Tesla 2016 Annual Report Download - page 89

8.ExerciseofOption.
(a)UnlessaParticipantwithdrawsfromthePlanasprovidedinSection10,hisorheroptionforthepurchaseofsharesofCommonStock
willbeexercisedautomaticallyontheExerciseDate,andthemaximumnumberoffullsharessubjecttotheoptionwillbepurchasedforsuchParticipantatthe
applicablePurchasePricewiththeaccumulatedpayrolldeductionsinhisorheraccount.NofractionalsharesofCommonStockwillbepurchased;anypayroll
deductionsaccumulatedinaParticipant’saccount,whicharenotsufficienttopurchaseafullsharewillbereturnedtotheParticipant.Anyotherfundsleftoverin
a Participant’s account after the Exercise Date will be returned to the Participant.  During a Participant’s lifetime, a Participant’s option to purchase shares
hereunderisexercisableonlybyhimorher.
(b)IftheAdministratordeterminesthat,onagivenExerciseDate,thenumberofsharesofCommonStockwithrespecttowhichoptions
are to be exercised may exceed (i) the number of shares of Common Stock that were available for sale under the Plan on the Offering Date of the applicable
OfferingPeriod,or(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 Exercise Date, as
applicable,inasuniformamanneraswillbepracticableandasitwilldetermineinitssolediscretiontobeequitableamongallParticipantsexercisingoptionsto
purchaseCommonStockonsuchExerciseDate,andcontinueallOfferingPeriodsthenineffectorterminateallOfferingPeriodsthenineffectpursuanttoSection
20.  The Company may make a pro rata allocation of the shares available on the Offering Date of any applicable Offering Period pursuant to the preceding
sentence,notwithstandinganyauthorizationofadditionalsharesforissuanceunderthePlanbytheCompany’sstockholderssubsequenttosuchOfferingDate.
9.Delivery.AssoonasreasonablypracticableaftereachExerciseDateonwhichapurchaseofsharesofCommonStockoccurs,theCompanywill
arrangethedeliverytoeachParticipantofthesharespurchaseduponexerciseofhisorheroptioninaformdeterminedbytheAdministrator(initssolediscretion)
andpursuant torules established bythe Administrator. TheCompany may permitor requirethat sharesbe deposited directly with abroker designatedby the
CompanyortoadesignatedagentoftheCompany,andtheCompanymayutilizeelectronicorautomatedmethodsofsharetransfer.TheCompanymayrequire
that shares be retained with such broker or agent for a designated period of time and/or may establish other procedures to permit tracking of disqualifying
dispositionsof such shares.No Participant willhave anyvoting,dividend, or otherstockholder rightswithrespect tosharesof CommonStocksubject to any
optiongrantedunderthePlanuntilsuchshareshavebeenpurchasedanddeliveredtotheParticipantasprovidedinthisSection9.
10.Withdrawal.
(a)AParticipantmaywithdrawallbutnotlessthanallthepayrolldeductionscreditedtohisorheraccountandnotyetusedtoexercise
hisorheroptionunderthePlanatanytimeby(i)submittingtotheCompany’spayrolloffice(oritsdesignee)awrittennoticeofwithdrawalintheformprescribed
by the Administrator for such purpose (which may be similar to the form attached hereto as Exhibit B), or (ii) following an electronic or other withdrawal
procedureprescribedbytheAdministrator.AlloftheParticipant’spayrolldeductionscreditedtohisorheraccountwillbepaidtosuchParticipantpromptlyafter
receiptofnoticeofwithdrawalandsuchParticipant’soptionfortheOffering Periodwillbeautomaticallyterminated,andnofurtherpayrolldeductionsforthe
purchaseofshareswillbemadeforsuchOfferingPeriod.IfaParticipantwithdrawsfromanOfferingPeriod,payrolldeductionswillnotresumeatthebeginning
ofthesucceedingOfferingPeriod,unlesstheParticipantre-enrollsinthePlaninaccordancewiththeprovisionsofSection5.
(b)AParticipant’swithdrawalfromanOfferingPeriodwillnothaveanyeffectuponhisorhereligibilitytoparticipateinanysimilarplan
whichmayhereafterbeadoptedbytheCompanyorinsucceedingOfferingPeriods,whichcommenceaftertheterminationoftheOfferingPeriodfromwhichthe
Participantwithdraws.
11.TerminationofEmployment.UponaParticipant’sceasingtobeanEligibleEmployee,foranyreason,heorshewillbedeemedtohaveelected
to withdraw from the Plan and the payroll deductions credited to such Participant’s account during the Offering Period but not yet used to purchase shares of
CommonStockunderthe