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TESLA MOTORS INC
FORM 10-K
(Annual Report)
Filed 02/24/16 for the Period Ending 12/31/15
Address 3500 DEER CREEK RD
PALO ALTO, CA 94070
Telephone 650-681-5000
CIK 0001318605
Symbol TSLA
SIC Code 3711 - Motor Vehicles and Passenger Car Bodies
Industry Auto & Truck Manufacturers
Sector Consumer Cyclical
Fiscal Year 12/31
http://www.edgar-online.com
© Copyright 2016, EDGAR Online, Inc. All Rights Reserved.
Distribution and use of this document restricted under EDGAR Online, Inc. Terms of Use.

Table of contents

  • Page 1
    TESLA MOTORS INC FORM 10-K (Annual Report) Filed 02/24/16 for the Period Ending 12/31/15 Address Telephone CIK Symbol SIC Code Industry Sector Fiscal Year 3500 DEER CREEK RD PALO ALTO, CA 94070 650-681-5000 0001318605 TSLA 3711 - Motor Vehicles and Passenger Car Bodies Auto & Truck Manufacturers ...

  • Page 2
    ... from to Commission File Number: 001-34756 (Exact name of registrant as specified in its charter) Tesla Motors, Inc. Delaware (State or other jurisdiction of incorporation or organization) 3500 Deer Creek Road Palo Alto, California (Address of principal executive offices) 91-2197729...

  • Page 3
    TESLA MOTORS, INC. ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2015 INDEX PART I. Item 1. Item 1A. Item 1B. Item 2. Item 3. Item 4. PART II. Business Risk Factors Unresolved Staff Comments Properties Legal Proceedings Mine Safety Disclosures Market for ...

  • Page 4
    ... include, but are not limited to, statements concerning our strategy, future operations, future financial position, future revenues, projected costs, profitability, expected cost reductions, capital adequacy, expectations regarding demand and acceptance for our technologies, growth opportunities and...

  • Page 5
    ... of product development and the capital efficiency of our business. We are also continuing to build our network of Superchargers in the United States, Europe and Asia to provide fast charging that enables convenient long distance travel. In addition to developing our own vehicles, we sell energy...

  • Page 6
    ... Applications Using the energy management technologies and manufacturing processes developed for our vehicle powertrain systems, we have developed energy storage products for use in homes, commercial sites and utilities. The applications for these battery systems include backup power, peak demand...

  • Page 7
    ... braking" functionality, which captures energy from the wheels to charge the battery pack when needed. Tesla has developed a family of drive inverter designs that are customized to its proprietary motor designs to most efficiently meet the demands of each of our vehicles. The primary technological...

  • Page 8
    ... Tesla-employed sales and service staff, creating a differentiated buying experience from the buying experience consumers have with franchised automobile dealers and service centers. We believe we will also be able to better control costs of inventory, manage warranty service and pricing, maintain...

  • Page 9
    ... location. Our company-owned service centers enable our technicians to work closely with our engineers and research and development teams in Silicon Valley to identify problems, find solutions, and incorporate improvements faster than incumbent automobile manufacturers. New Vehicle Limited Warranty...

  • Page 10
    ... and distribute all Tesla products to customers in all markets outside of the United States and provide corporate oversight functions for European sales, service, and administrative functions. Our operations in Tilburg include final assembly, testing and quality control for vehicles delivered within...

  • Page 11
    ... each vehicle sold. We have contracted with another automobile manufacturer to sell all earned credits. Under the National Highway Traffic Safety Administration's (NHTSA) Corporate Average Fuel Economy (CAFE) standards, car and truck manufacturers are required to meet fleet-wide average fuel economy...

  • Page 12
    ...more so in the future as we introduce additional, lower priced vehicles such as our Model 3. We believe the primary competitive factors in our markets include but are not limited to technological innovation; product quality and safety; service options; product performance; design and styling; brand...

  • Page 13
    ... companies making electric vehicles, and the world. Segment Information We operate as one reportable segment which is the design, development, manufacturing and sales of electric vehicles. Employees As of December 31, 2015, we had 13,058 full-time employees. To date, we have not experienced any work...

  • Page 14
    ... growth plans into both existing markets as well as new markets into which we expand. If we are unable to ramp up to meet our delivery goals globally, this could have a material adverse effect on our business, prospects, financial condition and operating results. Finally, detailed long-term testing...

  • Page 15
    ... the market, then our ability to sell each vehicle model at planned quantities or prices may be impacted. Beyond Model X, we have announced our intent to develop Model 3, which we intend to offer at a lower price point and to produce at high volumes. We have not yet finalized the design, engineering...

  • Page 16
    ...our company, especially internationally, we may not be able to produce, market, sell and service our vehicles successfully. Any failure to manage our growth effectively could materially and adversely affect our business, prospects, operating results and financial condition. We continue to expand our...

  • Page 17
    ...financial and business performance, such as projections regarding sales and production, as well as anticipated future revenues, gross margins, profitability and cash flows. Correctly identifying key factors affecting business conditions and predicting future events is inherently an uncertain process...

  • Page 18
    ..., Canada, Germany and the UK, including leasing directly through certain of those subsidiaries. The profitability of the leasing program depends on our ability to accurately project residual values, secure adequate financing and/or business partners to fund and grow this program, and manage customer...

  • Page 19
    ...these companies have longer operating histories and greater name recognition than we do. Increased competition could result in lower vehicle unit sales, price reductions, revenue shortfalls, loss of customers and loss of market share, which could harm our business, prospects, financial condition and...

  • Page 20
    ... produced vehicles. Additionally, as we have expanded into new international markets, we historically faced challenges with ensuring that our charging equipment works successfully with the charging infrastructure in such markets, including in Norway and China. If customers experience problems...

  • Page 21
    ... our business. Our future success depends upon our ability to attract and retain executive officers and other key technology, sales, marketing, engineering, manufacturing and support personnel and any failure to do so could adversely impact our business, prospects, financial condition and operating...

  • Page 22
    ... engineered or manufactured by us or our suppliers, involve significant expense and diversion of management attention and other resources, and could adversely affect our brand image in our target markets, as well as our business, prospects, financial condition and results of operations. Our current...

  • Page 23
    ..., electronic systems, powertrain and brake system. Additionally, i n 2013, as part of our ongoing efforts to improve the customer ownership experience, we expanded the battery pack warranty and also eliminated the annual service requirement that was needed to keep the New Vehicle Limited Warranty in...

  • Page 24
    ... to fund our ongoing operations, continue research and development projects, including those for our planned Model 3 vehicle, establish sales and service centers, build and deploy Superchargers and to make the investments in tooling and manufacturing capital required to introduce new vehicles. If we...

  • Page 25
    ... can be effectively enforced, even if they relate to patents issued in the U.S. In addition, others may obtain patents that we need to take a license to or design around, either of which would increase costs and may adversely affect our business, prospects, financial condition and operating results...

  • Page 26
    ... senior notes issued in registered public offerings. Under certain circumstances relating to the reported trading price of our common stock, the holders of our convertible senior notes may convert their notes at their option, upon which we would be obligated to deliver cash payments and/or shares of...

  • Page 27
    ...future, convertible at the option of their holders prior to their scheduled terms under certain circumstances. Any sales in the public market of the common stock issuable upon such conversion could adversely affect prevailing market prices of our common stock. In addition, the existence of the notes...

  • Page 28
    ...to secure any other loans. These factors may limit Mr. Musk's ability to either pledge additional shares of Tesla common stock or sell shares of Tesla common stock as a means to avoid or satisfy a margin call with respect to his pledged Tesla common stock in the event of a decline in our stock price...

  • Page 29
    ...services, powertrain development services, parts warehousing, final vehicle assembly and vehicle service 430,770 Manufacturing 302,400 Sales, marketing and services center 506,490 Administration, sales and marketing services 71,142 Administration 132,250 Vehicle engineering and design...

  • Page 30
    ... it began trading on June 29, 2010. Our initial public offering was priced at $17.00 per share on June 28, 2010. The following table sets forth, for the time period indicated, the high and low closing sales price of our common stock as reported on The NASDAQ Global Select Market. 2015 2014 First...

  • Page 31
    ... the cumulative total return for our common stock, the NASDAQ Composite Index, and a group of all public companies sharing the same SIC code as us which is SIC code 3711, "Motor Vehicles and Passenger Car Bodies" (Motor Vehicles and Passenger Car Bodies Public Company Group). Such returns are based...

  • Page 32
    ...Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and the related notes included elsewhere in this Annual Report on Form 10-K. Year Ended December 31, 2015 Consolidated Statements of Operations Data Total revenues...

  • Page 33
    ... financial statements and the related notes that appear elsewhere in this Annual Report on Form 10-K. Overview and 2015 Highlights We design, develop, manufacture, and sell high-performance fully electric vehicles, and energy storage products. We are currently producing and selling our Model...

  • Page 34
    ... related expenses to cost of automotive revenues and selling, general, and administrative expenses. These costs were immaterial for all periods presented. Customer Financing Options We offer loans and leases in North America, Europe and Asia primarily through various financial institutions. We offer...

  • Page 35
    ... Gigafactory in June 2014 and began assembling our Tesla Energy products in the first portion of the facility in the fourth quarter of 2015. We currently expect to produce cells at this site beginning in 2016 for use initially in our Tesla Energy products and later for our vehicles. Over the next...

  • Page 36
    ... offer a vehicle leasing program in certain locations in the United States, Canada and Germany. Qualifying customers are permitted to lease a vehicle directly from Tesla for 36 or 48 months. At the end of the lease term, customers have the option of either returning the vehicle to us or purchasing...

  • Page 37
    ... units (RSUs) granted to employees and our Employee Stock Purchase Plan (ESPP) to measure the cost of employee services received in exchange for the stock-based awards. The fair value of stock options and ESPP are estimated on the grant date and offering date using the Black-Scholes option-pricing...

  • Page 38
    ...$14.5 million for the years ended December 31, 2015, 2014 and 2013. Additionally, no cash compensation has ever been received by our CEO for his services to the Company. Income Taxes We are subject to federal and state taxes in the United States in many foreign jurisdictions. Significant judgment is...

  • Page 39
    ...maintenance services, allocations of service center overhead costs, pre-owned Tesla vehicle sales, sales of our powertrain components, and costs related to the production and sale of Tesla Energy products. For the years ended December 31, 2015, 2014, and 2013 costs of services and other revenue were...

  • Page 40
    ...-hand drive Model S development. Selling, General and Administrative Expenses Selling, general and administrative (SG&A) expenses consist primarily of personnel and facilities costs related to our Tesla retail and service stores, marketing, sales, executive, finance, human resources, information...

  • Page 41
    ... a secured asset based line of credit we used to support our direct leasing program. When market conditions are favorable, we may evaluate alternatives to pursue liquidity options to fund capital intensive initiatives. Should prevailing economic, financial, business or other factors adversely...

  • Page 42
    ... from the provision of development services, and sales of powertrain components and systems. These cash inflows are offset by payments we make to our suppliers for production materials and parts used in our manufacturing process, employee compensation, operating leases and interest expense on our...

  • Page 43
    ... Data, Note 8 Convertible Notes and Long-Term Debt Obligations . Common Stock Offering and Concurrent Private Placement Concurrent with the execution of the 2018 Notes and related transactions in May 2013, we also completed a public offering of common stock and sold a total of 3,902,862 shares of...

  • Page 44
    ..., holders of 2018 Notes may convert their notes during the first quarter of 2016. As such, we classified the $617.7 million carrying value of our 2018 Notes as current liabilities on our condensed consolidated balance sheet as of December 31, 2015 and have included related contractual payments in...

  • Page 45
    ...is sold or over the depreciation period for those sales accounted for as leases. Although our contracts are cons idered effective hedges, we may experience small amounts of ineffectiveness due to timing differences between our actual inventory purchases and the settlement date of the related foreign...

  • Page 46
    ... Report of Independent Registered Public Accounting Firm Consolidated Balance Sheets Consolidated Statements of Operations Consolidated Statements of Comprehensive Loss Consolidated Statements of Stockholders' Equity Consolidated Statements of Cash Flows Notes to Consolidated Financial Statements...

  • Page 47
    ... consolidated balance sheets and the related consolidated statements of operations, of comprehensive loss, of stockholders' equity and of cash flows present fairly, in all material respects, the financial position of Tesla Motors, Inc. and its subsidiaries at December 31, 2015 and December 31, 2014...

  • Page 48
    Tesla Motors, Inc. Consolidated Balance Sheets (in thousands December 31, 2015 December 31, 2014 Assets Current assets Cash and cash equivalents Restricted cash and marketable securities Accounts receivable Inventory Prepaid expenses and other current assets Total current assets Operating lease...

  • Page 49
    ...Statements of Operations (in thousands, except per share data) Year Ended December 31, 2014 Revenues Automotive Services and other Total revenues Cost of revenues Automotive Services and other Total cost of revenues Gross profit Operating expenses Research and development Selling, general...

  • Page 50
    Tesla Motors, Inc. Consolidated Statements of Comprehensive Loss (in thousands) Year Ended December 31, 2014 Net loss $ (888,663) $ Other comprehensive income (loss), net of tax Unrealized gain (loss) on derivatives and short-term marketable securities 7,465 Foreign currency...

  • Page 51
    Tesla Motors, Inc. Consolidated Statements of Stockholders' Equity (in thousands, except per share data) Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Loss Total Stockholders' Equity Balance as of December 31, 2012 Issuance of common stock in May 2013 public offering ...

  • Page 52
    ... lease vehicles Prepaid expenses and other current assets Other assets Accounts payable and accrued liabilities Deferred revenue Customer deposits Resale value guarantee Other long-term liabilities Net cash provided by (used in) operating activities Cash Flows From Investing Activities Purchases...

  • Page 53
    ...Notes to Consolidated Financial Statements Note 1 - Overview of the Company Tesla Motors, Inc. (Tesla, we, us or our) was incorporated in the state of Delaware on July 1, 2003. We design, develop, manufacture, and sell highperformance fully electric vehicles, and stationary energy storage products...

  • Page 54
    ... revenue for estimated future product returns. Such estimates are based on historical experience and are immaterial in all periods presented. Vehicle sales to customers with a residual value guarantee We offer resale value guarantees or similar buy-back terms to all customers who purchase vehicles...

  • Page 55
    ... to lease a vehicle directly from a local Tesla subsidiary for 36 or 48 months. At the end of the lease term, customers have the option of either returning the vehicle to us or purchasing it for a pre-determined residual value. We account for these leasing transactions as operating leases and...

  • Page 56
    ... initial New Vehicle Limited Warranty, provided they are purchased within a specified period of time. Payments collected in advance of the performance of service are initially recorded in deferred revenues on the consolidated balance sheets and recognized in automotive sales ratably over the service...

  • Page 57
    ..., 2015 and 2014, our accounts receivable were derived primarily from sales of regulatory credits, as well as funds to be received from financial institutions and leasing companies offering various financing products to our customers, the development and sales of powertrain components and systems to...

  • Page 58
    ... fair value. We did not record any material impairment losses on our long-lived assets in 2015 and 2014. Research and Development Costs Research and development costs are expensed as incurred. Research and development expenses consist primarily of payroll, benefits and stock-based compensation...

  • Page 59
    ... compensation expense for costs related to all share-based payments, including stock options, restricted stock units (RSUs) and our employee stock purchase plan (the ESPP). The fair value of stock options and the ESPP are estimated on the grant date and offering date using an option pricing model...

  • Page 60
    ... 31, 2015, and December 31, 2014 warranty costs incurred for vehicles accounted for as operating leases or collateralized debt arrangements were $9.5 million and $7.1 million. Warranty expense is recorded as a component of cost of automotive revenue. Net Loss per Share of Common Stock Our basic...

  • Page 61
    ...are valued using quoted market prices or market prices for similar securities. O ur restricted short-term marketable securities are classified within Level I of the fair value hierarchy . As of December 31, 2015 and 2014, the fair value hierarchy for our financial assets and financial liabilities...

  • Page 62
    ... financial obligation from the balance sheet and treat the building lease as an operating lease. If upon completion of construction, the project does not meet the "sale-leaseback" criteria, the leased property will be treated as a capital lease and included in building and building improvements...

  • Page 63
    ... from customers at the time they place an order for a vehicle and additional payments up to the point of delivery including the fair value of customer trade-in vehicles that are applicable toward a new vehicle purchase. Customer deposit amounts and timing vary depending on the vehicle model and...

  • Page 64
    ...on the consolidated balance sheet as of December 31, 2015. 1.50% Convertible Senior Notes and Bond Hedge and Warrant Transactions In May 2013, we issued $660.0 million aggregate principal amount of 2018 Notes in a public offering. The net proceeds from the offering, after deducting transaction costs...

  • Page 65
    ... equity on our consolidated balance sheet as of December 31, 2015. Similarly, debt issuance costs were classified as other current assets as of December 31, 2015. Should the closing price conditions be met in the first quarter of 2016 or a future quarter, 2018 Notes will be convertible at their...

  • Page 66
    ... million, net of underwriting discounts and offering costs (see Note 8 - Convertible Notes and Long-Term Debt Obligations ). In August 2015, we completed a public offering of common stock and sold a total of 3,099,173 shares of our common stock for total cash proceeds of approximately $738.3 million...

  • Page 67
    ... Weighted Average Grant Number Date Fair of RSUs Value Balance, December 31, 2012 Additional options reserved Granted Exercised Cancelled Released Balance, December 31, 2013 Additional options reserved Granted Exercised Cancelled Released Traded for taxes Balance, December 31, 2014 469,531...

  • Page 68
    ... fair value of each option award and the ESPP on the grant date generally using the Black-Scholes option pricing model and the weighted average assumptions noted in the following table. Year Ended December 31, Risk-free interest rate: Stock options ESPP Expected term (in years): Stock options...

  • Page 69
    ... 31, 2015, 2014 and 2013 was $58.77, $74.07 and $19.22 per share. The fair value of RSUs is measured on the grant date based on the closing fair market value of our common stock. Performance-Based Stock Options In 2014, to create incentives for continued long term success beyond the Model S program...

  • Page 70
    ..., subject to any plan limitations. The purchase price of the shares on each purchase date is equal to 85% of the lower of the fair market value of our common stock on the first and last trading days of each six-month offering period. During the years ended December 31, 2015, 2014 and 2013, 220,571...

  • Page 71
    ...2015 December 31, 2014 Deferred tax assets: Net operating loss carry-forwards Research and development credits Other tax credits Deferred revenue Inventory and warranty reserves Depreciation and amortization Stock-based compensation Convertible debt Accruals and others Total deferred tax assets...

  • Page 72
    ...portion of net operating loss carryforwards related to stock options is approximately $867.2 million and $379.8 million for federal and state purposes, respectively, of which the tax benefits will be credited to additional paidin capital when realized. We have research and development tax credits of...

  • Page 73
    ...In addition, any potential tax benefits would increase a deferred tax asset which is currently offset with a full valuation allowance. Note 12 - Information about Geographic Areas We operate as one reportable segment which is the design, development, manufacturing and sales of electric vehicles...

  • Page 74
    ...): 2016 2017 2018 2019 2020 and thereafter Total minimum lease payments Less: Amounts representing interest not yet incurred Present value of capital lease obligations Less: Current portion Long-term portion of capital lease obligations Operating Leases Capital Leases 88...

  • Page 75
    ... of our assets that could have a material effect on the financial statements. Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial...

  • Page 76
    ...require submission of the schedule, or because the information required is included in the consolidated financial statements and notes thereto. Exhibits. The exhibits listed in the accompanying "Index to Exhibits" are filed or incorporated by reference as part of this Annual Report on Form 10-K. 75

  • Page 77
    ... to Fifth Amended and Restated Investors' S-1/A Rights Agreement between Registrant, Toyota Motor Corporation and certain holders of the Registrant's capital stock named therein Amendment to Fifth Amended and Restated Investor's S-1/A Rights Agreement, dated as of June 14, 2010, between...

  • Page 78
    ... of the capital stock of the Registrant named therein. Waiver to Fifth Amended and Restated Investor's Rights Agreement, dated as of August 13, 2015, between the Registrant and certain holders of the capital stock of the Registrant named therein. Form Incorporated by...

  • Page 79
    ... Stock Unit Award Agreement under 2010 Equity Incentive Plan Amended and Restated 2010 Employee Stock Purchase Plan, effective as of August 3, 2011. Offer Letter between the Registrant and Elon Musk dated October 13, 2008 Form S-1/A 333 164593 Incorporated...

  • Page 80
    ... 7, 2014 10.25 †General Terms and Conditions between Panasonic 10-Q Corporation and the Registrant dated October 1, 2014. Letter Agreement, dated as of February 24, 2015, regarding addition of co-party to General Terms and Conditions, Production Pricing Agreement and Investment Letter...

  • Page 81
    ... 1, 2014. ABL Credit Agreement, dated as of June 10, 2015, by 8-K and among the Registrant, Tesla Motors Netherlands B.V., certain of the Registrant's and Tesla Motors Netherlands B.V.'s direct or indirect subsidiaries from time to time party thereto, as borrowers, Wells Fargo Bank, National...

  • Page 82
    ... to Fixed Charges Agreement for Tax Abatement and Incentives, dated 10-Q as of May 7, 2015, by and between Tesla Motors, Inc. and the State of Nevada, acting by and through the Nevada Governor's Office of Economic Development Form Incorporated by Reference File No...

  • Page 83
    .... Tesla Motors, Inc. Date: February 24, 2016 /s/ Elon Musk Elon Musk Chief Executive Officer (Principal Executive Officer) Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on...

  • Page 84
    ... " Applicable Laws " means the requirements relating to the administration of equity-based awards under U.S. state corporate laws, U.S. federal and state securities laws, the Code, any stock exchange or quotation system on which the Common Stock is listed or quoted and the applicable laws of...

  • Page 85
    ... of this definition, persons will be considered to be acting as a group if they are owners of a corporation that enters into a merger, consolidation, purchase or acquisition of stock, or similar business transaction with the Company. (e) " Code " means the Internal Revenue Code of 1986, as...

  • Page 86
    ... Global Market or the Nasdaq Capital Market of The Nasdaq Stock Market, its Fair Market Value will be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange or system on the date of determination, as reported in The Wall Street Journal or...

  • Page 87
    ... as Exhibit A) to the Company's designated plan administrator (i) no earlier than the effective date of the Form S-8 registration statement with respect to the issuance of Common Stock under this Plan and (ii) no later than ten (10) business days following the effective date of such S-8 registration...

  • Page 88
    ... Plan in accordance with the requirements of Section 5(b). The Administrator may, for future Offering Periods, increase or decrease, in its absolute discretion, the maximum number of shares of Common Stock that an Eligible Employee may purchase during each Offering Period. Exercise of the option...

  • Page 89
    ...ii) the number of shares of Common Stock available for sale under the Plan on such Exercise Date, the Administrator may in its sole discretion provide that the Company will make a pro rata allocation of the shares of Common Stock available for purchase on such Offering Date or...

  • Page 90
    ...to adjustment upon changes in capitalization of the Company as provided in Section 19 hereof, the maximum number of shares of Common Stock which will be made available for sale under the Plan will be 1,666,666 shares, plus an annual increase to be added on the first day of each Fiscal Year beginning...

  • Page 91
    ...reason. If the Plan is terminated, the Administrator, in its discretion, may elect to terminate all outstanding Offering Periods either immediately or upon completion of the purchase of shares of Common Stock on the next Exercise Date (which may be sooner than originally scheduled, if determined by...

  • Page 92
    .... As a condition to the exercise of an option, the Company may require the person exercising such option to represent and warrant at the time of any such exercise that the shares are being purchased only for investment and without any present intention to sell or distribute such shares if, in...

  • Page 93
    ... the stockholders of the Company. It will continue in effect for a term of ten (10) years, unless sooner terminated under Section 20. 24. Stockholder Approval . The Plan will be subject to approval by the stockholders of the Company within twelve (12) months after the date the Plan is adopted by...

  • Page 94
    ... fair market value of the shares on the first trading day of the Offering Period. The remainder of the gain, if any, recognized on such disposition will be taxed as capital gain. 5. I hereby agree to be bound by the terms of the Plan, including (but not limited to) the power of the Administrator...

  • Page 95
    ...undersigned Participant in the Offering Period of the Tesla Motors, Inc. 2010 Employee Stock Purchase Plan that began on the " Offering Date ") hereby notifies the Company that he or she hereby withdraws from the Offering Period. He or she hereby directs the Company to pay to the...

  • Page 96
    ...Financial Officer (CFO) on the terms set forth below. As CFO, you will perform the duties customarily associated with this position. You will report to Elon Musk, Chief Executive Officer. Your duties, responsibilities, job title, and work location may be changed at any time by Tesla. Your annualized...

  • Page 97
    ...information which is common knowledge in the industry or is otherwise legally available in the public domain. Moreover, you agree that, during the term of your employment with the Company, you will not engage in any other employment, occupation, consulting or other business activity directly related...

  • Page 98
    ..., or have access to (A) technical, business, or customer information, materials, or data relating to the Company's present or planned business that has not been released to the public with the Company's authorization, including, but not limited to, confidential information, materials, or proprietary...

  • Page 99
    ... signed by an officer of Tesla. This letter agreement shall be construed and interpreted in accordance with the laws of the State of California. As required by immigration law, this offer of employment is conditioned upon satisfactory proof of your right to work in the United States. This offer...

  • Page 100
    ... 24, 2015 Director, Battery Technology Tesla Motors, Inc. 3500 Deer Creek Road Palo Alto, CA 94304 To: Cc: Legal Department RE: Notification of adding Panasonic Energy Corporation of North America as a Co-Party to General Terms and Conditions, Production Pricing Agreement and Investment Letter...

  • Page 101
    ... order: " New B.V. " means Tesla International B.V., a company organized under the laws of the Netherlands and that is (or will be when formed) a WhollyOwned Subsidiary of Tesla Motors Netherlands Coöperatief U.A. " Tax Sharing Agreement " means a tax sharing agreement, entered into among New...

  • Page 102
    ...(b) so long as the Tax Sharing Agreement remains in full force and effect, a fiscal unity among the Dutch Credit Parties and other Dutch Affiliates of Tesla B.V. from time to time party to such Tax Sharing Agreement, Tesla Motors Netherlands Coöperatief U.A. and the New B.V. Section 3 . Tax Sharing...

  • Page 103
    ... terms, conditions, obligations, covenants or agreements contained in the Credit Agreement or any other Credit Document in similar or different circumstances. Section 8. Counterparts. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect...

  • Page 104
    ... executed as of the date first above written. TESLA MOTORS, INC. By: TESLA MOTORS NETHERLANDS B.V. By: /s/ Jason Wheeler Name: Jason Wheeler Title: Chief Financial Officer /s/ Todd Maron Name: Todd Maron Title: Managing Director [Second Amendment to Credit...

  • Page 105
    DEUTSCHE BANK AG NEW YORK BRANCH , as Administrative Agent, Collateral Agent and a Lender By: By: /s/ Michael Shannon Name: Michael Shannon Title: Vice President /s/ Ming K. Chu Name: Ming K. Chu Title: Vice President [Second Amendment to Credit Agreement - ...

  • Page 106
    Bank of America, N.A., as an Issuing Lender and a Lender By: /s/ Robert M. Dalton Name: Robert M. Dalton Title: Senior Vice President [Second Amendment to Credit Agreement - Signature Page]

  • Page 107
    JPMorgan Chase Bank, N.A., as an Issuing Lender and a Lender By: /s/ Jeannette Behm Name: Jeannette Behm Title: Authorized Officer [Second Amendment to Credit Agreement - Signature Page]

  • Page 108
    Morgan Stanley Senior Funding, Inc., as a Lender By: /s/ Emanuel Ma Name: Emanuel Ma Title: Vice President [Second Amendment to Credit Agreement - Signature Page]

  • Page 109
    WELLS FARGO BANK, N.A., as a Lender By: /s/ Krista Mize Name: Krista Mize Title: Authorized Signatory [Second Amendment to Credit Agreement - Signature Page]

  • Page 110
    CITIBANK, N.A., as a Lender By: /s/ K. Kelly Gunness Name: K. Kelly Gunness Title: Vice President and Director [Second Amendment to Credit Agreement - Signature Page]

  • Page 111
    ... SUISSE AG, CAYMAN ISLANDS BRANCH, as a Lender By: By: /s/ Mikhail Faybusovich Name: Mikhail Faybusovich Title: Authorized Signatory /s/ Karim Rahimtoola Name: Karim Rahimtoola Title: Authorized Signatory [Second Amendment to Credit Agreement - Signature Page]

  • Page 112
    GOLDMAN SACHS BANK USA, as a Lender By: /s/ Jerry Li Name: Jerry Li Title: Authorized Signatory [Second Amendment to Credit Agreement - Signature Page]

  • Page 113
    ...1.1 of the Credit Agreement . 2.1.1 The following defined term shall be inserted into Section 1.1 of the Credit Agreement in appropriate alphabetical order: " Third Amendment Effective Date " shall mean February 9, 2016. 2.1.2 The definition of "Total Revolving Loan Commitment" in Section 1.1 of the...

  • Page 114
    ...-of-pocket costs and expenses (including, to the extent invoiced in advance, reasonable legal fees and out-of-pocket expenses of counsel) and other compensation due and payable to the Administrative Agent and the Lenders on or prior to the Amendment Effective Date shall have been paid. (c) Each of...

  • Page 115
    (h) The Administrative Agent shall have received a certificate from each Credit Party, dated the Amendment Effective Date, signed by an Authorized Officer of such Credit Party (or, with respect to Tesla B.V., its directors), and, if signed by an Authorized Officer of such Credit Party, attested to ...

  • Page 116
    ... may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. Delivery of an executed signature page of this Amendment by facsimile transmission or electronic transmission (e.g., "pdf...

  • Page 117
    ... be duly executed as of the date first above written. TESLA MOTORS, INC. By: TESLA MOTORS NETHERLANDS B.V. By: /s/ Jason Wheeler Name: Jason Wheeler Title: Chief Financial Officer /s/ Todd Maron Name: Todd Maron Title: Managing Director [Third Amendment to Credit...

  • Page 118
    DEUTSCHE BANK AG NEW YORK BRANCH , as Administrative Agent, Collateral Agent and a Lender By: By: /s/ Peter Cucchiara Name: Peter Cucchiara Title: Vice President /s/ Marcus M. Tarkington Name: Marcus M. Tarkington Title: Director [Third Amendment to Credit Agreement - ...

  • Page 119
    GOLDMAN SACHS BANK USA, as a Lender By: /s/ Rebecca Kratz Name: Rebecca Kratz Title: Authorized Signatory [Third Amendment to Credit Agreement - Signature Page]

  • Page 120
    CITIBANK, N.A., as a Lender By: /s/ K. Kelly Gunness Name: K. Kelly Gunness Title: Vice President and Director [Third Amendment to Credit Agreement - Signature Page]

  • Page 121
    JPMorgan Chase Bank, N.A., as an Issuing Lender and a Lender By: /s/ Annaliese Fisher Name: Annaliese Fisher Title: Authorized Officer [Third Amendment to Credit Agreement - Signature Page]

  • Page 122
    Morgan Stanley Senior Funding, Inc., as a Lender By: /s/ Michael King Name: Michael King Title: Vice President [Third Amendment to Credit Agreement - Signature Page]

  • Page 123
    Bank of America, N.A., as an Issuing Lender and a Lender By: /s/ Robert M. Dalton Name: Robert M. Dalton Title: Senior Vice President [Third Amendment to Credit Agreement - Signature Page]

  • Page 124
    WELLS FARGO BANK, N.A., as an Issuing Lender and a Lender By: /s/ Krista Mize Name: Krista Mize Title: Authorized Signatory [Third Amendment to Credit Agreement - Signature Page]

  • Page 125
    ... Revolving Loan Commitment Lender DEUTSCHE BANK AG NEW YORK BRANCH GOLDMAN SACHS BANK USA CITIBANK, N.A. JPMORGAN CHASE BANK, N.A. MORGAN STANLEY SENIOR FUNDING, INC. BANK OF AMERICA, N.A. WELLS FARGO BANK, NATIONAL ASSOCIATION CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH TOTAL $147,500,000 $175...

  • Page 126
    ... periods indicated is as follows. Year Ended December 31, 2015 2014 2013 2012 2011 Ratio of earnings to fixed charges (1 1) For the purpose of calculating such ratios, "earnings" consist of income from continuing operations before income taxes plus fixed charges and "fixed charges" consist of...

  • Page 127
    ...Automobiles Sales and Service Mexico, S. de R.L. de C.V. Tesla Energia Macau Limitada Tesla Finance LLC Tesla Financial Services GmbH Tesla Financial Services Holdings B.V. Tesla Financial Services Limited Tesla International B.V. Tesla Lease Trust Tesla LLC Tesla Jordan Car Trading LLC Tesla Motors...

  • Page 128
    ... Tesla Motors Singapore Private Limited Tesla Motors Singapore Holdings Pte. Ltd. Tesla Motors Stichting Tesla Motors Switzerland GmbH Tesla Motors TN, Inc. Tesla Motors TX, Inc. Tesla Motors UT, Inc. TM International C.V. TM Sweden AB Massachusetts Netherlands New York Delaware Norway Nevada...

  • Page 129
    ... the incorporation by reference in the Registration Statements on Form S-3 (No. 333-188625) and S-8 (Nos. 333-198002, 333187113, 333-183033, and 333-167874) of Tesla Motors, Inc. of our report dated February 24, 2016 relating to the financial statements and the effectiveness of internal control over...

  • Page 130
    ... weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and Any fraud, whether or not material, that involves management or other...

  • Page 131
    ... weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and Any fraud, whether or not material, that involves management or other...

  • Page 132
    ... 13(a) or 15(d) of the Securities Exchange Act of 1934 and (ii) that the information contained in such Form 10-K fairly presents, in all material respects, the financial condition and results of operations of Tesla Motors, Inc. Date: February 24, 2016 /s/ Elon Musk Elon Musk Chief...