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Board of DirectorsAt every stage of funding, a lead investor was granted a seat on the board.Brad Buss was appointed as the first fully independent director.Co-founders removed, Kimbal Musk was brought in. Transition of Board composition : Start-up to a formal public organization. Ehrenpreis Clean tech ; Gracias Material Science; Jurvetson Financial Operations; Kohler - Operational Expertise.BUT STILL.. THE CONTROL REMAINED WITH ELON MUSK

Held 36% of sharesCEO and ChairmanControl on Strategic and Technological decisionsControl over Financing decisions

What was expected As Tesla grows, composition to become more consistent with other public traded companies.

VCs might step down after their stake has been sold.

VCs might be replaced by conventional directors.

What makes accomplishing these steps even more amazing is the time and resources they were accomplished with. Tesla is able to do more, with less because of tight integration. We can stay truer to the original design intent, while producing a car that appeals to customers needs. Board of Directors..

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COMMITTEE MEMBERSBoard of DirectorsThe board retires in a staggered manner. This combination is widely associated with inferior board performance and 24.7% of U.S. companies are flagged for this. The combined effect of this mechanism reduces board accountability to its shareholders.No fully Independent audit committee (as against 99.7% of the companies in this industry).Failing to split the roles of CEO and Chairman.The Elon Musk Revocable Trust dated July 22, 2003 is a limited partner of Draper Fisher Jurvetson Fund X, L.P., with a subscription commitment of $250,000.

Mr. Ehrenpreis is Executive VC of F&A and CFO of Cypress semiconductors, which supplies certain components for Model S.

Super majority vote required for corporate actions: (1) vote on the election or removal of directors or the timing or length of their term of office or (2) nominate directors or propose other action to be voted on by shareowners or

Board of DirectorsWhat makes accomplishing these steps even more amazing is the time and resources they were accomplished with. Tesla is able to do more, with less because of tight integration. We can stay truer to the original design intent, while producing a car that appeals to customers needs. Anti-takeover strategiesStaggered board with three classes of directorsBlank check preferred stock without shareholder approval Limitations on the ability of shareholders to call a special meetingAdvance notice of shareholder proposals for business conducted at shareholder meetingsDaimler - right of first refusalMusk - not to transfer shares to any automobile manufacturer or vote in others favour without Daimlers consentRestrictive covenants by U.S. Department of Energy

Current strategiesLimited voting rights of common sharesSupermajority(66.67%) required to amend certain charter and certain bylaw provisionsBoard is authorized to increase or decrease the size of the board without shareholder approvalLimiting the liability of, and providing indemnification to, the directors and officersShareholders cannot call special meetings

Why is TESLA targeted?Electric vehicle market remains untested in the United StatesIntellectual property, powerful brand image, and industry-leading products will make it a very attractiveSome states, like Kansas, dont allow direct-factory Sales of automobiles but require a brick-and-mortar dealership within the stateEven with a great business model, not every business can make it aloneGoing to take much more debt which will imperil its long term viability

11COMPENSATION

Facts of the caseExecutive compensation at Tesla is heavily skewed toward equity-based pay.Not inconsistent with that awarded at other technology companies in Silicon Valley.Half of the stock option awards granted to Musk in 2009 contain basic time-based vesting and the other half is performance based.

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