Tesla (TSLA) 10-K/A risk factor changes: FY2020 vs FY2019

For the fiscal year ended December 31, [removed: 2019][added: 2020]

The aggregate market value of voting stock held by non-affiliates of the registrant, as of June 30, [removed: 2019,] [added: 2020,] the last day of the registrant’s most recently completed second fiscal quarter, was [removed: $31.54] [added: $160.57] billion (based on the closing price for shares of the registrant’s Common Stock as reported by the NASDAQ Global Select Market on June 30, [removed: 2019).][added: 2020).]

As of February [removed: 7, 2020,] [added: 1, 2021,] there were [removed: 181,341,586] [added: 959,853,504] shares of the registrant’s Common Stock outstanding.

On February [removed: 13, 2020,] [added: 8, 2021,] Tesla, Inc. (“Tesla,” the “Company,” “we,” “us,” or “our”) filed our Annual Report on Form 10-K for the fiscal year ended December 31, [removed: 2019] [added: 2020] (the “Original Form 10-K”).

We currently expect that our definitive proxy statement for the [removed: 2020] [added: 2021] annual meeting of stockholders will be filed [removed: in May 2020, which is] later than the 120th day after the end of the last fiscal year.

| | • | file new certifications of our principal executive [removed: officers] [added: officer] and principal financial officer as exhibits to this Amendment under Item 15 of Part IV hereof, pursuant to Rule 12b-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). |

[removed: TESLA, INC.][added: TESLA, INC.]

FOR THE YEAR ENDED DECEMBER 31, [removed: 2019][added: 2020]

| [EXPLANATORY [removed: NOTE.](#PART_I)] [added: NOTE.](#EXPLANATORY_NOTE)] | | | | |

| Item 12. | | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](#Item_12) | | [removed: 25] [added: 24] |

| Item 13. | | [Certain Relationships and Related [removed: Transactions,] [added: Transactions] and Director Independence](#Item_13) | | [removed: 28] [added: 26] |

| Item 14. | | [Principal Accountant Fees and Services](#Item_14) | | [removed: 30] [added: 29] |

The names of the members of Tesla’s Board of Directors (the “Board”), their respective ages, their positions with Tesla and other biographical information as of April [removed: 23, 2020] [added: 29, 2021] are set forth below.

Elon [removed: Musk, our Chief Executive Officer and a director,] [added: Musk] and Kimbal Musk, [removed: a director,] who are brothers, there are no other family relationships among any of our directors or executive officers.

| Elon Musk | | [removed: 48] [added: 49] | | | | | | | | | | |

| Robyn Denholm | | [removed: 56] [added: 57] | | X | | X | | X | | X | | X |

| Ira Ehrenpreis | | [removed: 51] [added: 52] | | | | | | X | | X | | |

| Lawrence J. Ellison | | [removed: 75] [added: 76] | | | | | | | | | | |

| Antonio Gracias(1) | | [removed: 49] [added: 50] | | | | X | | | | | | |

| Stephen [removed: Jurvetson(2)] [added: Jurvetson(6)] | | [removed: 53] | [added: 20,027] | | | [removed: X] | [added: —] | | | | [added: —] | [removed: X] | [added: | | | | 20,027 | |]

| Hiromichi Mizuno | | [removed: 54] [added: 55] | | | | X | | | | | | |

| James Murdoch | | [removed: 47] [added: 48] | | | | X | | | | X | | X |

| Kimbal Musk | | [removed: 47] [added: 48] | | | | | | | | | | |

| Kathleen Wilson-Thompson | | [removed: 52] [added: 53] | | | | | | X | | X | | X |

Elon Musk [added: is the Technoking of Tesla and] has served as our Chief Executive Officer since October 2008 and as a member of the Board since April 2004.

From [removed: October 2018 to] [added: January 2017 through] June 2019, Ms. Denholm was [removed: Chief Financial Officer and Head of Strategy of] [added: with] Telstra Corporation Limited, a telecommunications [removed: company,] [added: company (“Telstra”),] where she [removed: also] served as [removed: its] Chief [added: Financial Officer and Head of Strategy from October 2018 through June 2019, and Chief] Operations Officer from January 2017 to October 2018.

[removed: served at Toyota Motor Corporation Australia for seven years and at] Arthur Andersen & Company for five years in various finance assignments.

Ms. Denholm previously served as a director of ABB Ltd. from 2016 to [removed: 2017 and of Echelon Corporation Inc. from 2008 to 2013.][added: 2017.]

Ms. Denholm is a [removed: member] [added: Fellow] of the [removed: Australian] Institute of [removed: Company Directors and] [added: Chartered Accountants of Australia/New Zealand,] a [removed: Fellow] [added: member] of the [added: Australian] Institute of [removed: Chartered Accountants of Australia,] [added: Company Directors,] and holds a Bachelor’s degree in Economics from the University of [removed: Sydney] [added: Sydney,] and a Master’s degree in Commerce [added: and a Doctor of Business Administration (honoris causa)] from the University of New South Wales.

Mr. Ehrenpreis was [removed: recently] awarded the 2018 NACD Directorship 100 for his influential leadership in the boardroom and corporate governance community.

We believe that Mr. [removed: Jurvetson] [added: Musk] possesses specific attributes that qualify him to serve as a member of the Board, including his [added: business] experience in [removed: the venture capital industry] [added: retail] and [added: consumer markets,] his [removed: years of business] [added: experience on the Board] and [removed: leadership experience.][added: his experience with technology companies.]

[removed: From January 2015] to March 2020, Mr. Mizuno was Executive Managing Director and Chief Investment Officer of Japan’s Government Pension Investment Fund, the largest pension fund in the world.

In addition to being a career-long finance and investment professional, Mr. Mizuno [removed: is] [added: has served as] a [added: board] member of numerous [removed: business and] [added: business,] government [removed: advisory boards,] [added: and other organizations, currently] including the [removed: board] [added: Mission Committee] of [removed: the PRI, an investor initiative to promote responsible investment in partnership with the United Nations,] [added: Danone S.A., a global food products company, and] the World Economic Forum’s Global Future [removed: Council, and the Japanese government’s strategic fund integrated advisory board.][added: Council.]

We believe that Mr. Mizuno possesses specific attributes that qualify him to serve as a member of the Board, including his deep understanding of international economics, financial [removed: markets,] [added: markets] and government policies.

Mr. Murdoch [removed: also serves on the board of News Corporation, and] formerly served on the boards of [removed: 21CF from 2017 to March 2019, of Sky plc] [added: News Corporation] from [removed: 2016] [added: 2013] to [removed: 2018,] [added: 2020,] of [removed: GlaxoSmithKline plc] [added: 21CF] from [removed: 2009] [added: 2007] to [removed: 2012] [added: 2019] and of [removed: Sotheby’s] [added: Sky plc] from [removed: 2010] [added: 2003] to [removed: 2012.][added: 2018.]

We believe that Mr. Murdoch possesses specific attributes that qualify him to serve as a member of the Board, including his lengthy executive and board experience across numerous companies, extensive knowledge of international markets and [removed: strategies,] [added: strategies] and experience with the adoption of new technologies.

Mr. Musk is [removed: a] co-founder [added: and Executive Chairman] of The [removed: Kitchen,] [added: Kitchen Restaurant Group,] a growing family of businesses with the goal of providing all Americans with access to real [removed: food, and has also served as its Chief Executive Officer since its founding] [added: food that was founded] in 2004.

Mr. Musk also co-founded Square Roots, an urban farming incubator program, in [removed: 2016.][added: 2016, and serves as its Chairman.]

Ms. Wilson-Thompson [removed: has] served as Executive Vice President and Global Chief Human Resources Officer of Walgreens Boots Alliance, Inc., a global pharmacy and wellbeing company, [removed: since] [added: from] December [removed: 2014,] [added: 2014 until her retirement in January 2021,] and previously served as Senior Vice President and Chief Human Resources Officer from January 2010 to December 2014.

Ms. Wilson-Thompson [added: will] also [removed: serves] [added: serve] on the board of directors of [added: Wolverine World Wide, Inc. beginning May 2021 and previously served on the board of directors of] Ashland Global Holdings Inc. [added: from 2017 to 2020] and [removed: served] on the board of directors of Vulcan Materials Company from 2009 to 2018.

Indicate by check mark whether the Registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

Mr. Musk has also served on the board of directors of Endeavor Group Holdings, Inc. since April 2021.

Since January 2021, Ms. Denholm has been an operating partner of Blackbird Ventures, a venture capital firm.

Ms. Denholm also served at Toyota Motor Corporation Australia for seven years and at

Since January 2021, Mr. Mizuno has served as the United Nations Special Envoy on Innovative Finance and Sustainable Investments.

From January 2015

Mr. Mizuno is also involved in academia, having been named to leadership or advisory roles at Harvard University, Oxford University, University of Cambridge, Northwestern University and Osaka University.

Based solely upon a review of forms filed with the SEC and the written representations of such persons, Tesla is aware of no late Section 16(a) filings other than one late Form 4 report filed by Kathleen Wilson-Thompson (reporting the exercise of a stock option and the same-day sales of the resulting shares late due to an administrative delay by Tesla) and one late Form 4 report filed by Antonio Gracias in lieu of the obligation to file two Form 4 reports (each reporting open-market purchases of shares by a third-party discretionary investment authority without Mr. Gracias’ knowledge or direction).

In addition, the Board has established a management committee under the Tesla, Inc. 2019 Equity

| | • | Total revenues of $31.54 billion, representing an increase of $6.96 billion compared to the prior year; |

| | • | Net income attributable to common stockholders of $721 million and an operating margin of 6.3%, representing favorable changes of $1.58 billion and 6.6%, respectively, compared to the prior year; |

| | • | Annual vehicle delivery and production records of 499,647 and 509,737 total vehicles; |

| | • | 3.02 gigawatt hours of energy storage and 205 megawatts of solar energy systems deployed; and |

| | • | Ongoing progress in the global growth of our manufacturing capabilities, including the commencement of production of Model Y, expansion of Gigafactory Shanghai and groundbreaking at Gigafactory Berlin and Gigafactory Texas. |

Subject to applicable laws, such reductions were eliminated after approximately 11 weeks.

positions.

| | • | confidential counseling; |

However, in a change in control situation, the achievement of the milestones will be based solely on the market capitalization milestones, with the measurement of Tesla’s market capitalization determined by the product of the total number of outstanding shares of Tesla common

As of April 29, 2021, six operational milestones and 11 market capitalization milestones have been achieved, of which six operational milestones and six market capitalization milestones have also been certified by our Board of Directors.

us, and he does not receive any cash to the extent that he sells only shares sufficient to cover income taxes with respect to his awards (including stock options exercised solely to avoid their expiration in accordance with their terms); and (iii) the then-current market value of our common stock at the times at which Mr. Musk may elect to actually sell his shares.

| 2020 | | — | | | — | | | 46,150 | | — | | 0.00:1 |

| Elon Musk | | 2020 | | — | | — | | — | | — | | — | | — | | — |

| Technoking of Tesla and Chief Executive Officer | | 2019 | | 23,760 | (3) | — | | — | | — | | — | | — | | 23,760 |

| Zachary Kirkhorn | | 2020 | | 269,663 | (5) | — | | — | | 46,261,354 | | — | | 31,099 | (6) | 46,562,116 |

| Jerome Guillen | | 2020 | | 283,269 | (5) | — | | — | | 46,261,354 | | — | | — | | 46,544,623 |

| Andrew Baglino | | 2020 | | 283,269 | (5) | — | | — | | 46,261,354 | | — | | — | | 46,544,623 |

| (5) | Reflects a temporary reduction to base salary in response to global market conditions. |

| (6) | Reflects an amount corresponding to previously-accrued paid time off that was applied toward the purchase of a Tesla vehicle pursuant to a company-wide program. |

As we continue our international expansion, the median annual total compensation of our employees reflects differences in local compensation scales and practices abroad to a greater extent.

| Name | | Grant Date(1) | | | All Other Option Awards: Number of Securities Underlying Options(#) | | Exercise or Base Price of Option Awards ($/Sh) | | Grant Date Fair Value of Stock and Option Awards ($) | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Zachary J. Kirkhorn | | 10/19/2020 | (2) | | 205,459 | | 430.83 | | 46,261,354 | |

| Jerome Guillen | | 10/19/2020 | (2) | | 205,459 | | 430.83 | | 46,261,354 | |

| Andrew Baglino | | 10/19/2020 | (2) | | 205,459 | | 430.83 | | 46,261,354 | |

| Elon Musk | | | 3/21/2018 | (2) | | | 33,773,400 | | | | — | | | | 67,546,810 | | | | 70.01 | | | | 1/19/2028 | | | | — | | | | — | |

| | | | 6/10/2013 | (3) | | | 1,750 | | | | — | | | | — | | | | 20.01 | | | | 6/10/2023 | | | | — | | | | — | |

| | | | 4/8/2013 | (3) | | | 1,750 | | | | — | | | | — | | | | 8.37 | | | | 4/8/2023 | | | | — | | | | — | |

| | | | 8/13/2012 | (4) | | | 22,862,050 | | | | — | | | | 2,637,455 | | | | 6.24 | | | | 8/13/2022 | | | | — | | | | — | |

| Zachary J. Kirkhorn | | | 10/19/2020 | (5) | | | 4,280 | | | | 201,179 | | | | — | | | | 430.83 | | | | 10/19/2030 | | | | — | | | | — | |

| | | | 4/19/2019 | (6) | | | 283,518 | | | | 364,527 | | | | — | | | | 54.66 | | | | 4/19/2029 | | | | — | | | | — | |

| --- | --- |

| (2) | Mr. Jurvetson will not stand for re-election when his current term expires at the 2020 annual meeting of stockholders. |

Ms. Denholm also

Stephen Jurvetson has been a member of the Board since June 2009, and was on a leave of absence from the Board from November 2017 to April 2019.

Mr. Jurvetson is a co-founder of Future Ventures, a venture capital firm, and previously was a Managing Director of Draper Fisher Jurvetson, a venture capital firm, from 1995 to 2017.

Mr. Jurvetson is a director of SpaceX.

Mr. Jurvetson holds B.S. and M.S. degrees in electrical engineering from Stanford University and an M.B.A. from the Stanford Business School.

Mr. Jurvetson will not stand for re-election when his current term expires at Tesla’s 2020 annual meeting of stockholders.

From 2012 to 2015, Mr. Musk was a director of the Anschutz Health and Wellness Center, a facility at the University of Colorado School of Medicine providing research, education and wellness services with the goal of achieving healthier lifestyles.

We believe that Mr. Musk possesses specific attributes that qualify him to serve as a member of the Board, including his business experience in retail and consumer markets, his experience on the Board, and his experience with technology companies.

and June 2013 during which he attended business school, including most recently as Vice President, Finance, Financial Planning and Business Operations from December 2018 to March 2019.

Based solely upon a review of forms filed with the SEC and the written representations of such persons, Tesla is aware of no late Section 16(a) filings other than a late Form 4 filed by each of Lawrence J.

Ellison and Kathleen Wilson-Thompson reporting an automatic stock option grant in June 2019 for their Board service, due to an administrative delay by Tesla.

capacity until March 2019, and (iv) the two most highly compensated persons, other than our principal executive officer and principal financial officer, who were serving as executive officers at the end of our fiscal year ended December 31, 2019 (our “named executive officers”).

| Deepak Ahuja | | Former Chief Financial Officer |

Mr. Ahuja transitioned from his previous role as Chief Financial Officer effective March 2019.

No such consultants were engaged by the Compensation Committee or Tesla specifically with respect to executive or director compensation during 2019.

| | • | Total revenues of $24.6 billion, a year-over-year increase of approximately 15%; |

| | • | Annual vehicle delivery and production records of 367,656 and 365,232 total vehicles, representing year-over-year increases of approximately 50% and 43%, respectively; |

| | • | 1.65 gigawatt hours of energy storage deployed in 2019, more than the aggregate of all prior years combined; |

| | • | The beginning of the next phase of our global growth with the commencement of Model 3 production at Gigafactory Shanghai in China, less than 10 months from breaking ground, and the selection of a site for a Gigafactory in Berlin, Germany; and |

| | • | The unveiling of Model Y and Cybertruck, the former of which we have recently commenced deliveries in the first quarter of 2020, and the launch of the third generation of Solar Roof. |

| Deepak Ahuja | | — | (3) |

| (3) | Mr. Ahuja transitioned from his role as Chief Financial Officer effective March 2019. |

For example, during 2019 we granted a promotion award to Zachary Kirkhorn in connection with his promotion to Chief Financial Officer, and equity awards to certain of our named executive officers pursuant to our executive compensation review and alignment process.

For example, in order to meet all 12 market capitalization milestones, Tesla will have to add approximately $600 billion to its market

As of the date of this filing, two operational milestones—relating to (i) $20.0 billion total revenue and (ii) $1.5 billion Adjusted EBITDA—have been achieved, subject to formal certification by the Board, and no market capitalization milestone has been achieved.

Consequently, no shares subject to the 2018 CEO Performance Award have vested as of the date of this filing.

However, if the value of Tesla’s closing stock price continues near the levels seen in late April 2020, the first market capitalization milestone of $100 billion is expected to be met during the second quarter of 2020.

| 2017 | | 49,920 | | | — | | | 54,816 | | 49,920 | | 0.91:1 |

| | | 2017 | | 49,920 | | — | | — | | — | | — | | — | | 49,920 |

| Chief Financial Officer | | | | | | | | | | | | | | | | |

| SVP, Powertrain and Energy Engineering | | | | | | | | | | | | | | | | |

| Deepak Ahuja(5) | | 2019 | | 176,870 | | — | | — | | — | | — | | — | | 176,870 |

| Former Chief Financial | | 2018 | | 501,923 | | — | | — | | 5,708,430 | | — | | — | | 6,210,353 |

| Officer | | 2017 | | 428,846 | | — | | 10,501,859 | | 4,567,304 | | — | | — | | 15,498,009 |

| (5) | Mr. Ahuja transitioned from his role as Chief Financial Officer effective March 2019. |

| | | | | | | | | | | | | | | | | All Other Stock | | | All Other Option | | | Exercise or | | | | | | |

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| | | | | | | | | | | | | | | | | Awards: | | | Awards: | | | Base | | | | | | |