Investors

Audit Committee Charter

Adopted Dec 16, 2009
Effective on June 28, 2010
As Modified on June 1, 2011 June 6, 2012

The purpose of the Audit Committee of the Board of Directors (the "Board") of Tesla Motors, Inc. (the "Company") shall be to:
 

  • Provide oversight of the Company's accounting and financial reporting processes and the audit of the Company's financial statements;
  • Assist the Board in oversight of (i) the integrity of the Company's financial statements, (ii) the Company's compliance with legal and regulatory requirements, (iii) the independent auditor's qualifications, independence and performance, (iv) the organization and performance of the Company's internal audit function, and (v) the Company's internal accounting and financial controls; and
  • Provide to the Board such information and materials as it may deem necessary to make the Board aware of significant financial matters that require the attention of the Board.

In furtherance of these purposes, the Audit Committee will undertake those specific duties and responsibilities listed below and such other duties as the Board may from time to time prescribe.

The Audit Committee's responsibility is one of oversight. The members of the Audit Committee are not employees of the Company, and they do not perform, or represent that they perform, the functions of management or the independent auditors. The Audit Committee relies on the expertise and knowledge of management, the internal auditor and the independent registered accounting firm in carrying out its oversight responsibilities. The management of the Company is responsible for preparing accurate and complete financial statements in accordance with generally accepted accounting principles and for establishing and maintaining appropriate accounting principles and financial reporting policies and satisfactory internal control over financial reporting. The independent registered accounting firm is responsible for auditing the Company's annual consolidated financial statements and the effectiveness of the Company's internal control over financial reporting and reviewing the Company's quarterly financial statements. It is not the responsibility of the Audit Committee to prepare or certify the Company's financial statements or guarantee the audits or reports of the independent auditors, nor is it the duty of the Audit Committee to certify that the independent auditor is "independent" under applicable rules. These are the fundamental responsibilities of management and the independent auditors.

The Audit Committee members shall be appointed by, and shall serve at the discretion of, the Board. The Audit Committee shall consist of at least three members of the Board. The Board may designate one member of the Audit Committee as its chair. The Audit Committee may form and delegate authority to subcommittees when appropriate. Members of the Audit Committee must meet the following criteria (as well as any criteria required by the SEC):
 

  • Each member will be an independent director in accordance with (i) the audit committee requirements of the Nasdaq Stock Market, Inc. Marketplace Rules (the "Nasdaq Rules") and (ii) the rules of the SEC;
  • Each member will be able to read and understand fundamental financial statements, in accordance with the Audit Committee requirements of the Nasdaq Rules;
  • At least one member will have past employment experience in finance or accounting, requisite professional certification in accounting, or other comparable experience or background, including a current or past position as a principal financial officer or other senior officer with financial oversight responsibilities; and
  • At least one member will be an "audit committee financial expert" as defined in the rules of the SEC.

The responsibilities and duties of the Audit Committee shall include:

Review Procedures
 

  • Reviewing the reports of management, internal audit and the independent auditors concerning the design, implementation and maintenance of the Company's internal controls and procedures for financial reporting, including meeting periodically with the Company's management, internal audit and the independent auditors to review their assessment of the adequacy of such controls and to review before release the disclosure regarding such system of internal controls required under SEC rules to be contained in the Company's periodic filings and the attestations or reports by the independent auditors relating to such disclosure;
  • Reviewing and providing oversight of the external audit by (i) reviewing the independent auditors' proposed audit scope and approach; (ii) discussing with the Company's independent auditors the financial statements and audit findings, including any significant adjustments, management judgments and accounting estimates, significant new accounting policies, disagreements with management and any other required communications described in applicable accounting standards; (iii) reviewing with the independent auditors the Company's critical accounting policies and practices, alternative treatments of financial information within generally accepted accounting principles that have been discussed with management and the treatment recommended by the independent auditors, and other material written communications between the independent auditors and management; and (iv) reviewing reports submitted to the audit committee by the independent auditors in accordance with applicable SEC requirements;
  • Reviewing and approving the annual internal audit project plan and any proposed changes and reviewing periodic reports summarizing results of the internal audit projects;
  • Reviewing and discussing with management and the independent auditors the annual audited financial statements and quarterly unaudited financial statements, including the Company's disclosures under "Management's Discussion and Analysis of Financial Condition and Results of Operations," prior to filing the Company's Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, respectively, with the SEC;
  • Recommending to the Board, if deemed appropriate, that the audited financial statements be included in the Company's Annual Report on Form 10-K, in accordance with the rules and regulations of the SEC;
  • Directing the Company's independent auditors to review before filing with the SEC the Company's interim financial statements included in Quarterly Reports on Form 10-Q, using professional standards and procedures for conducting such reviews;
  • Conducting a post-audit review of the financial statements and audit findings, including any suggestions for improvements provided to management by internal audit or the independent auditors, and management's response to such suggestions;
  • Reviewing, prior to announcement, Company press releases and other disclosures containing financial information for the purpose of ensuring that such press releases and other disclosures properly disclose financial information presented in accordance with GAAP and, to the extent non-GAAP information is included, adequately disclose how such non-GAAP information differs from the comparable GAAP information and ensure that disclosure of such non-GAAP information is not given undue prominence and that such non-GAAP information does not provide a misleading presentation of the Company's results of operations or financial condition;
  • Discussing guidelines and policies with respect to risk assessment and risk management with the Company's management and overseeing financial risk exposures, including monitoring the Company's financial condition and investments, the integrity of the Company's financial statements, accounting matters, internal controls over financial reporting, the independence of the Company's independent auditor, and guidelines and policies with respect to risk assessment and risk management;
  • Overseeing the Company's annual enterprise business risk assessment, which is conducted by the internal audit function and which includes review of the primary risks facing the Company and the Company's associated risk mitigation measures;
  • Reviewing and approving in advance when possible, or ratifying as soon as reasonably practicable, any related person transactions;
  • Reviewing, in conjunction with counsel, any legal matters that could have a significant impact on the Company's financial statements;
  • Reviewing insurance coverage;
  • Reviewing its own charter and processes on an annual basis;

Independent Auditors



  • Having sole authority over appointing, compensating and overseeing the work of the independent auditors (including resolving disagreements between management and the independent auditors regarding financial reporting) for the purpose of preparing or issuing an audit report or related work;
  • Reviewing the independence of the outside auditors, including (i) obtaining on a periodic basis a written statement from the independent auditors regarding relationships and services with the Company that may impact independence, as defined by applicable standards and SEC requirements, and discussing with the independent auditors their independence, (ii) presenting this statement to the Board, and (iii) to the extent there are relationships, monitoring and investigating them;
  • Receive and review annually a report by the independent auditor describing the firm's internal quality-control procedures, any material issues raised by the most recent internal quality-control review, peer review, or PCAOB review, of the independent auditing firm, or by any inquiry or investigation by governmental or professional authorities, within the preceding five years, respecting one or more independent audits carried out by the firm, and any steps taken to deal with any such issues; and any other required reports from the independent registered public accounting firm;
  • Pre-approving audit and permissible non-audit services provided to the Company by the independent auditors, except where pre-approval is not required because such non-audit services are de minimis under the rules of the SEC, in which case subsequent approval may be obtained. The Audit Committee may delegate to one or more designated members of the Audit Committee the authority to pre-approve audit and permissible non-audit services, provided such pre-approval decision is presented to the full Audit Committee at its scheduled meetings;

Internal Audit



  • Reviewing and approving the selection of the Company's internal auditor;
  • Reviewing the activities, organizational structure and qualifications of the internal audit function;
  • Reviewing and approving changes to the internal audit charter;
  • Reviewing periodically with the Company's internal auditor any issues encountered in the course of the internal audit function's work;

Regulatory Compliance and Other Matters



  • Overseeing compliance with the requirements of the SEC for disclosure of auditor's services and audit committee members, member qualifications and activities;
  • Reviewing management's monitoring of compliance with the Foreign Corrupt Practices Act;
  • Providing a report for inclusion in the Company's proxy statement in accordance with the rules and regulations of the SEC; and
  • Establishing procedures for receiving, retaining and treating complaints received by the Company regarding accounting, internal accounting controls or auditing matters and procedures for the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters.

The Audit Committee shall meet at least once each fiscal quarter. The Audit Committee may meet either in person or telephonically, and at such times and places as the Audit Committee determines. The Audit Committee may establish its own meeting schedule, which it shall provide to the Board. The Audit Committee may invite to its meetings other Board members, Company management and such other persons as the Audit Committee deems appropriate in order to carry out its responsibilities.

The Audit Committee shall meet separately with the Chief Executive Officer and separately with the Chief Financial Officer of the Company at such times as it deems appropriate to review the financial affairs of the Company. The Audit Committee will meet separately with the independent auditors of the Company and separately with the head of internal audit, at such times as it deems appropriate, but not less than quarterly.

The Audit Committee will maintain written minutes of its meetings, which minutes will be filed with the minutes of the meetings of the Board.

The Audit Committee shall make regular reports to the full Board on the actions and recommendations of the Audit Committee.

Members of the Audit Committee shall receive such fees, if any, for their service as Audit Committee members as may be determined by the Board in its sole discretion.

Members of the Audit Committee may not receive any compensation from the Company except the fees that they receive for service as a member of the Board or any committee thereof.

The independent auditors shall report directly to the Audit Committee. In addition, the Audit Committee may retain, as appropriate and at the Company's expense, outside legal, accounting or other advisors to advise or assist the Audit Committee in the performance of any of the responsibilities and duties set forth above.


Committee Members

Robyn M. Denholm
Robyn M. Denholm
Director

Robyn M. Denholm has been executive vice president and chief financial & operations officer at Juniper Networks Inc. since August 2007. In these roles she has helped Juniper achieve record revenues while delivering breakthrough innovations to customers. In 2011, Denholm was a Bay Area CFO of the Year finalist and she was recently named on Silicon Valley Business Journal's Women of Influence List. She joined Juniper from Sun Microsystems, where she served as Senior Vice President, Corporate Strategic Planning.

Denholm began her career in Australia, serving in various finance assignments for Toyota Motor Corporation and Arthur Andersen and Company. She holds a bachelor's degree in economics from the University of Sydney and a master's degree in commerce from the University of New South Wales.

Antonio J. Gracias
Antonio J. Gracias
Director

Mr. Gracias serves as Valor's Chief Executive Officer and Chairman of the Investment Committee. His duties include overall responsibility for the Firm's management, operations, and investing. These include but are not limited to: human resources, management of the Firm's board, raising capital, limited partner communication, deal generation, investment selection, investment strategy, investment committee management, transaction structuring, and portfolio company management and improvement.

Mr. Gracias has over 15 years experience investing in a variety of sectors including private equity, public equity, and real estate transactions. Mr. Gracias is Valor's Founder and Chief Executive Officer. Prior to founding Valor in 2001, Mr. Gracias served as Founder and Managing Member of MG Capital from 1995 through 2000. MG Capital was a private equity firm headquartered in Chicago, Illinois. As the lead transaction principal, Mr. Gracias sourced investments in nine middle market manufacturing companies where MG Capital played the role of lead equity sponsor. He also sourced three non-lead investments in a diverse set of industries. Mr. Gracias served as the Chief Executive Officer of MG Capital's electronic connector holdings, Connector Service Corporation. He managed the company through growth from $10 million to $125 million in revenue before exiting the investment in 2001. In addition, Mr. Gracias served as Chief Executive Officer of Industrial Powder Coatings, Inc., a $65 million revenue supplier to the auto parts and appliance sectors. Prior to MG Capital, Mr. Gracias was an Associate with Goldman, Sachs & Co. in New York where he served the firm's institutional clients in the International Equity Division.

Mr. Gracias is a member of the Commercial Club of Chicago, a member of the Board of Directors of the Grand Victoria Foundation, a member of the Board of Trustees of the Illinois Institute of Technology, a member of the Board of Directors of The Economic Club of Chicago, a Trustee of the Field Museum, and a member of the Board of Visitors of the University of Chicago Law School. Mr. Gracias received the 2008 Immigrant & Refugee Contributions Award for Entrepreneurial & Business Leadership from Changing Worlds, an educational arts non-profit organization. Mr. Gracias is a 2009 Henry Crown Fellow, an Aspen Institute program designed to engage the next generation of leaders in the challenge of community-spirited leadership. He is also a member of several Valor portfolio company boards.

Mr. Gracias holds a joint B.S. and M.S.F.S. (honors degree) in International Finance and Economics from the Georgetown University School of Foreign Service. He also studied corporate structures and economic development at Waseda University in Tokyo, Japan. Prior to completing his Masters, Mr. Gracias returned to Japan as a Nikko Securities Fellow. Mr. Gracias holds a J.D. from the University of Chicago Law School. He is fluent in Spanish, proficient in Portuguese, and has a working knowledge of Japanese.

Steve Jurvetson
Steve Jurvetson
Director

Steve Jurvetson is a managing director of Draper Fisher Jurvetson, a leading venture capital firm and one of the most active energy and clean tech investors, with affiliate offices around the world and $6 billion under management. Steve was the founding venture investor in Hotmail, Interwoven and Kana. He also led the firm's investments in Tradex and Cyras (acquired for $8 billion).

Previously, he was an R&D engineer at Hewlett-Packard, where seven of his communications chip designs were fabricated. His prior technical experience also includes programming, materials science research and computer design at HP, the Center for Materials Research, and Mostek. He has also worked in product marketing at Apple and NeXT.

At Stanford, he finished his bachelor of science degree in electrical engineering in 2-and-a-half years and graduated No. 1 in his class. He also received a master's of science degree in electrical engineering and a master's of business administration from Stanford, and he served as president of the Western Association of Venture Capitalists.

He was honored as "The Valley's Sharpest VC" on the cover of Business 2.0 and chosen by Forbes as one of "Tech's Best Venture Investors," by the VC Journal as one of the "Ten Most Influential VCs", and by Fortune as part of their "Brain Trust of Top Ten Minds."