Tesla’s shareholders and its board have agreed to settle their Court of Chancery litigation over director compensation, but their attorneys still argued for about two hours in total on Friday afternoon when presenting the proposed settlement to Chancellor Kathaleen McCormick.

The settlement requires the directors to return to Tesla the value of 3.1 million options, which they can pay in any combination of cash, shares of common stock or unexercised options they’ve been compensated with. They also have to permanently give up automatic grants of stock option awards they agreed to forego in 2021 and 2022, as well as additional board member compensation for those years and 2023.

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