Tesla 2011 Annual Report Download - page 134

Table of Contents
Information regarding our stock option grants during 2008, 2009 and the six months prior to the completion of our IPO, including the grant
date; the number of stock options issued with each grant; and the exercise price, which equals the grant date fair value of the underlying common
stock for each grant of stock options, is summarized as follows:
Included in our December 4, 2009 stock option grants were 6,711,972 stock options granted to our Chief Executive Officer in two separate
grants. In recognition of his and our company’s achievements and to create incentives for future success, our Board of Directors approved an
option grant to our Chief Executive Officer representing 4% of our fully-diluted share base prior to such grant as of December 4, 2009, or
3,355,986 stock options, with 1/4th of the shares vesting immediately, and 1/36th of the remaining shares scheduled to vest each month over
three years, assuming continued employment through each vesting date. In addition, to create incentives for the attainment of clear performance
objectives around a key element of our current business plan— the successful launch and commercialization of the Model S—the Board of
Directors approved an additional option grant to our Chief Executive Officer totaling an additional 4% of our fully-diluted shares prior to such
grant as of December 4, 2009, or 3,355,986 stock options, with a vesting schedule based entirely on the attainment of performance objectives as
follows, assuming Mr. Musk’s continued employment and service to us through each vesting date:
If he does not meet one or more of the above milestones prior to the fourth anniversary of the date of the grant, he will forfeit his right to
the unvested portion of the grant.
Due to the significant number of stock options granted to our Chief Executive Officer, we valued these December 2009 grants by using the
following grant-specific Black-Scholes assumptions: risk-free interest rate of
133
Grant Date
Number of
Options
Granted
Exercise
Price and
Fair Value
per Share of
Common
Stock
June 4, 2008
762,137
$
2.70
July 8, 2008
278,308
2.70
September 3, 2008
200,155
2.70
October 29, 2008
205,156
2.70
March 2, 2009
214,813
2.70
April 13, 2009
1,005,837
2.70
April 22, 2009
105,184
2.70
August 4, 2009
323,063
2.94
October 21,2009
590,638
6.15
December 4, 2009
7,977,444
6.63
December 16, 2009
58,995
6.63
March 3, 2010
402,660
9.96
April 28, 2010
256,320
13.23
June 12, 2010
1,135,710
14.17
•
1/4th of the shares subject to the option are scheduled to vest upon the successful completion of the Model S Engineering Prototype;
•
1/4th of the shares subject to the option are scheduled to vest upon the successful completion of the Model S Validation Prototype;
•
1/4th of the shares subject to the option are scheduled to vest upon the completion of the first Model S Production Vehicle; and
•
1/4th of the shares subject to the option are scheduled to vest upon the completion of the 10,000th Model S Production Vehicle.