personally liable to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (1) for any breach of the directors duty
of loyalty to the corporation or its stockholders, (2) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (3) under Section 174 of the DGCL (regarding, among other things,
the payment of unlawful dividends or unlawful stock purchases or redemptions) or (4) for any transaction from which the director derived an improper personal benefit. Teslas certificate of incorporation provides for such limitation of
liability.
Section 145(a) of the DGCL empowers a corporation to indemnify any director, officer, employee or agent, or former
director, officer, employee or agent, who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or
in the right of the corporation), by reason of such persons service as a director, officer, employee or agent of the corporation, or such persons service, at the corporations request, as a director, officer, employee or agent of
another corporation or enterprise, against expenses (including attorneys fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding; provided that
such director or officer acted in good faith and in a manner reasonably believed to be in or not opposed to the best interests of the corporation; and, with respect to any criminal action or proceeding, provided that such director or officer had no
reasonable cause to believe his conduct was unlawful.
Section 145(b) of the DGCL empowers a corporation to indemnify any person who
was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that such person is or was a director,
officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another enterprise, against expenses (including attorneys fees) actually and reasonably incurred
in connection with the defense or settlement of such action or suit; provided that such director or officer acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation, except
that no indemnification may be made in respect of any claim, issue or matter as to which such director or officer shall have been adjudged to be liable to the corporation unless and only to the extent that the Delaware Court of Chancery or the court
in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such director or officer is fairly and reasonably entitled to indemnity for such
expenses that the court shall deem proper. Notwithstanding the preceding sentence, except as otherwise provided in Teslas bylaws, Tesla shall be required to indemnify any such person in connection with a proceeding (or part thereof) commenced
by such person only if the commencement of such proceeding (or part thereof) by any such person was authorized by the board of directors.
In addition, Teslas certificate of incorporation provides that Tesla must indemnify its directors and officers to the fullest extent
authorized by law. Tesla is also expressly required to advance certain expenses to its directors and officers and carry directors and officers insurance providing indemnification for Teslas directors and officers for certain
liabilities.
Tesla also maintains a directors and officers insurance policy pursuant to which directors and officers are
insured against liability for actions in their capacity as directors and officers.
Item 7. Exemption from Registration Claimed.
Not applicable.