    Governing Law. This Agreement shall be governed by the laws of the State
of California, without regard for choice-of-law provisions. Executive consents
to personal and exclusive jurisdiction and venue in the State of California.
14.    Effective Date. This Agreement will become effective on the date it has
been signed by both Parties (the “Effective Date”).

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15.    Counterparts. This Agreement may be executed in counterparts and by
facsimile, and each counterpart and facsimile shall have the same force and
effect as an original and shall constitute an effective, binding agreement on
the part of each of the undersigned.
16.    Voluntary Execution of Agreement. Executive understands and agrees that
he executed this Agreement voluntarily, and without any duress or undue
influence on the part or behalf of the Company or any third party. Executive
acknowledges that: (a) he has read this Agreement; (b) he has been represented
in the preparation, negotiation, and execution of this Agreement by legal
counsel of his own choice or has elected not to retain legal counsel; (c) he
understands the terms and consequences of this Agreement; and (d) he is fully
aware of the legal and binding effect of this Agreement.

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IN WITNESS WHEREOF, the Parties have executed this Agreement on the respective
dates set forth below.

 
 
GRAHAM SMITH, an individual

 
 
 
Dated: February 27, 2014
 
/s/ Graham Smith
 
 
Graham Smith
 
 
 

 
 
SALESFORCE.COM, INC.
 
 
 
Dated: February 27, 2014
By
/s/ Burke Norton
 
 
Burke Norton
 
 
Chief Legal Officer

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