Document

DEF 14A 1 net-def14adefinitiveproxy2.htm DEF 14A Document

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_____________________________________________________________________

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

_____________________________________________________________________



Filed by the Registrant x			Filed by a Party other than the Registrant ¨


Check the appropriate box:

¨			Preliminary Proxy Statement

¨			Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

x			Definitive Proxy Statement

¨			Definitive Additional Materials

¨			Soliciting Material under §240.14a-12

CLOUDFLARE, INC.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)


Payment of Filing Fee (Check the appropriate box):

x			No fee required.

¨			Fee paid previously with preliminary materials.

¨			Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11.

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Cloudflare, Inc.

101 Townsend Street

San Francisco, California 94107

April 21, 2022

NOTICE OF 2022 ANNUAL MEETING OF STOCKHOLDERS TO BE HELD VIRTUALLY ON JUNE 2, 2022

Dear Stockholder:

We are pleased to invite you to attend the 2022 Annual Meeting of Stockholders, including any adjournments, continuations, or postponements thereof (the Annual Meeting), of Cloudflare, Inc. (Cloudflare) to be held virtually on Thursday, June 2, 2022 at 9:00 a.m. Pacific Time. The Annual Meeting will be held via a live interactive audio webcast on the Internet. If you held shares of our Class A common stock or Class B common stock at the close of business on April 7, 2022, you will be able to vote and submit your appropriate questions during the meeting at www.virtualshareholdermeeting.com/NET2022. We are holding the Annual Meeting for the following purposes, which are more fully described in the accompanying proxy statement:

•to elect as Class III directors the three nominees named in the proxy statement, to serve until the 2025 annual meeting of stockholders and until their successors are duly elected and qualified, subject to their earlier death, resignation, or removal;

•to ratify the appointment of KPMG LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2022;

•to approve, on an advisory basis, the compensation of our named executive officers;

•to approve the performance equity awards granted to our Co-Founders, Matthew Prince and Michelle Zatlyn; and

•to transact any other business that properly comes before the Annual Meeting.

We have elected to provide Internet access to our Annual Meeting materials, which include the proxy statement for our Annual Meeting (the Proxy Statement) accompanying this notice, in lieu of mailing printed copies. On or about April 21, 2022, we expect to mail to our stockholders a Notice of Internet Availability of Proxy Materials (the Notice) containing instructions on how to access the Proxy Statement and our Annual Report on Form 10-K for the year ended December 31, 2021 (2021 Annual Report). The Notice provides instructions on how to vote online or by telephone and includes instructions on how to receive a paper copy of proxy materials by mail. The Proxy Statement and our 2021 Annual Report can be accessed directly at the Internet address www.proxyvote.com using the control number located on the Notice, on your proxy card, or in the instructions that accompanied your proxy materials.

Our Board of Directors has fixed the close of business on April 7, 2022 as the record date for the Annual Meeting. Only stockholders of record at the close of business on April 7, 2022 are entitled to notice of, and to vote, during the Annual Meeting as set forth in the Proxy Statement. A list of stockholders eligible to vote at the Annual Meeting will be available for review during our regular business hours at our principal executive offices for the ten days prior to the meeting for any purpose related to the meeting, and will be available online at www.virtualshareholdermeeting.com/NET2022 during the entirety of the Annual Meeting.

Your vote is important. Whether or not you plan to virtually attend the meeting, please ensure that your shares are represented and voted during the Annual Meeting by signing and returning a proxy card or by using our Internet or telephonic voting system.

Thank you for your ongoing support of, and continued interest in, Cloudflare.

By order of the Board of Directors,



Douglas Kramer
General Counsel and Secretary

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GENERAL INFORMATION			1
BOARD OF DIRECTORS AND CORPORATE GOVERNANCE			8
Nominees for Director			10
Directors Not Standing for Election at the Annual Meeting			10
Director Independence			12
Board Leadership Structure			12
Board Meetings and Committees			13
Compensation Committee Interlocks and Insider Participation			15
Executive Sessions of Non-Employee Directors			15
Considerations in Evaluating Director Nominees			16
Stockholder Recommendations for Nominations to the Board of Directors			16
Communications with Our Board of Directors			17
Corporate Governance Guidelines and Code of Business Conduct and Ethics			17
Role of the Board in Risk Oversight			17
Director Compensation			19
PROPOSAL ONE: ELECTION OF DIRECTORS			22
PROPOSAL TWO: RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM			23
REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS			25
PROPOSAL THREE: ADVISORY VOTE ON THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS			26
PROPOSAL FOUR: APPROVAL OF THE PERFORMANCE AWARDS TO OUR CO-FOUNDERS			27
EXECUTIVE OFFICERS			52
EXECUTIVE COMPENSATION			53
Compensation Discussion and Analysis			53
Report of the Compensation Committee of the Board of Directors			68
Compensation Risk Assessment			69
2021 Summary Compensation Table			70
Grants of Plan Based Awards in 2021			70
Outstanding Equity Awards at 2021 Year-End			72
Option Exercises and Stock Vested in 2021			74
Potential Payments upon Termination or Change in Control			75
CEO Pay Ratio			77
EQUITY COMPENSATION PLAN INFORMATION			78
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT			79
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS			82
OTHER MATTERS			84
APPENDIX A

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Cloudflare, Inc.

101 Townsend Street

San Francisco, California 94107

PROXY STATEMENT

FOR THE 2022 ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD AT 9:00 AM PACIFIC TIME ON THURSDAY, JUNE 2, 2022

GENERAL INFORMATION

Our Board of Directors solicits your proxy on our behalf for the 2022 Annual Meeting of Stockholders, including any adjournments, continuations, or postponements thereof (the Annual Meeting), for the purposes set forth in this proxy statement for our Annual Meeting (this Proxy Statement) and the accompanying Notice of Annual Meeting. The Annual Meeting will be held via a live audio webcast on the Internet on Thursday, June 2, 2022 at 9:00 a.m. Pacific Time. The Notice of Internet Availability of Proxy Materials (the Notice) containing instructions on how to access this Proxy Statement and the Annual Report on Form 10-K for the year ended December 31, 2021 (2021 Annual Report) is first being mailed on or about April 21, 2022 to all stockholders entitled to vote at the Annual Meeting. If you held shares of our Class A common stock or Class B common stock at the close of business on April 7, 2022, you are invited to virtually attend the meeting at www.virtualshareholdermeeting.com/NET2022 and vote on the proposals described in this Proxy Statement.

In this Proxy Statement, the terms "Cloudflare," "the company," "we," "us," and "our" refer to Cloudflare, Inc. and its subsidiaries. The mailing address of our principal executive offices is 101 Townsend Street, San Francisco, California 94107.

The information provided in the “question and answer” format below is for your convenience only and is merely a summary of the information contained in this Proxy Statement. You should read this entire Proxy Statement carefully. Information contained on, or that can be accessed through, our website is not intended to be incorporated by reference into this Proxy Statement and references to our website address in this Proxy Statement are inactive textual references only.

What matters are being voted on during the Annual Meeting?

You will be voting on the following proposals:

•the election of Mark Anderson, Mark Hawkins, and Carl Ledbetter as Class III directors, to serve until the 2025 annual meeting of stockholders or until their successors are duly elected and qualified, subject to their earlier death, resignation, or removal;

•the ratification of the appointment of KPMG LLP as our independent registered public accounting firm for our fiscal year ending December 31, 2022;

•to approve, on an advisory basis, the compensation of our named executive officers;

•to approve the performance equity awards granted to our Co-Founders, Matthew Prince and Michelle Zatlyn; and

•any other business as may properly come before the Annual Meeting.

As of the date of this Proxy Statement, our management and Board of Directors were not aware of any other matters to be presented at the Annual Meeting.

For a discussion of who our “named executive officers” are, see the section titled “Executive Compensation—Compensation Discussion and Analysis.”

How does the Board of Directors recommend that I vote on these proposals?

Our Board of Directors recommends that you vote your shares:

•"FOR" the election of Mark Anderson, Mark Hawkins, and Carl Ledbetter as Class III directors;

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•"FOR" the ratification of the appointment of KPMG LLP as our independent registered public accounting firm for our fiscal year ending December 31, 2022;

•"FOR" the approval, on an advisory basis, of the compensation of our named executive officers; and

•"FOR" the approval of the performance equity awards granted to our co-founders, Matthew Prince and Michelle Zatlyn.

How many votes are needed for approval of each proposal?

Proposal One: The election of directors requires a plurality of the voting power of the shares of our common stock present virtually or by proxy during the Annual Meeting and entitled to vote thereon to be approved. "Plurality" means that the nominees who receive the largest number of votes cast "FOR" such nominees are elected as directors. As a result, any shares not voted "FOR" a particular nominee, whether as a result of stockholder abstention or a broker non-vote (in other words, where a broker has not received voting instructions from the beneficial owner and for which the broker does not have discretionary power to vote on a particular matter), will not be counted in such nominee's favor and will have no effect on the outcome of the election. You may vote “FOR” or “WITHHOLD” on each of the nominees for election as a director.

Proposal Two: The ratification of the appointment of KPMG LLP as our independent registered public accounting firm for our fiscal year ending December 31, 2022 requires the affirmative vote of a majority of the voting power of the shares of our common stock present virtually or by proxy during the Annual Meeting and entitled to vote thereon to be approved. You may vote “FOR,” “AGAINST,” or “ABSTAIN” with respect to this proposal. Abstentions are considered shares present and entitled to vote on this proposal, and thus, will have the same effect as a vote "AGAINST" this proposal. Broker non-votes will have no effect on the outcome of this proposal. Because this is a routine proposal, we do not expect any broker non-votes on this proposal.

Proposal Three: The approval, on an advisory basis, of the compensation of our named executive officers requires the affirmative vote of a majority of the voting power of the shares of our common stock present virtually or by proxy during the Annual Meeting and entitled to vote thereon to be approved. You may vote “FOR,” “AGAINST,” or “ABSTAIN” with respect to this proposal. Abstentions are considered shares present and entitled to vote on this proposal, and thus, will have the same effect as a vote “AGAINST” this proposal. Broker non-votes will have no effect on the outcome of this proposal. Because this proposal is an advisory vote, the result will not be binding on our Board of Directors or our company. Our Board of Directors and our compensation committee, however, will consider the outcome of the vote when determining named executive officer compensation.

Proposal Four: The approval of the performance equity awards granted to Matthew Prince and Michelle Zatlyn requires the affirmative vote under both of two different voting standards:

(1) the affirmative vote of a majority of the voting power of the shares of our common stock present virtually or by proxy during the Annual Meeting and entitled to vote on the performance equity awards (the Bylaws Standard); and

(2) the affirmative vote of a majority of the voting power of all issued and outstanding shares of Class A common stock and Class B common stock entitled to vote on the performance equity awards, as of the Record Date (defined below) and voting as a single class, excluding those shares of our common stock held of record or beneficially, directly or indirectly, by: (a) members of the Excluded Group and (b) members of the Non-Founder Award Group (together the shares represented by (a) - (b), the Excluded Shares) (the Majority of the Minority Standard).

The "Excluded Group" means either Matthew Prince or Michelle Zatlyn or any of their respective Permitted Entities or Family Members, or any “group” that includes any of Matthew Prince or Michelle Zatlyn or their Permitted Entities or Family Members. "Non-Founder Award Group" means each named executive officer and other employee that was awarded a performance-based option grant under the 2019 Plan effective as of February 14, 2022, or any of their respective Permitted Entities or Family Members. Each of "Family Members" and "Permitted Entities" have the meanings ascribed to them in the Amended and Restated Certificate of Incorporation of the company, effective as of September 17, 2019.

The Excluded Shares will not be included in the numerator or denominator for purposes of determining whether the Majority of the Minority Standard has been obtained. You may vote “FOR,” “AGAINST,” or “ABSTAIN” with respect to this proposal. Abstentions and broker non-votes are considered shares present and entitled to vote on this proposal, and thus, will have the same effect as a vote “AGAINST” this proposal.

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Who is entitled to vote?

Holders of either our Class A common stock or Class B common stock as of the close of business on April 7, 2022, which is the record date for the Annual Meeting (the Record Date), may vote during the Annual Meeting. As of the Record Date, there were 280,915,609 shares of our Class A common stock and 45,127,746 shares of our Class B common stock outstanding. Our Class A common stock and Class B common stock will vote as a single class on all matters described in this Proxy Statement for which your vote is being solicited. Stockholders are not permitted to cumulate votes with respect to the election of directors. Each share of Class A common stock is entitled to one vote on each proposal and each share of Class B common stock is entitled to 10 votes on each proposal. Our Class A common stock and Class B common stock are collectively referred to in this Proxy Statement as our "common stock."

A list of stockholders eligible to vote at the Annual Meeting will be available for review during our regular business hours at our principal executive offices for the ten days prior to the Annual Meeting for any purpose related to the Annual Meeting. If you would like to view the list, please contact our corporate secretary to schedule an appointment by writing to him at Cloudflare, Inc., 101 Townsend Street, San Francisco, California 94107, Attention: Secretary. The list of stockholders eligible to vote at the Annual Meeting will be available online at www.virtualshareholdermeeting.com/NET2022 during the entirety of the Annual Meeting.

Registered Stockholders. If your shares of our common stock are registered directly in your name with our transfer agent, Computershare Trust Company, N.A. (Computershare), then you are considered the stockholder of record with respect to those shares, and the Notice was provided to you directly by us. As the stockholder of record, you have the right to grant your voting proxy directly to the individuals listed on the proxy card or to vote live during the Annual Meeting. Throughout this Proxy Statement, we refer to these registered stockholders as "stockholders of record."

Street Name Stockholders. If your shares of our common stock are held on your behalf in a brokerage account or by a bank or other nominee, then you are considered to be the beneficial owner of shares that are held in "street name," and the Notice was forwarded to you by your broker, bank, or other nominee, who is considered the stockholder of record with respect to those shares. As the beneficial owner, you have the right to direct your broker, bank, or other nominee as to how to vote your shares. Beneficial owners are also invited to attend the Annual Meeting. However, since a beneficial owner is not the stockholder of record, you may not vote your shares of our common stock live during the Annual Meeting unless you follow your broker's procedures for obtaining a legal proxy. If you request a printed copy of our proxy materials by mail, your broker, bank, or other nominee will provide a voting instruction form for you to use. Throughout this Proxy Statement, we refer to stockholders who hold their shares through a broker, bank, or other nominee as "street name stockholders."

What is the quorum requirement?

A quorum is the minimum number of shares required to be present or represented by proxy during the Annual Meeting to properly hold an annual meeting of stockholders and conduct business under our amended and restated bylaws and Delaware law. The presence, whether virtually or by proxy, of a majority of the voting power of all issued and outstanding shares of our common stock entitled to vote on the Record Date will constitute a quorum for the Annual Meeting. The shares subject to a proxy that are not being voted on a particular matter because of either stockholder withholding or broker non-vote will count for purposes of determining the presence of a quorum. Abstentions are also counted in the determination of a quorum. If there is no quorum, the chairperson of the meeting may adjourn the meeting to another time or place.

How do I vote and what are the voting deadlines?

If you are a stockholder of record, there are four ways to vote:

(1) by Internet at www.proxyvote.com, 24 hours a day, seven days a week, until 11:59 p.m. Eastern Time on June 1, 2022 (have your Notice or proxy card in hand when you visit the website);

(2) by toll-free telephone at 1-800-690-6903, 24 hours a day, seven days a week, until 11:59 p.m. Eastern Time on June 1, 2022 (have your Notice or proxy card in hand when you call);

(3) by completing, signing, and mailing your proxy card (if you received printed proxy materials) to be received prior to the scheduled start of the Annual Meeting; or

(4) by Internet during the Annual Meeting. Instructions on how to virtually attend and vote during the Annual Meeting are described at www.virtualshareholdermeeting.com/NET2022 (have your Notice or proxy card in hand when you visit the website).

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If you are a street name stockholder, you will receive voting instructions from your broker, bank, or other nominee. You must follow the voting instructions provided by your broker, bank, or other nominee in order to direct your broker, bank, or other nominee on how to vote your shares. Street name stockholders should generally be able to vote by returning a voting instruction form and may be able to vote by telephone or on the Internet, depending on the voting process of your broker, bank, or other nominee. As discussed above, if you are a street name stockholder, you may not vote your shares live at the virtual Annual Meeting unless you obtain a legal proxy from your broker, bank, or other nominee.

Can I change my vote or revoke my proxy?

Yes. If you are a stockholder of record, you can change your vote or revoke your proxy any time before the Annual Meeting by:

•notifying our Secretary, in writing, at Cloudflare, Inc., 101 Townsend Street, San Francisco, California 94107 before the vote is counted;

•voting again using the telephone or Internet before 11:59 p.m. Eastern Time on June 1, 2022 (your latest telephone or Internet proxy is the one that will be counted);

•by completing and mailing a later-dated proxy card (which must be received prior to the scheduled start of the Annual Meeting); or

•attending and voting during the Annual Meeting. Simply logging into the Annual Meeting will not, by itself, revoke your proxy.

If you are a street name stockholder, you may revoke any prior voting instructions by contacting your broker, bank, or nominee.

What is the effect of giving a proxy?

Proxies are solicited by and on behalf of our Board of Directors. Douglas Kramer and Thomas Seifert have been designated as proxy holders by our Board of Directors. When proxies are properly dated, executed, and returned, the shares represented by such proxies will be voted during the Annual Meeting in accordance with the instructions of the stockholder. If no specific instructions are given, however, the shares will be voted in accordance with the recommendations of our Board of Directors as described above. If any matters not described in this Proxy Statement are properly presented during the Annual Meeting, the proxy holders will use their own judgment to determine how to vote the shares. If the Annual Meeting is adjourned or postponed, the proxy holders can vote the shares on the new Annual Meeting date as well, unless you have properly revoked your proxy instructions, as described above.

What is the effect of abstentions and broker non-votes?

Votes withheld from any nominee, abstentions, and broker non-votes are counted as present for purposes of determining the presence of a quorum. Shares voting “WITHHOLD” on Proposal One will have no impact on the outcome of Proposal One. Abstentions will have the same effect as a vote "AGAINST" on Proposals Two, Three, and Four.

Brokerage firms and other intermediaries holding shares of our common stock in street name for their customers are generally required to vote such shares in the manner directed by their customers. In the absence of timely directions, your broker, bank, or other nominee will have discretion to vote your shares on our sole "routine" matter, which is the proposal to ratify the appointment of KPMG LLP as our independent registered public accounting firm for our fiscal year ending December 31, 2022. Absent direction from you, your broker, bank, or other nominee will not have discretion to vote on Proposals One, Three, or Four, which are "non-routine" matters. In the event that your broker, bank, or other nominee votes your shares on our sole routine matter, but is not able to vote your shares on the non-routine matters, then those shares will be treated as broker non-votes with respect to the non-routine proposals. Accordingly, if you own shares through a nominee, such as a broker or bank, please be sure to instruct your nominee how to vote to ensure that your shares are counted on each of the proposals.

How are proxies solicited for the Annual Meeting and who is paying for such solicitation?

We have retained Innisfree M&A Incorporated (Innisfree), a proxy solicitation firm, who may solicit proxies on behalf of our Board of Directors. In addition, our directors, officers, and other employees may also solicit proxies in person, by mail, telephone, email, or by other means of communication.

We will pay Innisfree a fee of approximately $50,000, plus an additional fee of $50,000 in the event that the Disinterested Stockholders approve Proposal Four, plus an agreed upon fee per call made or received from certain retail investors and reasonable out-of-pocket fees and expenses for soliciting proxies. In addition, Innisfree and certain related persons will be

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indemnified against certain liabilities arising out of or in connection with the engagement. All expenses associated with this solicitation will be borne by us, including the preparation, assembly, printing, mailing, and distribution of these proxy materials. In addition, we will reimburse brokers, banks, and other nominees for reasonable expenses that they incur in sending our proxy materials to you if a broker, bank, or other nominee holds shares of our common stock on your behalf. Our directors, officers, and other employees will not be paid any additional compensation for soliciting proxies.

Where can I find the voting results of the Annual Meeting?

We will announce preliminary voting results during the Annual Meeting. We will also disclose voting results on a Current Report on Form 8-K that we will file with the U.S. Securities and Exchange Commission (SEC) within four business days after the Annual Meeting. If final voting results are not available to us in time to file a Current Report on Form 8-K within four business days after the Annual Meeting, we will provide preliminary voting results in the Current Report on Form 8-K and will provide the final results in an amendment to the Current Report on Form 8-K as soon as they become available.

Why did I receive a Notice of Internet Availability of Proxy Materials instead of a full set of proxy materials?

In accordance with the rules of the SEC, we have elected to furnish our proxy materials, including this Proxy Statement and our 2021 Annual Report, primarily via the Internet. As a result, we are mailing our stockholders the Notice instead of a paper copy of the proxy materials. The Notice containing instructions on how to access our proxy materials is first being mailed on or about April 21, 2022 to all stockholders entitled to vote during the Annual Meeting. Stockholders may request to receive all future proxy materials in printed form by mail or electronically by e-mail by following the instructions contained in the Notice. We encourage stockholders to take advantage of the availability of our proxy materials on the Internet to help reduce the environmental impact and cost of our annual meetings of stockholders.

What does it mean if I receive more than one Notice or more than one set of printed proxy materials?

If you receive more than one Notice or more than one set of printed proxy materials, then your shares may be registered in more than one name and/or are registered in different accounts. Please follow the voting instructions on each Notice or each set of printed proxy materials, as applicable, to ensure that all of your shares are voted.

I share an address with another stockholder, and we received only one paper copy of the Notice or proxy materials. How may I obtain an additional copy of the Notice or proxy materials?

We have adopted a procedure called "householding," which is permitted by SEC rules. Under this procedure, we deliver a single copy of the Notice and, if applicable, our proxy materials, to multiple stockholders who share the same address, unless we have received contrary instructions from one or more of such stockholders. This procedure reduces our printing costs, mailing costs, and fees. Stockholders who participate in householding will continue to be able to access and receive separate proxy cards. Upon written or oral request, we will deliver promptly a separate copy of the Notice and, if applicable, our proxy materials to any stockholder at a shared address to which we delivered a single copy of any of these materials. To receive a separate copy, or, if a stockholder is receiving multiple copies, to request that we only send a single copy of next year's Notice and, if applicable, our proxy materials, such stockholder may contact us at:

Cloudflare, Inc.

Attention: Investor Relations

101 Townsend Street

San Francisco, California 94107

Street name stockholders may contact their broker, bank, or other nominee to request information about householding.

What is the deadline to propose actions for consideration at next year's annual meeting of stockholders or to nominate individuals to serve as directors?

Stockholder Proposals

As provided in Rule 14a-8 under the Securities Exchange Act of 1934, as amended (the Exchange Act), stockholders may present proper proposals for inclusion in our proxy statement and for consideration at next year's annual meeting of stockholders by submitting their proposals in writing to our Secretary in a timely manner. For a stockholder proposal to be considered for inclusion in our proxy statement for the 2023 annual meeting of stockholders, our Secretary must receive the written proposal at our principal executive offices not later than December 22, 2022. In addition, stockholder proposals must

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comply with the other requirements of Rule 14a-8 regarding the inclusion of stockholder proposals in company-sponsored proxy materials. Stockholder proposals should be addressed to:

Cloudflare, Inc.

Attention: Secretary

101 Townsend Street

San Francisco, California 94107

Our amended and restated bylaws also establish an advance notice procedure for stockholders who wish to present a proposal before an annual meeting of stockholders but do not intend for the proposal to be included in our proxy statement. Our amended and restated bylaws provide that the only business that may be conducted at an annual meeting of stockholders is business that is (i) specified in our proxy materials with respect to such annual meeting, (ii) otherwise properly brought before such annual meeting by or at the direction of our Board of Directors, or (iii) properly brought before such meeting by a stockholder of record entitled to vote at such annual meeting who has delivered timely written notice to our Secretary, which notice must contain the information specified in our amended and restated bylaws. To be timely for the 2023 annual meeting of stockholders, our Secretary must receive the written notice at the address set forth above:

•not earlier than the close of business on February 5, 2023; and

•not later than the close of business on March 7, 2023.

In the event that we hold the 2023 annual meeting of stockholders more than 30 days before, or more than 60 days after, the one-year anniversary of the Annual Meeting, then, for notice by the stockholder to be timely, it must be received by our Secretary not earlier than the close of business on the 120th day prior to such annual meeting and not later than the close of business on the later of (i) the 90th day prior to such annual meeting or (ii) the tenth day following the day on which public announcement of the date of such annual meeting is first made.

Pursuant to Rule 14a-8, if a stockholder has notified us of his, her, or its intention to electronically present a proposal at an annual meeting of stockholders but does not appear to electronically present his, her, or its proposal at such annual meeting, then we are not required to present the proposal for a vote at such annual meeting.

Nomination of Director Candidates

Holders of our common stock may propose director candidates for consideration by our nominating and corporate governance committee. Any such recommendations should include the nominee's name and qualifications for membership on our Board of Directors and should be directed to our Secretary at the address set forth above. For additional information regarding stockholder recommendations for director candidates, see the section titled "Board of Directors and Corporate Governance—Stockholder Recommendations and Nominations to the Board of Directors."

In addition, our amended and restated bylaws permit stockholders to nominate directors for election at an annual meeting of stockholders. To nominate a director, the stockholder must provide the information required by our amended and restated bylaws. In addition, the stockholder must give timely notice to our Secretary in accordance with our amended and restated bylaws, which, in general, require that the notice be received by our Secretary within the time periods described above under "Stockholder Proposals" for stockholder proposals that are not intended to be included in our proxy statement.

Availability of Bylaws

A copy of our amended and restated bylaws is available via the SEC's website at http://www.sec.gov. You may also contact our Secretary at the address set forth above for a copy of the relevant bylaw provisions regarding the requirements for making stockholder proposals and nominating director candidates.

What do I need to be able to attend the Annual Meeting online?

We will be hosting our Annual Meeting via live webcast only. You are entitled to participate in the Annual Meeting only if you were a stockholder as of the close of business on April 7, 2022, or if you hold a valid proxy for the Annual Meeting. Any such stockholder can attend the Annual Meeting live online at www.virtualshareholdermeeting.com/NET2022. In order to be able to attend the Annual Meeting, you will need the 16-digit control number, which is located on your Notice, on your proxy card, or in the instructions accompanying your proxy materials. Instructions on how to participate in the Annual Meeting are also posted online at www.proxyvote.com. If you do not have a control number, you will be able to listen to the meeting only and you will not be able to vote or submit your appropriate questions during the meeting.

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The Annual Meeting webcast will begin promptly at 9:00 a.m. Pacific Time on Thursday, June 2, 2022. We encourage you to access the meeting prior to the start time. Online check-in will begin at 8:45 a.m. Pacific Time, and you should allow ample time for the check-in procedures.

Why is this Annual Meeting being held virtually?

We are continuously exploring technologies and services that will best permit our stockholders to engage with us from any location around the world and exercise their vote. As was the case for last year's annual meeting of stockholders, we have decided to conduct the Annual Meeting on a virtual basis because we believe it will be more beneficial than holding a live meeting. The virtual meeting technology that we use provides ease of access and real-time communication, while reducing the environmental impact and costs associated with an in-person meeting. We believe that by hosting our Annual Meeting virtually, our stockholders will be provided comparable rights and opportunities to participate as they would at an in-person meeting, while offering a greater level of flexibility for many of our stockholders who may not be able to attend an annual meeting of stockholders in person.

Stockholders of record and street name stockholders with a legal proxy from their broker, bank, or other nominee will be able to attend the Annual Meeting by visiting www.virtualshareholdermeeting.com/NET2022, which will allow such stockholders to submit appropriate questions and vote shares electronically during the Annual Meeting. We believe our stockholders’ increased opportunity to participate in the Annual Meeting virtually should alleviate any concerns about disenfranchisement of our stockholder base as a result of our decision not to hold the Annual Meeting in person.

How can I submit a question before or during the Annual Meeting?

If you want to submit a question during the Annual Meeting, log into www.virtualshareholdermeeting.com/NET2022, type your question into the “Ask a Question” field, and click “Submit.” Stockholders are permitted to submit appropriate questions before and during the Annual Meeting via www.proxyvote.com and the virtual meeting website, respectively, that are in compliance with the meeting rules of conduct that will be available on the virtual meeting website and with a limit of one question per stockholder. We will answer as many questions submitted in accordance with the meeting rules of conduct as possible in the time allotted for the meeting. Only questions that are relevant to an agenda item to be voted on by stockholders will be answered. Our virtual meeting website will also contain instructions for accessing technical support to assist in the event a stockholder encounters any difficulties accessing the virtual meeting. The questions received during the meeting that are in compliance with the meeting rules of conduct and our answers to such questions will be available as soon as practicable after the Annual Meeting on https://cloudflare.NET. The questions and answers will remain available on https://cloudflare.NET for one week after posting.

What if I have technical difficulties or trouble accessing the Annual Meeting?

If you encounter any difficulties accessing the Annual Meeting during the check-in or meeting time, please call the technical support number that will be posted on the login page at www.virtualshareholdermeeting.com/NET2022. Technical support will be available starting at 8:45 a.m. Pacific Time on Thursday, June 2, 2022 and will remain available until the Annual Meeting has ended.

Who will count the votes?

Votes will be counted by the inspector of election appointed for the Annual Meeting by our Board of Directors.

How can I contact the company’s transfer agent?

You may contact our transfer agent, Computershare, by telephone at 1-800-736-3001 or by regular mail to Computershare P.O. Box 505000, Louisville, Kentucky 40233-5000 or by overnight delivery to 462 South 4th Street, Suite 1600, Louisville, Kentucky 40202. You may also access instructions with respect to certain stockholder matters (e.g., change of address) via the Internet at www.computershare.com/investor.

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BOARD OF DIRECTORS AND CORPORATE GOVERNANCE

Our business and affairs are managed under the direction of our Board of Directors, which is elected by our stockholders. Our Board of Directors consists of eight directors, all of whom, other than Mr. Prince and Ms. Zatlyn, qualify as "independent" under the listing standards of the New York Stock Exchange (the NYSE). Our Board of Directors is divided into three classes with staggered three-year terms. At each annual meeting of stockholders, one class of directors will be elected for a three-year term to succeed the class whose term is then expiring.

The following table sets forth information regarding our directors and director nominees, including their ages and current committee assignments, as of March 31, 2022:


	Class	Age	Position	Director Since	Current Term Expires	Expiration of Term For Which Nominated
Employee Directors:
Matthew Prince	II	47	Chief Executive Officer and Chair of the Board of Directors	2009	2024	—
Michelle Zatlyn	I	42	President, Chief Operating Officer, and Director	2009	2023	—
Non-Employee Directors:						—
Mark Anderson(2)(3)	III	59	Director	2019	2022	2025
Maria Eitel(2)	II	59	Director	2018	2024	—
Carl Ledbetter(1)(2)(3)	III	72	Director	2009	2022	2025
Stanley Meresman(1)(4)	III	75	Director	2018	2022	—
Scott Sandell(2)	I	57	Lead Independent Director	2010	2023	—
Katrin Suder(1)	II	50	Director	2019	2024	—
New Director Nominees:
Mark Hawkins(5)	III	62	Director Nominee	—	—	2025

_______________________

(1)Member of the audit committee.

(2)Member of the compensation committee.

(3)Member of the nominating and corporate governance committee.

(4)Mr. Meresman's current term will expire at the Annual Meeting. Our Board of Directors thanks Mr. Meresman for his distinguished service as a director and as Chair of the audit committee.

(5)In March 2022, our Board of Directors, at the recommendation of the nominating and corporate governance committee, nominated Mr. Hawkins to be elected as a member of our Board of Directors at the Annual Meeting. Contingent and effective upon his election to our Board of Directors, Mr. Hawkins will be appointed to serve as a member and Chair of the audit committee.

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Our Board of Directors believes that directors who provide a significant breadth of experience, knowledge, education, and abilities in areas relevant to our business, while also representing a diversity of race, ethnicity, LGBTQ status, gender, age, geography, and other individual qualities and attributes contribute to a well-balanced and effective board. The metrics of our Board of Directors anticipated following the Annual Meeting are highlighted in the following graphic.

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Information Concerning Director Nominees

Mark Anderson. Mr. Anderson has served as a member of our Board of Directors and our nominating and corporate governance committee since August 2019 and as a member of our compensation committee since January 2021. Mr. Anderson has served as the CEO of Alteryx, Inc., a software company, since October 2020. He served as a consultant for Anaplan, Inc., a software company, from February 2020 until October 2020 and as Chief Growth Officer at Anaplan, Inc. from August 2019 until February 2020. Mr. Anderson was previously with Palo Alto Networks, Inc., a cybersecurity company, where he served as President from August 2016 to October 2018, Executive Vice President, Worldwide Field Operations from May 2016 to August 2016, and Senior Vice President, Worldwide Field Operations from June 2012 to May 2016. From October 2004 to May 2012, Mr. Anderson was with F5 Networks, Inc., an IT infrastructure company, where he served in several management roles, including as Executive Vice President of Worldwide Sales. Mr. Anderson currently serves on the board of directors of Alteryx, Inc. He holds a B.A. in Business and Economics from York University.

Mr. Anderson was selected to serve on our Board of Directors due to his experience as an officer and director of publicly traded companies, his background in networking and cybersecurity, and his extensive experience as a sales executive in the technology industry.

Mark Hawkins. Mr. Hawkins served as President and CFO Emeritus Advisor for Salesforce.com, Inc., a software company, from February 2021 to November 2021. Prior to that, he served as President and Chief Financial Officer and Principal Financial Officer of Salesforce.com, Inc. from August 2017 to January 2021, and as the Chief Financial Officer, Principal Financial Officer and Executive Vice President from August 2014 to August 2017. From April 2009 to July 2014, Mr. Hawkins served as Executive Vice President, Chief Financial Officer, and Principal Financial Officer of Autodesk, Inc., a design software and services company. Mr. Hawkins previously served as Chief Financial Officer and Senior Vice President of Finance and Information Technology at Logitech International S.A., a global hardware company, from April 2006 to April 2009. Mr. Hawkins currently serves on the board of directors and audit committees of Toast, Inc., a software company, and SecureWorks Corp., a global cybersecurity company. He holds a B.A. in Operations Management from Michigan State University and an M.B.A from University of Colorado. He also completed the Advanced Management Program at Harvard Business School.

Mr. Hawkins is being nominated to serve on our Board of Directors due to his experience as an officer and director of publicly traded software and technology companies and his financial expertise in the technology industry.

Carl Ledbetter. Dr. Ledbetter has served as a member of our Board of Directors since November 2009, as a member of our audit committee since December 2018, as Chair of our nominating and corporate governance committee since August 2019, and as a member of our compensation committee since March 2021. Dr. Ledbetter has served as the Chairman and CTO of SimpleRose, Inc., a software company, since July 2018 and as CEO since August 2019. He served as a Managing Director of Pelion Venture Partners, a venture capital firm, from June 2003 through June 2018 and as a Special Advisor from June 2018 until December 2019. Dr. Ledbetter has served on the boards of directors of four other public companies and more than thirty privately-held companies during his career. Dr. Ledbetter holds a B.S. in Mathematics from the University of Redlands, an M.S. in Mathematics from Brandeis University, and a Ph.D. in Mathematics from Clark University.

Dr. Ledbetter was selected to serve on our Board of Directors because of his understanding of networking technology and his experience as a director of several technology companies.

Information Concerning Directors Not Standing for Election at the Annual Meeting

Continuing Directors

Maria Eitel. Ms. Eitel has served on our Board of Directors since December 2018 and as Chair of our compensation committee since February 2019. From September 2015 until May 2021, Ms. Eitel served as the Co-Chair of the Nike Foundation, a non-profit organization funded by NIKE, Inc., and Chair of Girl Effect, an independent non-profit organization she founded with the goal of transforming the lives of adolescent girls. She served as the Founder, CEO, and President of the Nike Foundation from March 2005 to September 2015. From January 1998 to March 2005, Ms. Eitel was the first Vice President, Corporate Responsibility of NIKE, a designer, developer, and seller of athletic footwear, apparel, equipment, accessories, and services. Ms. Eitel holds a B.A. in Humanistic Studies from McGill University, an M.S. in Foreign Service from Georgetown University, and an Honorary Doctorate of Humane Letters from Babson College.

Ms. Eitel was selected to serve on our Board of Directors because of the perspective and experience she brings from her role as an executive of a publicly traded company and from her background in corporate social responsibility.

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Matthew Prince. Mr. Prince is one of our Co-Founders and has served as our Chief Executive Officer and Chair of our Board of Directors since July 2009. He also co-founded Unspam Technologies, Inc., a software and services company, and has served as its chair since December 2001. Mr. Prince holds a B.A. in English and a minor in Computer Science from Trinity College-Hartford, a J.D. from the University of Chicago Law School, and an M.B.A. from Harvard Business School.

Mr. Prince was selected to serve on our Board of Directors because of the perspective and experience he brings as our Chief Executive Officer and as one of our Co-Founders.

Scott Sandell. Mr. Sandell has served as a member of our Board of Directors since November 2010, as a member of our compensation committee since February 2019, and as our Lead Independent Director since September 2019. He has served as Managing General Partner of New Enterprise Associates, Inc. (NEA), a venture capital firm, since April 2017, Co-Managing General Partner from March 2015 to April 2017, and as a General Partner since September 2000. Mr. Sandell joined NEA in January 1996 and served as head of the firm’s technology investing practice for 10 years. He currently serves on the boards of directors of Bloom Energy Corporation, a provider of solid-oxide fuel cell systems, Coursera, Inc., an online learning platform, Robinhood Markets, Inc., a financial technology company, Tuya, Inc., an IoT development platform service provider, and several privately-held companies. Mr. Sandell previously served on the board of directors of Fusion-io, Inc., a computer hardware and software systems company acquired by SanDisk Corporation, Tableau Software, Inc., a software company, Workday, Inc., a provider of on-demand financial management and human capital management software, and Spreadtrum Communications, Inc., a semiconductor company acquired by Tsinghua Unigroup. Mr. Sandell holds an A.B. in Engineering from Dartmouth College and an M.B.A. from Stanford University.

Mr. Sandell was selected to serve on our Board of Directors because of his leadership experience and experience as a director of both publicly and privately held technology companies.

Katrin Suder. Dr. Suder has served as a member of our Board of Directors and as a member of our audit committee since August 2019. Dr. Suder has served as Chairperson of the Advisory Council on Digitalization to the German Federal Government since August 2018. She has also been an industrial advisor to EQT, a private equity firm, since October 2018, and a partner at Macro Advisory Partners, a strategic advisory firm, since January 2019. From August 2014 until April 2018, Dr. Suder served as State Secretary for the German Federal Ministry of Defense. From October 2000 to July 2014, she was with McKinsey & Company, a management consulting company, where she managed the German Public Sector Practice from 2010 to 2014. Dr. Suder currently serves on the supervisory boards of several private European companies. Dr. Suder holds a B.A. in German Literature and Theater and a Ph.D. in Computational Neuroscience from Ruhr University Bochum.

Dr. Suder was selected to serve on our Board of Directors because of her experience at the intersection of technology, business, and policy.

Michelle Zatlyn. Ms. Zatlyn is one of our Co-Founders and serves as our President and Chief Operating Officer. She served as our Head of User Experience from 2009 until she was appointed as our Chief Operating Officer in 2016 and President in 2020. Ms. Zatlyn has served as a member of our Board of Directors since November 2009. Ms. Zatlyn currently serves on the board of directors and the audit committee of Atlassian Corporation, Plc. She holds a B.Sc. in Chemistry and Business from McGill University and an M.B.A. from Harvard Business School.

Ms. Zatlyn was selected to serve on our Board of Directors because of the perspective and experience she brings as our President and Chief Operating Officer and as one of our Co-Founders.

Non-Continuing Director

Stanley Meresman. Mr. Meresman has served on our Board of Directors since December 2018 and as Chair of our audit committee since December 2018. During the last 10 years, he has served on the boards of directors of various public and private companies, including service as chair of the audit committee for certain of these companies. Mr. Meresman previously served as a Venture Partner with Technology Crossover Ventures, a private equity firm, from January 2004 through December 2004, and as its General Partner and Chief Operating Officer from November 2001 to December 2003. He currently serves on the boards of directors, and as chair of the audit committees, of DoorDash, Inc., a technology-enabled logistics company, Guardant Health, Inc., a precision oncology company, and Snap Inc., a technology and camera company, and previously served as a member of the boards of directors, and chair of the audit committees, of Medallia, Inc., a customer experience management company, LinkedIn Corporation, a career-focused social networking site, Palo Alto Networks, Inc., a cybersecurity company, and Zynga Inc., a social gaming company. Mr. Meresman holds a B.S. in Industrial Engineering and Operations Research from the University of California, Berkeley and an M.B.A. from the Stanford Graduate School of Business.

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Mr. Meresman was selected to serve as a member of our Board of Directors because of his experience with networking technologies, financial expertise, and years of strategic and management experience in the technology industry.

Director Independence

Our Class A common stock is listed on the NYSE. Under the listing standards of the NYSE, independent directors must comprise a majority of a listed company's board of directors. In addition, the listing standards of the NYSE require that, subject to specified exceptions, each member of a listed company's audit, compensation, and nominating and corporate governance committees be independent. Under the listing standards of the NYSE, a director will only qualify as an "independent director" if the listed company’s board of directors affirmatively determines that the director does not have a material relationship with the company (either directly or as a partner, shareholder, or officer of an organization that has a relationship with the company). As noted in the commentary to the listing standards, the concern underlying these listing standards is independence from management.

Audit committee members must also satisfy the additional independence criteria set forth in Rule 10A-3 under the Exchange Act and the listing standards of the NYSE. Compensation committee members must also satisfy the additional independence criteria set forth in Rule 10C-1 under the Exchange Act and the listing standards of the NYSE.

Our Board of Directors has undertaken a review of the independence of each director and director nominee. Based on information provided by each director and director nominee concerning his or her background, employment, and affiliations, our Board of Directors has affirmatively determined that each of our directors, other than Mr. Prince and Ms. Zatlyn, and each new director nominee does not have any material relationship with our company and that each of these directors and director nominee is "independent" as that term is defined under the listing standards of the NYSE and the applicable rules and regulations of the SEC. In making these affirmative determinations, our Board of Directors considered the current and prior relationships that each non-employee director and director nominee has with our company and all other facts and circumstances our Board of Directors deemed relevant in determining the independence of the non-employee directors and director nominee, including the beneficial ownership of our capital stock by each non-employee director and director nominee, and the transactions involving them described in the section titled "Certain Relationships and Related Party Transactions."

There are no family relationships among any of our directors, director nominees, or executive officers.

Board Leadership Structure

Matthew Prince, our Co-Founder and Chief Executive Officer, serves as Chair of our Board of Directors, presides over meetings of our Board of Directors, and holds such other powers and carries out such other duties as are customarily carried out by the Chair of our Board of Directors. Our independent directors bring experience, oversight, and expertise from outside of our company, while Mr. Prince and Ms. Zatlyn each bring current company-specific experience, leadership, and insight as our Co-Founders and as Chief Executive Officer and President and Chief Operating Officer, respectively.

Our Board of Directors has adopted corporate governance guidelines that provide that one of our independent directors should serve as our Lead Independent Director if the Chair is not independent. Our Board of Directors has appointed Scott Sandell to serve as our Lead Independent Director. As Lead Independent Director, Mr. Sandell presides over periodic meetings of our independent directors, serves as a liaison between our Chair and our independent directors, and performs such additional duties as our Board of Directors may otherwise determine and delegate. The Board of Directors believes that our structure is appropriate and provides independent leadership and engagement from the Lead Independent Director, while providing the benefit of having our Chief Executive Officer, the individual with primary responsibility for managing the company’s day-to-day operations, chair regular Board of Directors meetings as key business and strategic issues are discussed.

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Board Meetings and Committees

During our fiscal year ended December 31, 2021, our Board of Directors held six meetings (including regularly scheduled and special meetings), and each director attended at least 75% of the aggregate of (i) the total number of meetings of our Board of Directors held during the period for which he or she had been a director and (ii) the total number of meetings held by all committees of our Board of Directors on which he or she served during the periods that he or she served, except Mr. Sandell whose attendance was below 75% due to a family emergency.

Although our corporate governance guidelines do not have a formal policy regarding attendance by members of our Board of Directors at annual meetings of stockholders, we encourage, but do not require, our directors to attend. All of our directors who then served on our Board of Directors virtually attended our 2021 annual meeting of our stockholders.

Our Board of Directors has established an audit committee, a compensation committee, and a nominating and corporate governance committee. The composition and responsibilities of each of the committees of our Board of Directors is described below. Members serve on these committees until their resignation or until otherwise determined by our Board of Directors.

Audit Committee

Our audit committee consists of Dr. Ledbetter, Mr. Meresman, and Dr. Suder, with Mr. Meresman serving as Chair. Mr. Meresman will continue to serve as Chair of the audit committee until his current term expires at the Annual Meeting. Contingent and effective upon the election of Mr. Hawkins to our Board of Directors, Mr. Hawkins has been appointed by our Board of Directors as a member and Chair of the audit committee. Each member of our audit committee, including our director nominee Mr. Hawkins, meets the requirements for independence under the listing standards of the NYSE and SEC rules and regulations. Each member of our audit committee, including our director nominee Mr. Hawkins, also meets the financial literacy and sophistication requirements of the listing standards of the NYSE. In addition, our Board of Directors has determined that each of Dr. Ledbetter, Mr. Hawkins, and Mr. Meresman is an "audit committee financial expert" within the meaning of Item 407(d) of Regulation S-K under the Securities Act of 1933, as amended (the Securities Act). Our audit committee is responsible for, among other things:

•selecting a qualified firm to serve as the independent registered public accounting firm to audit our financial statements;

•helping to ensure the independence and overseeing performance of the independent registered public accounting firm;

•reviewing and discussing the scope and results of the audit with the independent registered public accounting firm, and reviewing, with management and the independent registered public accounting firm, our interim and year-end operating results;

•reviewing our financial statements and our critical accounting policies and estimates;

•reviewing the adequacy and effectiveness of our internal controls;

•developing procedures for employees to submit concerns anonymously about questionable accounting, internal accounting controls, or audit matters;

•overseeing our policies on risk assessment and risk management;

•overseeing compliance with our code of business conduct and ethics;

•reviewing related party transactions;

•pre-approving all audit and all permissible non-audit services to be performed by the independent registered public accounting firm; and

•overseeing the adoption of new accounting standards.

No member of our audit committee may serve on the audit committee of more than three public companies, including Cloudflare, unless the Board of Directors determines that such simultaneous service would not impair the ability of such member to effectively serve on the audit committee and discloses such determination in accordance with the requirements of the NYSE. Our Board of Directors considered Mr. Meresman’s simultaneous service on the audit committees of Cloudflare and three other public companies and determined that such simultaneous service did not impair his ability to effectively serve as a member and Chair of our audit committee.

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Our audit committee operates under a written charter that satisfies the applicable rules and regulations of the SEC and the listing standards of the NYSE. A copy of the charter of our audit committee is available on our website at https://cloudflare.NET.

Our audit committee held nine meetings during the fiscal year ended December 31, 2021.

Compensation Committee

Our compensation committee consists of Mr. Anderson, Ms. Eitel, Dr. Ledbetter, and Mr. Sandell, with Ms. Eitel serving as Chair. Each member of our compensation committee meets the requirements for independence under the listing standards of the NYSE and SEC rules and regulations. Each member of our compensation committee is also a non-employee director, as defined pursuant to Rule 16b-3 promulgated under the Exchange Act. Our compensation committee is responsible for, among other things:

•making recommendations to our Board of Directors regarding the compensation of our executive officers, including our Chief Executive Officer and our President and Chief Operating Officer;

•administering our equity compensation plans;

•reviewing, approving, and administering incentive compensation and equity compensation plans;

•reviewing and approving our overall compensation philosophy; and

•making recommendations regarding non-employee director compensation to our full Board of Directors.

Our compensation committee has engaged an independent consultant, Compensia, Inc. (Compensia), to advise the compensation committee on an as-needed basis with respect to executive and non-employee director compensation matters, including the compensation committee’s review and consideration of the performance equity awards granted to our Co-Founders, Mr. Prince and Ms. Zatlyn. Compensia reports directly to the compensation committee and does not provide services to company management. For more information on the processes and procedures followed by the compensation committee for the consideration and determination of executive compensation, see the section titled “Compensation Discussion and Analysis.”

In addition, in connection with the compensation committee’s review and consideration of the performance equity awards granted to our Co-Founders, Mr. Prince and Ms. Zatlyn, the compensation committee engaged as its independent counsel, Potter Anderson & Corroon LLP (Potter Anderson), to advise the compensation committee with respect to such matters. For more information on the processes and procedures followed by the compensation committee related to the consideration and determination of executive compensation, see the section titled “Proposal Four: Approval of the Performance Awards to Our Co-Founders.”

Our compensation committee operates under a written charter that satisfies the applicable rules and regulations of the SEC and the listing standards of the NYSE. A copy of the charter of our compensation committee is available on our website at https://cloudflare.NET.

Our compensation committee held 22 meetings during the fiscal year ended December 31, 2021.

Nominating and Corporate Governance Committee

Our nominating and corporate governance committee consists of Mr. Anderson and Dr. Ledbetter, with Dr. Ledbetter serving as Chair. Each member of our nominating and corporate governance committee meets the requirements for independence under the listing standards of the NYSE and SEC rules and regulations. Our nominating and corporate governance committee is responsible for, among other things:

•identifying, evaluating, and selecting, or making recommendations to our Board of Directors regarding, nominees for election to our Board of Directors and its committees;

•overseeing the evaluation of the performance of our Board of Directors and of individual directors;

•considering and making recommendations to our Board of Directors regarding the composition of our Board of Directors and its committees;

•overseeing our corporate governance practices;

•contributing to succession planning; and

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•developing and making recommendations to our Board of Directors regarding corporate governance guidelines and matters.

Our nominating and corporate governance committee operates under a written charter that satisfies the applicable listing standards of the NYSE. A copy of the charter of our nominating and corporate governance committee is available on our website at https://cloudflare.NET.

Our nominating and corporate governance committee held three meetings during the fiscal year ended December 31, 2021.

Compensation Committee Interlocks and Insider Participation

During 2021, Mr. Anderson, Ms. Eitel, Dr. Ledbetter, and Mr. Sandell served as members of our compensation committee. None of the members of our compensation committee is or has been an officer or employee of our company. None of our executive officers currently serves, or in the past fiscal year has served, as a member of the board or compensation committee (or other board committee performing equivalent functions) of any entity that has one or more of its executive officers serving on our Board of Directors or compensation committee. See the section titled "Certain Relationships and Related Party Transactions" for information about related party transactions involving members of our compensation committee or their affiliates.

Executive Sessions of Non-Employee Directors

To encourage and enhance communication among non-employee directors, and as required under applicable NYSE rules, our corporate governance guidelines provide that the non-employee directors will meet in executive sessions without management directors or management present on a periodic basis but no less than twice per year. Such executive sessions will be led by independent directors. In addition, if any of our non-employee directors are not independent directors, then our independent directors will also meet in executive session on a periodic basis but not less than twice per year.

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Considerations in Evaluating Director Nominees

Identifying and Evaluating Director Nominees

Our Board of Directors has delegated to the nominating and corporate governance committee the responsibility of identifying suitable candidates for nomination to the Board of Directors (including candidates to fill any vacancies that may occur) and assessing their qualifications in light of the policies and principles in our corporate governance guidelines and the committee's charter. The nominating and corporate governance committee may gather information about the candidates through interviews, detailed questionnaires, comprehensive background checks, or any other means that the nominating and corporate governance committee deems to be appropriate in the evaluation process. The nominating and corporate governance committee then meets to discuss and evaluate the qualities and skills of each candidate, both on an individual basis and taking into account the overall composition and needs of the Board of Directors based on feedback collected through annual performance self-evaluations and skills assessments completed by our directors. Based on the results of the evaluation process, the nominating and corporate governance committee recommends candidates to the Board of Directors for its approval as director nominees for election to the Board of Directors.

Director Qualifications

Our nominating and corporate governance committee uses a variety of methods for identifying and evaluating potential director nominees and will consider all facts and circumstances that it deems appropriate or advisable. In its identification and evaluation of director candidates, including current directors eligible for re-election, our nominating and corporate governance committee will consider the current size and composition of our Board of Directors and the needs of our Board of Directors and the respective committees of our Board of Directors. Some of the qualifications that our nominating and corporate governance committee considers include, without limitation, issues of character, ethics, integrity, judgment, diversity of experience, independence, skills, education, expertise, business acumen, length of service, understanding of our business and industry, potential conflicts of interest, and other commitments, including service on other public company boards of directors and related committees. Nominees must also have proven achievement and competence in their field, the ability to offer advice and guidance to our management team, the ability to make significant contributions to our success, and an understanding of the fiduciary responsibilities that are required of a director. Director candidates must have sufficient time available in the judgment of our nominating and corporate governance committee to perform all board and committee responsibilities. Members of our Board of Directors are expected to prepare for, attend, and participate in all Board of Directors and applicable committee meetings. Other than the foregoing, there are no stated minimum criteria for director nominees, although our nominating and corporate governance committee may also consider such other factors as it may deem, from time to time, are in our and our stockholders' best interests.

Although our Board of Directors does not maintain a specific policy with respect to board diversity, our Board of Directors believes that our Board of Directors should be a diverse body. In evaluating director candidates, including members of our Board of Directors eligible for re-election, our nominating and corporate governance committee considers factors including, without limitation, issues of character, integrity, judgment, independence, length of service, potential conflicts of interest, other commitments and diversity, and with respect to diversity, such factors as gender, race, ethnicity, LGBTQ status, age, professional background, experience, perspective and area of expertise as well as other individual qualities and attributes that contribute to the total diversity of viewpoints and experience represented on our Board of Directors. Nominees must also have the highest personal and professional ethics and integrity and the ability to assist and support our management team based on proven achievement and leadership in the companies or institutions with which they are affiliated. Director candidates must understand the fiduciary responsibilities that are required of a member of our Board of Directors and have sufficient time available in the judgment of our nominating and corporate governance committee to diligently perform all Board of Directors and committee responsibilities.

Our nominating and corporate governance committee also considers these and other factors as it oversees the annual board and committee evaluations. After completing its review and evaluation of director candidates, our nominating and corporate governance committee recommends to our full Board of Directors the director nominees for selection.

The foregoing considerations were all applied by the nominating and corporate governance committee during a thorough process to recruit a suitable candidate to stand for election to our Board of Directors. As a result of that process, the nominating and corporate governance committee recommended, and our Board of Directors decided to nominate, Mr. Hawkins as a candidate for election and each of Mr. Anderson and Dr. Ledbetter as candidates for re-election at the upcoming Annual Meeting.

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Stockholder Recommendations and Nominations to the Board of Directors

Our nominating and corporate governance committee will consider director candidates recommended by stockholders holding at least one percent (1%) of our fully diluted capitalization continuously for at least 12 months prior to the date of the submission of the recommendation, so long as such recommendations comply with our amended and restated certificate of incorporation, amended and restated bylaws, and applicable laws, rules and regulations, including those promulgated by the SEC. Our nominating and corporate governance committee will evaluate such recommendations in accordance with its charter, our amended and restated bylaws, and our policies and procedures for director candidates, as well as the regular director nominee criteria described above. This process is designed to ensure that our Board of Directors includes members with diverse backgrounds, skills, and experience, including appropriate financial and other expertise relevant to our business. Eligible stockholders wishing to recommend a candidate for nomination should contact our Secretary in writing. Such recommendations must include information about the candidate, information regarding any relationships between the candidate and Cloudflare, a statement of support by the recommending stockholder, evidence of the recommending stockholder’s ownership of our capital stock, a signed letter from the candidate confirming willingness to serve on our Board of Directors, and any additional information required by our amended and restated bylaws. Our nominating and corporate governance committee has discretion to decide which individuals to recommend for nomination as directors.

Under our amended and restated bylaws, stockholders may also directly nominate persons for our Board of Directors. Any nomination must comply with the requirements set forth in our amended and restated bylaws and should be sent in writing to our Secretary at Cloudflare, Inc., 101 Townsend Street, San Francisco, California 94107. To be timely for the 2023 annual meeting of stockholders, nominations must be received by our Secretary observing the same deadlines for stockholder proposals discussed above under “General Information—What is the deadline to propose actions for consideration at next year’s annual meeting of stockholders or to nominate individuals to serve as directors?”

Communications with Our Board of Directors

Interested parties wishing to communicate with non-management members of our Board of Directors may do so by writing and mailing the correspondence to our Secretary at Cloudflare, Inc., 101 Townsend Street, San Francisco, California 94107. Each communication should set forth (i) the name and address of the sender and (ii) the class and number of shares of our common stock, if any, that are owned of record or beneficially owned by the sender.

Our Secretary or legal department, in consultation with appropriate members of our Board of Directors as necessary, will review all incoming stockholder communications and, if appropriate, such communications will be forwarded to the appropriate member or members of our Board of Directors, or if none is specified, to the Lead Independent Director.

Corporate Governance Guidelines and Code of Business Conduct and Ethics

Our Board of Directors has adopted corporate governance guidelines that address items such as the qualifications and responsibilities of our directors and director candidates and corporate governance policies and standards applicable to us in general. In addition, our Board of Directors has adopted a code of business conduct and ethics that applies to all of our employees, officers, and directors, including our Chief Executive Officer, President and Chief Operating Officer, Chief Financial Officer, and other executive and senior financial officers. The full text of our corporate governance guidelines and our code of business conduct and ethics is posted on our website at https://cloudflare.NET. We intend to disclose any amendments to our code of business conduct and ethics, or waivers of its requirements, on our website, or in filings under the Exchange Act.

Role of Board in Risk Oversight

Risk is inherent with every business, and we face a number of risks, including strategic, financial, business and operational, cybersecurity, legal and compliance, and reputational. We have designed and implemented processes to manage these risks. Management is responsible for the day-to-day oversight and management of risks our company faces, while our Board of Directors, as a whole and assisted by its committees, has responsibility for the oversight of risk management. In its risk oversight role, our Board of Directors has the responsibility to satisfy itself that the risk management processes designed and implemented by management are appropriate and functioning as designed.

Our Board of Directors believes that open communication between management and our Board of Directors is essential for effective risk management and oversight. Consistent with this approach, our Board of Directors, with the assistance of its committees, regularly reviews our strategic and operational risks in the context of discussions with management, question and answer sessions, and reports from the management team at each of its regular meetings. Directors also have access to management outside of its regular meetings and are free to ask any questions and receive all information necessary to perform

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their duties as a director. Our Board of Directors also receives regular reports on all significant committee activities at each of its regular meetings, and evaluates the risks inherent in significant transactions.

While our Board of Directors ultimately is responsible for risk oversight, the committees of our Board of Directors assist it in fulfilling its oversight responsibilities in certain areas of risk. For example, our audit committee assists our Board of Directors in fulfilling its oversight responsibilities with respect to risk management in the areas of internal control over financial reporting and disclosure controls and procedures, legal and regulatory compliance, and cybersecurity, and discusses with management, our internal audit function, and the independent auditor guidelines and policies with respect to risk assessment and risk management. Our audit committee also reviews our major financial risk exposures and the steps management has taken to monitor and control these exposures. Our nominating and corporate governance committee assists our Board of Directors in fulfilling its oversight responsibilities with respect to the management of risk associated with board and committee organization, director independence, conflicts of interest, corporate social responsibility and sustainability programs, and corporate governance. Our compensation committee assesses risks created by the incentives inherent in our compensation policies by reviewing, in consultation with management and Compensia, our compensation committee's independent compensation consultant, our compensation plans, policies, and practices for named executive officers and other employees. These committees provide regular reports on our risk management efforts to the full Board of Directors.

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Non-Employee Director Compensation

We have adopted a compensation policy for our non-employee directors. Under this director compensation policy, each non-employee director receives the cash and equity compensation for his or her board services described below. We also reimburse our non-employee directors for reasonable, customary, and documented travel expenses to board and committee meetings. This policy was developed with input from Compensia regarding practices and compensation levels at comparable companies. We considered and discussed these recommendations and data, and considered the specific duties and committee responsibilities of particular directors. After careful consideration of this information and the scope of the duties and responsibilities of our non-employee directors, our Board of Directors adopted and our stockholders approved the director compensation policy. We review the director compensation policy annually, and we continue to believe this policy provides reasonable compensation to our non-employee directors that is commensurate with their contributions and appropriately aligned with our peers.

The policy includes a maximum annual limit of $750,000 of cash compensation and equity awards that may be paid, issued, or granted to a non-employee director in any fiscal year. For purposes of this limitation, the value of equity awards is based on the grant date fair value (determined in accordance with U.S. Generally Accepted Accounting Principles (GAAP)). Any cash compensation paid or equity awards granted to a person for his or her services as an employee, or for his or her services as a consultant (other than as a non-employee director), will not count for purposes of the limitation. The maximum limit does not reflect the intended size of any potential compensation or equity awards to our non-employee directors.

Cash Compensation

Under the director compensation policy, each non-employee director is paid an annual cash retainer of $30,000. In addition, non-employee directors are entitled to receive the following cash compensation for annual service in the following positions:


Chair of the audit committee	$	20,000
Member of the audit committee (other than Chair)	$	10,000
Chair of the compensation committee	$	12,000
Member of the compensation committee (other than Chair)	$	6,000
Chair of the nominating and corporate governance committee	$	7,500
Member of the nominating and corporate governance committee (other than Chair)	$	4,000

Each non-employee director who serves as a committee chair will receive only the additional annual cash fee as the chair of the committee, and not the additional annual fee as a member of the committee. All cash payments to non-employee directors are paid quarterly in arrears on a prorated basis.

Equity Compensation

Initial Award

Each person who first becomes a non-employee director will receive, on the first trading date on or after the date on which the person first becomes a non-employee director, an initial award of restricted stock units (RSUs) covering a number of shares of our Class A common stock having a grant date fair value (determined in accordance with GAAP) equal to $400,000, rounded down to the nearest whole share. This initial award will vest in equal annual installments on each of the first three anniversaries of the date of becoming a non-employee director, subject to continuing to provide services to us through each applicable vesting date. If the person was a member of our Board of Directors and also an employee, becoming a non-employee director due to termination of employment will not entitle the person to an initial award.

Annual Award

Each non-employee director who has completed at least six months of continuous service as a non-employee director automatically will receive, on the date of each annual meeting of our stockholders, an annual award of RSUs covering a number of shares of our Class A common stock having a grant date fair value (determined in accordance with GAAP) equal to $200,000, rounded down to the nearest whole share. Each annual award will vest on the earlier of (i) the one-year anniversary of the date the annual award is granted or (ii) the day prior to the date of the annual meeting of our stockholders that next follows the grant date of the annual award, subject to continuing to provide service to us through the applicable vesting date.

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Change in Control

In the event of a “change in control” (as defined in our 2019 Equity Incentive Plan (the 2019 Plan)), each non-employee director will fully vest in his or her outstanding company equity awards, provided that the non-employee director continues to be a non-employee director through the date of the change in control.

Non-Employee Director Compensation Table

The following table provides information regarding the total compensation that was earned by or paid to each of our non-employee directors for the year ended December 31, 2021. Directors who also serve as employees receive no additional compensation for their service as directors. During the fiscal year ended December 31, 2021, Mr. Prince, our Chief Executive Officer, and Ms. Zatlyn, our President and Chief Operating Officer, were each a member of our Board of Directors, as well as an employee, and thus received no additional compensation for his or her services as a director. See the section titled “Executive Compensation” for additional information regarding their compensation.


Name	Fees Earned or Paid in Cash($)	Stock Awards($)(1)(2)	Total($)
Mark Anderson(3)	39,667	199,967	239,634
Maria Eitel(4)	42,000	199,967	241,967
Carl Ledbetter	52,267	199,967	252,234
Stanley Meresman(5)	50,000	199,967	249,967
Scott Sandell	36,000	199,967	235,967
Katrin Suder(6)	40,000	199,967	239,967

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(1)The amounts reported represent the aggregate grant date fair value of the RSUs awarded under our 2019 Plan to our non-employee directors in accordance with the director compensation policy, calculated on the basis of the fair market value of the underlying shares of common stock on the grant date in accordance with FASB ASC Topic 718. Such grant date fair value does not take into account any estimated forfeitures related to service-vesting conditions. The assumptions used in calculating the grant date fair value of the RSUs reported in this column are set forth in the Notes to our Consolidated Financial Statements included in our 2021 Annual Report. These amounts do not necessarily correspond to the actual value recognized or that may be recognized by the directors.

(2)As of December 31, 2021, each non-employee director held 2,441 RSUs in connection with the annual award of RSUs granted to them on the date of our 2021 annual meeting of stockholders in accordance with our director compensation policy (the 2021 annual award). 100% of the shares of Class A common stock underlying these RSUs vest on the earlier of (i) June 3, 2022 or (ii) the day prior to the date of the Annual Meeting, subject to the director's continued service to us through the applicable vesting date.

(3)As of December 31, 2021, in addition to the 2021 annual award Mr. Anderson received, Mr. Anderson held 49,875 RSUs for shares of our Class B common stock in connection with his appointment to our Board of Directors in August 2019. The shares of Class B common stock underlying these RSUs vest in 16 quarterly installments following August 15, 2019.

(4)As of December 31, 2021, in addition to the 2021 annual award Ms. Eitel received, Ms. Eitel held 6,250 RSUs for shares of our Class B common stock that were granted in connection with her agreement to chair our compensation committee in July 2019. The shares of Class B common stock underlying these RSUs vest in 16 quarterly installments following February 15, 2019. In addition, Ms. Eitel was granted an option to purchase 110,000 shares of our Class B common stock in connection with her appointment to our Board of Directors in December 2018. The shares subject to the option are immediately exercisable and vest in 16 equal quarterly installments beginning on December 12, 2018. On March 18, 2019, Ms. Eitel early exercised the stock option in full. As of December 31, 2021, 27,500 of the shares received as a result of early exercising such option remained subject to our right of repurchase.

(5)As of December 31, 2021, in addition to the 2021 annual award Mr. Meresman received, Mr. Meresman held 56,000 shares of Class B common stock subject to options exercisable, of which 12,000 shares had fully vested, that was granted in connection with his appointment to our Board of Directors in December 2018. The shares subject to the option are immediately exercisable and vest in 16 equal quarterly installments beginning on December 12, 2018. Our

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Board of Directors has approved the vesting acceleration of 33,000 shares of Class B common stock underlying the option (the remaining unvested shares as of June 1, 2022), effective immediately prior to the Annual Meeting.

(6)As of December 31, 2021, in addition to the 2021 annual award Dr. Suder received, Dr. Suder held 52,500 RSUs for shares of our Class B common stock in connection with her appointment to our Board of Directors in August 2019. The shares of Class B common stock underlying these RSUs vest in 16 quarterly installments following August 15, 2019.

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PROPOSAL ONE:

ELECTION OF DIRECTORS

Number of Directors; Board Structure

Our Board of Directors is comprised of eight members. In accordance with our amended and restated certificate of incorporation, our Board of Directors is divided into three staggered classes of directors. One class is elected each year during the annual meeting of stockholders for a term of three years. The term of the Class III directors expires at the Annual Meeting, the term of the Class I directors expires at the 2023 annual meeting of stockholders, and the term of the Class II directors expires at the 2024 annual meeting of stockholders. After their initial terms expire, directors are expected to be elected to hold office for three-year terms and until their successors have been duly elected and qualified, subject to their earlier death, resignation, or removal.

Nominees

Our Class III directors, whose terms will expire at the Annual Meeting, are Mark Anderson, Carl Ledbetter, and Stan Meresman. Our nominating and corporate governance committee has recommended, and our Board of Directors has approved, Mark Anderson, Mark Hawkins, and Carl Ledbetter as nominees for election as Class III directors in the Annual Meeting. If elected, each of Mr. Anderson, Mr. Hawkins, and Dr. Ledbetter will serve as Class III directors until the 2025 annual meeting of stockholders and until their successors are duly elected and qualified, subject to their earlier death, resignation, or removal. Each of Mr. Anderson and Dr. Ledbetter is a current Class III director and member of our Board of Directors. Mr. Meresman's current term will expire at the Annual Meeting. Our Board of Directors thanks Mr. Meresman for his distinguished service as a director and Chair of the audit committee. For information concerning the nominees, please see “Board of Directors and Corporate Governance.”

If you are a stockholder of record and you sign your proxy card or vote by telephone or over the Internet but do not give instructions with respect to the voting of directors, your shares will be voted “FOR” the election of Mr. Anderson, Mr. Hawkins, and Dr. Ledbetter. We expect that each of Mr. Anderson, Mr. Hawkins, and Dr. Ledbetter will accept such nomination; however, in the event that a director nominee is unable or declines to serve as a director at the time of the Annual Meeting, the proxies will be voted for any nominee designated by our Board of Directors to fill such vacancy. If you are a street name stockholder and you do not give voting instructions to your broker, bank, or other nominee, your broker, bank, or other nominee will leave your shares unvoted on this matter.

Vote Required

The election of directors requires a plurality of the voting power of the shares of our common stock present virtually or by proxy during the Annual Meeting and entitled to vote thereon to be approved. Any shares not voted “FOR” a particular nominee (whether as a result of stockholder abstention or a broker non-vote) will not be counted in such nominee’s favor and will have no effect on this proposal.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE NOMINEES NAMED ABOVE.

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PROPOSAL TWO:

RATIFICATION OF APPOINTMENT OF

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Our audit committee has appointed KPMG LLP (KPMG) as our independent registered public accounting firm to perform the audit of our consolidated financial statements for the fiscal year ending December 31, 2022, and we are asking you and our other stockholders to ratify this appointment. KPMG has served as our independent registered public accounting firm since 2014.

Our Board of Directors is submitting the appointment of KPMG to our stockholders because we value our stockholders’ views on our independent registered public accounting firm and as a matter of good corporate governance. Notwithstanding the appointment of KPMG, and even if our stockholders ratify the appointment, our audit committee, in its discretion, may appoint another independent registered public accounting firm at any time during our fiscal year if our audit committee believes that such a change would be in the best interests of our company and our stockholders. If our stockholders do not ratify the appointment of KPMG, our audit committee may reconsider the appointment. Representatives of KPMG will be present during the Annual Meeting, and they will have an opportunity to make a statement and will be available to respond to appropriate questions from our stockholders.

Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Registered Public Accounting Firm

We have adopted a policy under which our audit committee must pre-approve all audit and permissible non-audit services to be provided by the independent registered public accounting firm. As part of its review, our audit committee also considers whether the categories of pre-approved services are consistent with the rules on accountant independence of the SEC and the PCAOB. Our audit committee has pre-approved all services performed by KPMG during fiscal year 2021 in accordance with the pre-approval policy.

Fees Paid to the Independent Registered Public Accounting Firm

The following table presents fees for professional audit services and other services rendered to our company by KPMG for our fiscal years ended December 31, 2021 and 2020.


Fee Category	Fiscal 2021		Fiscal 2020
Audit Fees(1)	$	3,301,838	$	2,968,782
Audit-Related Fees(2)	$	70,614	$	80,000
Tax Fees(3)	$	304,774	$	307,163
All Other Fees	—		—
Total Fees	$	3,677,226	$	3,355,945

_______________________

(1)Audit Fees consist of fees for professional services provided in connection with the audit of our consolidated financial statements, reviews of our quarterly condensed consolidated financial statements, related accounting consultations, and statutory audits of our international subsidiaries.

(2)Audit-Related Fees consist primarily of fees for assurance and related services that are reasonably related to the performance of the audit or review of our consolidated financial statements and not reported under “Audit Fees.”

(3)Tax Fees consist of fees for professional services for tax compliance, tax advice, and tax planning. These services include consultation on tax matters and assistance regarding federal, state, and international tax compliance.

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Auditor Independence

In our fiscal year ended December 31, 2021, there were no other professional services provided by KPMG, other than those listed above, that would have required our audit committee to consider their compatibility with maintaining the independence of KPMG.

Vote Required

The ratification of the appointment of KPMG as our independent registered public accounting firm for our fiscal year ending December 31, 2022 requires the affirmative vote of a majority of the voting power of the shares of our common stock present virtually or by proxy during the Annual Meeting and entitled to vote thereon. Abstentions will have the effect of a vote against this proposal, and broker non-votes will have no effect.

THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE RATIFICATION OF THE APPOINTMENT OF KPMG LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING DECEMBER 31, 2022.

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REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS

The audit committee is a committee of our Board of Directors comprised solely of independent directors as required by the listing standards of the NYSE and rules and regulations of the SEC. The audit committee operates under a written charter approved by our Board of Directors, which is available on our website at https://cloudflare.NET. The composition of the audit committee, the attributes of its members, and the responsibilities of the audit committee, as reflected in its charter, are intended to be in accordance with applicable requirements for corporate audit committees. The audit committee reviews and assesses the adequacy of its charter and the audit committee's performance on an annual basis.

With respect to our financial reporting process, our management is responsible for (1) establishing and maintaining internal controls and (2) preparing our consolidated financial statements. Our independent registered public accounting firm, KPMG, is responsible for performing an independent audit of our consolidated financial statements. It is the responsibility of the audit committee to oversee these activities. It is not the responsibility of the audit committee to prepare our financial statements. These are the fundamental responsibilities of management. In the performance of its oversight function, the audit committee has:

•reviewed and discussed the audited financial statements with management and KPMG;

•discussed with KPMG the matters required to be discussed by the applicable requirements of the PCAOB and the SEC; and

•received the written disclosures and the letter from KPMG required by applicable requirements of the PCAOB regarding the independent accountant's communications with the audit committee concerning independence, and has discussed with KPMG its independence.

Based on the audit committee's review and discussions with management and KPMG, the audit committee recommended to the Board of Directors that the audited financial statements be included in the Annual Report on Form 10-K for the fiscal year ended December 31, 2021 for filing with the SEC.

Respectfully submitted by the members of the audit committee of our Board of Directors:

Stanley Meresman (Chair)

Carl Ledbetter

Katrin Suder

This report of the audit committee is required by the SEC and, in accordance with the SEC's rules, will not be deemed to be part of or incorporated by reference by any general statement incorporating by reference this Proxy Statement into any filing under the Securities Act or under the Exchange Act, except to the extent that we specifically incorporate this information by reference, and this report and the information contained therein will not otherwise be deemed "soliciting material" or "filed" under either the Securities Act or the Exchange Act or be subject to Regulation 14A or Regulation 14C (other than as provided in Item 407 of Regulation S-K) or to the liabilities of Section 18 of the Exchange Act.

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PROPOSAL THREE:

ADVISORY VOTE TO APPROVE THE

COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS

In accordance with the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the Dodd-Frank Act) and SEC rules, we are providing our stockholders with the opportunity to vote to approve, on an advisory and non-binding basis, the compensation of our named executive officers as disclosed in this Proxy Statement. This proposal, commonly known as a “Say-on-Pay” proposal, gives our stockholders the opportunity to express their views on our named executive officers’ compensation as a whole. This vote is not intended to address any specific item of compensation or any specific named executive officer, but rather the overall compensation of all of our named executive officers and the philosophy, policies, and practices described in this Proxy Statement. For a discussion of who our “named executive officers” are, see the section titled “Executive Compensation—Compensation Discussion and Analysis.”

The Say-on-Pay vote is advisory, and therefore is not binding on us, our compensation committee, or our Board of Directors. The Say-on-Pay vote will, however, provide information to us regarding investor sentiment about our executive compensation philosophy, policies, and practices, which our compensation committee will be able to consider when determining executive compensation for the remainder of the current fiscal year and beyond. Our Board of Directors and our compensation committee value the opinions of our stockholders. To the extent there is any significant vote against the compensation of our named executive officers as disclosed in this Proxy Statement, we will endeavor to communicate with stockholders to better understand the concerns that influenced the vote and consider our stockholders’ concerns, and our compensation committee will evaluate whether any actions are necessary to address those concerns.

You are encouraged to review the section titled “Executive Compensation” and, in particular, the section titled “Executive Compensation—Compensation Discussion and Analysis” in this Proxy Statement, which provide a comprehensive review of our executive compensation program and its elements, objectives, and rationale. We believe that the information provided in the section titled “Executive Compensation,” and in particular the information discussed in the section titled “Executive Compensation—Executive Compensation Philosophy and Objectives,” demonstrates that our executive compensation program was designed appropriately and is working to ensure management’s interests are aligned with our stockholders’ interests to support long-term value creation. Accordingly, we ask our stockholders to vote “FOR” the following non-binding resolution at the Annual Meeting:

“RESOLVED, that the stockholders approve, on an advisory basis, the compensation paid to our named executive officers, as disclosed in the Proxy Statement for the Annual Meeting pursuant to the compensation disclosure rules of the SEC, including the compensation discussion and analysis, compensation tables and narrative discussion, and other related disclosure.”

Vote Required

The approval, on an advisory basis, of the compensation of our named executive officers, requires the affirmative vote of a majority of the voting power of the shares of our common stock present virtually or by proxy at the Annual Meeting and entitled to vote thereon to be approved. Abstentions will have the effect of a vote against this proposal, and broker non-votes will have no effect on the outcome of this proposal.

As an advisory vote, the result of this proposal is non-binding. Although the vote is non-binding, our Board of Directors and our compensation committee value the opinions of our stockholders and will consider the outcome of the vote when making future compensation decisions for our named executive officers.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE APPROVAL, ON AN ADVISORY BASIS, OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS.

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PROPOSAL FOUR:

APPROVAL OF THE PERFORMANCE AWARDS TO OUR CO-FOUNDERS

On December 22, 2021 (the Grant Date), the compensation committee of our Board of Directors (the compensation committee) granted to each of Matthew Prince, our Chief Executive Officer (CEO) and Michelle Zatlyn, our President and Chief Operating Officer (each, a Co-Founder), a 10-year performance-based stock option to purchase shares of our Class A common stock that vests and becomes exercisable only if we achieve certain stock price milestones and the Co-Founder continues to remain in a primary leadership position with us (the Performance Awards). The Performance Awards are designed to provide to the Co-Founders incentives linked to significant long-term stockholder value creation.

The compensation committee’s primary objective in designing the Performance Awards is to help us continue to grow our business, improve our financial and operating performance, and pursue our mission to help build a better Internet, all of which would facilitate the creation of extraordinary stockholder value. There are a variety of key reasons why the Board of Directors recommends that stockholders (including our Disinterested Stockholders (as defined herein)) approve the Performance Awards, including to:

1.Strengthen each Co-Founder’s incentives to achieve extraordinary stock price performance and further align each Co-Founder’s interests with those of our Disinterested Stockholders.

2.Encourage our Co-Founders’ continuation in primary leadership positions with us, and provide them with challenging incentives to keep them fully focused and engaged on the continued growth of our business for the long-term.

3.Promote continued inspiration for innovation over the long-term and serve as a catalyst for the achievement of our long-term strategic and financial objectives, including to grow our company into one of the world’s key technology companies, with our stock price performance acting as the key indicator of such achievement.

Our Disinterested Stockholders are being asked to approve the Performance Awards at the Annual Meeting. The Performance Awards will be immediately and automatically forfeited following the Annual Meeting if the Disinterested Stockholders vote on the Performance Awards, but a majority of the voting power held by the Disinterested Stockholders do not approve them. If the Performance Awards are not submitted to a vote of the Disinterested Stockholders at the Annual Meeting, the Performance Awards would be immediately and automatically forfeited if a majority of voting power of the Disinterested Stockholders do not approve the Performance Awards by December 22, 2022, the one-year anniversary of the Grant Date.

If the Performance Awards are not approved by a majority of the voting power held by the Disinterested Stockholders and are forfeited, we will not have the benefit of the strong incentives that the Performance Awards are intended to provide to the Co-Founders to achieve extraordinary stock price performance, and we may need to consider alternative compensation structures for the Co-Founders to achieve the objectives for which the Performance Awards were designed.

The Performance Awards were granted under the 2019 Plan from its existing share reserve, and the compensation committee approved stock option agreements to make the Performance Awards (the Performance Award Agreement). The full text of the form of Performance Award Agreement is included as Exhibit 10.1 to our Form 8-K that was filed with the SEC on December 27, 2021, and such Exhibit 10.1 is incorporated by reference hereto. However, the requirements related to the approval of the Performance Awards has been modified to apply as described in this Proposal.

In addition, effective as of February 14, 2022, our other named executive officers and certain other key employees were awarded performance-based option grants under the 2019 Plan on substantially similar terms to the Performance Awards, except as described below (such awards, the Non-Founder Performance Awards). We are not seeking stockholder approval of the Non-Founder Performance Awards, and they will remain outstanding in accordance with their terms regardless of whether the Performance Awards to the Co-Founders are approved as described in this Proposal.

We are not asking our stockholders to approve an increase to the share reserve under the 2019 Plan at the Annual Meeting and have no current plans to seek stockholder approval of an increase to the share reserve under the 2019 Plan in the near future.

Executive Summary

We are a mission-driven company. Simply put, we are focused on helping to build a better Internet. We are a global cloud services provider that delivers a broad range of services to businesses of all sizes and in all geographies — dedicated to making them more secure, enhancing the performance of their business-critical applications, and eliminating the cost and complexity of managing individual network hardware. We created a global network architecture that is flexible, scalable, and becomes more

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and more efficient as it expands. Our suite of products helps our clients ensure that external-facing infrastructure (such as websites, applications, and APIs) that is exposed to the Internet is safe from attack and is fast and reliable. Since our initial public offering in 2019, the strength of our business model and our products and global network has resulted in dramatic growth in our business with annual revenue growth of over 125% from 2019 through 2021 and the creation of significant value for our stockholders, with our closing share price having increased over 600% from our IPO through March 31, 2022. And yet, the compensation committee recognizes that we are only beginning our journey to build a better Internet, and with the proper vision, leadership, and execution, we can become one of the world’s key technology companies.

With that goal in mind, in late October 2020, the compensation committee, comprised entirely of independent and disinterested members of our Board of Directors, began preliminary discussions about how to continue to incentivize Mr. Prince and Ms. Zatlyn to lead us through the next phase of our development. Through more than 13 months of work by the compensation committee, the Performance Awards were developed. The compensation committee worked with its independent compensation consultant Compensia, as well as Infinite Equity, Inc. (Infinite Equity), and the law firms of Potter Anderson (independent Delaware counsel to the compensation committee) and Wilson Sonsini Goodrich & Rosati, P.C. (Wilson Sonsini) (corporate counsel to the company), in designing, modeling, and documenting the Performance Awards. After a thorough analysis and review and extensive consultation with its independent compensation consultant, advisors and independent legal counsel, the compensation committee granted the Performance Awards to the Co-Founders. The Performance Awards are designed to incentivize the Co-Founders’ continued leadership of our company over the long-term, and to motivate them with equity that rewards them for providing substantial, and in some cases exponential, increases in stockholder value over a 10-year period. The compensation committee believes the Performance Awards are fully aligned with our long-term ambitions and the interests of our Disinterested Stockholders.

Each Performance Award consists of a 10-year option to purchase an aggregate of 3,960,000 shares of our Class A common stock, which was equal to approximately 1.22% of our outstanding shares of Class A common stock and Class B common stock combined (the Outstanding Shares) on the day prior to the Grant Date. As of April 7, 2022, each Performance Award equals approximately 1.21% of our Outstanding Shares. The exercise price per share subject to the Performance Awards is $136.81, which was the closing sales price of our Class A common stock on December 22, 2021, the Grant Date.

Each Performance Award is comprised of eight separate tranches of shares that become eligible to vest only if certain pre-established stock price targets are achieved and certain time-based vesting requirements are satisfied. Vesting of a Performance Award generally requires that the Co-Founder remain in a primary leadership position with us, specifically in what is referred to as “continued eligible service” (as described further below), through the date the applicable stock price target is determined to have been achieved and through the satisfaction of the time-based vesting requirements.

For the first tranche of shares to become eligible to vest, our stock price must equal at least $156.00 per share (based on a volume weighted average closing price over a rolling 90 calendar days). For the remaining tranches of shares to become eligible to vest, our stock price must increase by approximately 30% for each tranche, with the final tranche of shares becoming eligible to vest only if our per share volume weighted average closing price over a rolling 90 calendar days reaches $979.00, which represents an approximately 616% increase from the closing price of our Class A common stock on December 22, 2021, the Grant Date and an approximately 771% increase from the closing price of our Class A common stock on April 7, 2022.

The compensation committee began contemplating the Performance Awards when our stock price was at or about $54.00 per share and began to coalesce around the stock price targets at a time when the stock price was approximately $120.00 per share. Although our stock price increased to $136.81 per share as of the closing of the market on the Grant Date, the compensation committee believed it was in our best interests and the best interests of our Disinterested Stockholders to set the stock price targets based on an assumed $120.00 per share stock price, with the first stock price target representing a 30% increase from $120.00, to ensure that the compensation committee took the time it deemed appropriate to fully evaluate and determine the terms of the Performance Awards while still rewarding the Co-Founders for the incremental stockholder value created in the interim. The closing price of our Class A common stock on April 7, 2022 was $112.36, and as of the same date, no tranches under the Performance Awards have become eligible to vest.

The number of shares applicable to the tranches is back weighted, as shown in the table further below, so that each Co-Founder receives meaningful rewards for significant stock price performance and even greater rewards for excellent stock price performance. The compensation committee considers the stock price targets to be challenging hurdles, and particularly at the later tranches, the achievement of these goals would result in the creation of extraordinary stockholder value.

In addition to achievement of the stock price targets, the Performance Awards are subject to additional, time-based vesting requirements, under which 1/6th of the total shares subject to the Performance Award vest and become exercisable (assuming achievement of the applicable stock price targets) on each anniversary of the Grant Date, subject to the Co-Founder’s continued

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eligible service. The time-based vesting requirements apply in the same order as the tranches, so that Tranche Number 1 will be the first, and Tranche Number 8 will be the last, to satisfy these vesting requirements. The time-based vesting, but not the stock price target, requirements are waived upon our change in control.

For purposes of the Performance Awards, “continued eligible service” means that, during the first four years following the Grant Date, for Mr. Prince, he must remain the full-time CEO or serve as co-CEO, and, for Ms. Zatlyn, she must remain the full-time President and Chief Operating Officer or serve as CEO or co-CEO, and after the four-year anniversary of the Grant Date, for each Co-Founder, he or she must either continue to serve full-time in one of the applicable roles or serve full-time as our Executive Chair or in another C-Suite position in the company group if a change in position is approved, and the new role’s status as a “C-Suite” position is confirmed, by the then-current compensation committee or the independent members of the Board of Directors. The compensation committee considered the continued eligible service requirements to be an important part of the Performance Award structure, as these requirements help encourage our Co-Founders’ active leadership of our company over the long-term, which the compensation committee believes will be central to fulfilling our potential to become one of the world’s key technology companies and create and sustain extraordinary stockholder value. The continued eligible service definition incorporates some flexibility for the Co-Founders to shift their roles within the organization to different full-time positions that are still integral to the success of the company. Although there is no current intention for any shift in their roles to occur, this provides flexibility as we continue to grow to potentially allow the Co-Founders to focus more of their attention where we deem it will best serve our long-term vision, growth, and profitability.

Please also see the “Additional Background Regarding Performance Awards” section of this Proposal Four for a summary of certain key meetings and events that led to the grant of the Performance Awards.

Summary of the Performance Awards

The following description is only a summary of the material provisions of each Performance Award. Each Performance Award is subject to the same terms and conditions, except for the definition of “continued eligible service” as noted below. This description does not purport to summarize all of the terms of, and is qualified in its entirety by, the full text of the Performance Award Agreement, which is included as Exhibit 10.1 to our Form 8-K that was filed with the SEC on December 27, 2021.


Award Terms						Details
Date of Grant						December 22, 2021

Performance Award Size / Value						Total size of each Performance Award: 3,960,000 shares of our Class A common stock, which represents approximately 1.22% of total outstanding common stock (both our Class A common stock and Class B common stock) as of December 21, 2021, the day prior to the Grant Date. Number of Vesting Tranches: Eight tranches of shares, with the number of shares per tranche back-weighted, in accordance with “Performance-Based Vesting / Targets” below, to create strong ties between levels of reward and stock price performance. The number of shares applicable to the various tranches is back-weighted. This provides for meaningful rewards for significant stock price performance and even greater rewards for excellent stock price performance.

Equity Type						Performance-based nonstatutory stock options. Each Performance Award was granted under our 2019 Plan from its existing share reserve.

Exercise Price						$136.81* per share, which was the Fair Market Value (FMV) of our Class A common stock on the Grant Date, December 22, 2021. *The exercise price per share is subject to adjustment pursuant to the terms of the 2019 Plan. For example, in the event of a forward or reverse stock-split, option exercise price per share would be appropriately adjusted to reflect the impact of the split.

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Expiration Date						December 21, 2031, which is one day prior to the ten-year anniversary of the Grant Date, but each Performance Award can expire earlier in the event of a change in control. Accordingly, each Co-Founder will have until December 21, 2031 (or earlier expiration in connection with a change in control) to exercise any portion of the Performance Award that has vested on or prior to such date.

Vesting in General						Each Co-Founder will vest in the Performance Award only to the extent that we achieve the applicable performance milestones, and the Co-Founders meet the time-based vesting requirements. Each of the eight share tranches of each Performance Award will vest upon the later of (x) certification by the Administrator (as defined below) that the stock price target for such tranche (described below) has been achieved on or before the expiration of the Performance Award on December 21, 2031 and (y) the satisfaction of the time-based vesting requirements applicable to the Performance Award, subject to the applicable Co-Founder’s continued eligible service through the applicable date (except as described below with respect to a change in control and the termination of the Co-Founder’s continued eligible service due to his or her death or disability).

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Performance-Based Vesting / Targets						The Performance Awards shall become eligible to vest in eight share tranches based on our achievement of the following stock price targets: The number of tranche shares and stock price targets are subject to adjustment pursuant to the terms of the 2019 Plan and/or the terms of the Performance Award Agreement. For example, in the event of a forward or reverse stock-split, the number of tranche shares and stock price targets would be appropriately adjusted to reflect the impact of the split. *This represents an approximately 616% increase from the closing price of our Class A common stock on the December 22, 2021 Grant Date. If none of the eight stock price targets are achieved, no shares subject to the Performance Awards will vest. To satisfy a stock price target, the volume weighted average closing price over a rolling 90 calendar day period (following the Grant Date) must equal or exceed the stock price target and will thus require sustained stock price appreciation to be met. The exception is that in the event we experience a change in control, achievement of a stock price target instead will be measured against the change in control price per share of the Class A common stock as described in greater detail below. Except in the event of a change in control, the stock price target must be achieved in full in order for the shares subject to the applicable tranche to become eligible to vest, with no linear interpolation of achievement of stock price targets. The period during which the stock price targets may be achieved begins with the Grant Date and ends on the expiration date of the Performance Awards (subject to earlier expiration on a change in control). Therefore, no credit is given for performance of our stock price prior to the Grant Date. For a tranche of the Performance Award to become eligible to vest, the Co-Founder must have remained in “continued eligible service” (as described further below) through the date the achievement of the applicable stock price target is certified. If a Co-Founder’s continued eligible service ends due to death or disability, his or her Performance Award will remain outstanding and eligible to vest based on the achievement of stock price targets for up to 18 months following the termination date of that Co-Founder’s continued eligible service.

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Time-Based Vesting Requirements						1/6th of the total shares subject to the Performance Award meet the time-based vesting requirements (and therefore, if the applicable stock price targets have been achieved, vest and become exercisable) on each anniversary of the Grant Date, subject to the Co-Founder’s continued eligible service. These time-based vesting requirements are in addition to achievement of the stock price targets. The time-based vesting requirements apply in the same order as the tranches, so that Tranche Number 1 will be the first, and Tranche Number 8 will be the last, to satisfy these vesting requirements. The time-based vesting requirements are waived if we experience a change in control.

Continued Eligible Service Requirement						“Continued eligible service” means that, during the first four years following the Grant Date, Mr. Prince must remain the full-time CEO or serve as co-CEO, and Ms. Zatlyn must remain the full-time President and Chief Operating Officer or serve as CEO or co-CEO, and after the four-year anniversary of the Grant Date, each Co-Founder must either continue to serve full-time in one of those applicable roles or serve full-time as our Executive Chair or in another C-Suite position in our company group if a change in position is approved, and the new role’s status as a “C-Suite” position is confirmed, by the then-current compensation committee or the independent members of the Board of Directors.

Post-Termination of Service Exercise Period						Each Performance Award will remain exercisable, to the extent vested, for the remainder of the 10-year term (subject to earlier termination in connection with our change in control).

Post-Exercise Holding Period						Each Co-Founder must hold shares that he or she acquires upon exercise of the Performance Award until the earlier of the six-year anniversary of the Grant Date and the two-year anniversary of the vesting of such shares (the holding period). Exceptions are permitted to satisfy the exercise price of the option and any applicable tax withholding obligations arising in connection with the exercise, and shares may be transferred by a Co-Founder during the holding period to the Co-Founder’s “immediate family” (as defined in the Performance Award Agreement), for estate planning purposes (to certain permitted entities), or in connection with charitable or philanthropic activities undertaken by the Co-Founder. In addition, the holding period expires upon the Co-Founder’s death or disability. These transfer restrictions were implemented to further align our Co-Founders’ interests with our stockholders’ interests. These restrictions complement the requirements for sustained increases to our stock price performance in order to meet the applicable performance-based goals under the Performance Awards and helps to ensure that the Co-Founders will remain focused on sustaining our success both before, and even after, performance achievement and time-based vesting under the Performance Awards.

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Termination of Continued Eligible Service						There is no vesting acceleration upon termination of continued eligible service, death, or disability. In other words, except with respect to a Co-Founder’s death or disability (as described below), cessation of a Co-Founder’s continued eligible service with us will preclude that Co-Founder’s ability to earn any then-unvested portion of the Performance Award following the date of his or her cessation of continued eligible service. However, the time-based vesting requirements are waived in connection with a change in control of our company as described in greater detail below. In addition, see below regarding continued ability to vest for a limited period following termination due to death or disability. The Performance Awards are not subject to any acceleration of vesting terms (or other provisions) of our Change in Control and Severance Policy or the Co-Founder’s participation agreement under that policy.

Termination due to Death or Disability						If a Co-Founder’s continued eligible service ends due to death or disability, his or her Performance Award will remain outstanding and eligible to vest based on the achievement of stock price targets for up to 18 months following the termination date of the Co-Founder’s continued eligible service. However, the achievement of time-based vesting requirements remains measured as of the date of the Co-Founder’s termination of continued eligible service.* *Solely by way of example, assume a Co-Founder’s continued eligible service terminated due to disability at a point where he or she had time-based vested in 1/6th of the shares subject to the option (660,000 shares), the stock price targets had not been met as to any tranches as of that date, and, within 18 months following such termination, the stock price targets for Tranche Numbers 1, 2 and 3 were achieved (Tranche Numbers 1, 2 and 3 cover a total of 792,000 shares), then the Co-Founder would vest in 660,000 shares on the date the Administrator certified the achievement of the applicable stock price targets.

Change in Control of Cloudflare						There is no automatic acceleration of vesting upon a change in control (as defined in the 2019 Plan) of the company. Instead, in order to fully align the Co-Founders’ interests with the interests of our stockholders, in a change in control situation, the stock price performance period ends early and the achievement of the stock price targets will be measured based on the change in control price per share of Class A common stock, and the rolling 90 calendar-day volume weighted averages of our stock price is disregarded. In the event of a change in control, achievement of the stock price targets will be determined by applying linear interpolation between the change in control price and the relevant stock price targets, as described further below. All time-based vesting requirements are automatically waived in the event of a change in control, such that, subject to the Co-Founder’s continued eligible service through immediately prior to the change in control, all shares that have become eligible to vest as a result of achievement of the stock price targets will vest immediately prior to the change in control. The provisions of the 2019 Plan that provide for full acceleration of vesting in certain instances where the successor does not assume or substitute for awards in a merger or change in control will not apply to the Performance Awards. Instead, any shares subject to a Performance Award that have not vested as of immediately prior to the change in control (after giving effect to the achievement of stock price targets in connection with the change in control and waiver of time-based vesting requirements, as described above) will be forfeited as of immediately prior to the transaction. The treatment of the Performance Awards upon a change in control is intended to align the Co-Founder’s interests with our other stockholders with respect to evaluating potential change in control transactions.

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Linear Interpolation in the Event of a Change in Control						In the event of a change in control, achievement of the stock price targets will be determined by applying linear interpolation between the change in control price and the relevant stock price target amounts.* The compensation committee believed it was appropriate to award the Co-Founders for partial achievement of a stock price target in connection with a change in control, thereby providing incentives to our Co-Founders to maximize the change in control price. *Solely by way of example, assume a change in control occurred during the performance period (and while the Co-Founders remained in continued eligible service, and the transaction had a change in control price of $600.00 per share). Further assume for purposes of this example that the stock price targets for Tranches Numbers 1 through 3 (but not Tranches Numbers 4 through 8) had previously been achieved and certified. Under this example, upon certification by the Administrator, the stock price targets for Tranche Numbers 4 through 6 would be achieved (1,584,000 shares), and the stock price target for Tranche Number 7 would be partially achieved, with the result that, per the linear interpolation, 95,586 shares subject to Tranche Number 7 would be achieved.

Change in Control Price						The change in control price is the amount of cash and the value of any securities or other property paid to holders of shares of Class A common stock (and, in the case of a change in control that is in the form of a sale of substantial portion of our assets as described in the 2019 Plan, any additional consideration paid to the company but not to the holders of Class A common stock, on a per share basis, treating such additional consideration as if such amounts instead had been paid to the holders of shares), in each case, as reasonably determined in good faith by the Administrator.

Performance Assessment “Pause” in the Lead-Up to a Change in Control						During the period between the public announcement of a change in control and the consummation or termination without completion or withdrawal of that transaction, there is a “pause” in measurement of the stock price targets. During that time, a stock price target may not be deemed (newly) achieved based on the rolling 90-day volume weighted average price of our Class A common stock. If the proposed change in control occurs, the performance period ends and is measured based on the change in control price, as described above. However, if the proposed change in control terminates without completion or is otherwise withdrawn, the measurement of performance based on the rolling 90-day volume weighted average price of our Class A common stock will re-commence beginning with the first day following the change in control termination or withdrawal date, with no credit given for stock price performance during the “pause” period. The compensation committee included this “pause” period after acknowledging that our stock price might artificially move in the period between the public announcement of a change in control and the consummation or termination without completion or withdrawal of that transaction, and the intent of the Performance Awards is not to reward such artificial and potentially temporary performance. If, during the “pause” period, the Co-Founder had been in the 18-month period following termination due to death or disability during which the Performance Awards remained eligible to vest based on stock price target achievement, that 18-month period will be extended by the length of the “pause” period, so that the Performance Awards receive the intended full 18-month period in which to achieve performance.

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Clawback						The Performance Awards (including any proceeds, gains, or other economic benefit received by the Co-Founder from any subsequent sale of shares resulting from the exercise of the Performance Award) will be subject to a clawback as may be required under any current clawback policy or any future clawback policy that we are required to adopt pursuant to the listing standards of any national securities exchange or association on which our securities are listed or as is otherwise required by applicable laws.

No Repricings Permitted without Disinterested Stockholder Approval						The exercise price of the Performance Awards may not be reduced, repriced, or otherwise included in an exchange program as defined under our 2019 Plan without approval by the majority of the voting power held by the Disinterested Stockholders.

Administration and Certification of Performance						The Performance Awards will be administered by the compensation committee as the “Administrator” of the 2019 Plan. The Board of Directors or an authorized committee of the Board of Directors also may act as the Administrator of the 2019 Plan and awards thereunder, including the Performance Awards. The compensation committee (or other body acting as the Administrator) will periodically certify in writing whether we have achieved any of the stock price targets, and if so, the date of the achievement and the number of shares that become eligible to vest (or have vested) as a result. Each Co-Founder may, from time to time (but not more than twice per fiscal year), request that the Administrator complete a certification.

Forfeiture if Disinterested Stockholder Approval is Not Obtained						100% of each Performance Award will be immediately forfeited on the date it is voted on by our stockholders if a majority of the voting power held by our Disinterested Stockholders do not approve the Performance Awards. Our Disinterested Stockholders are being asked to approve the Performance Awards at the Annual Meeting. If, for some reason, a vote is not taken at the Annual Meeting, then 100% of each Performance Award will be immediately forfeited on December 22, 2022 if a majority of the voting power held by our Disinterested Stockholders have not approved the Performance Awards by that date.

Other Details Regarding the Performance Awards

Administration. The 2019 Plan is administered by the compensation committee, or any committee of members of the Board of Directors or other individuals appointed by the Board of Directors and satisfying applicable laws (the Administrator). Under the terms of the 2019 Plan, the Administrator has the power and authority to, in good faith, interpret the awards granted under the 2019 Plan and adopt rules for the administration, interpretation, and application of the 2019 Plan and awards thereunder. All good faith decisions or interpretations of the Administrator regarding the 2019 Plan and awards under the 2019 Plan are binding, conclusive, and final, and no member of the Administrator will be personally liable for any such decisions or interpretations.

Leaves of Absence. The Performance Awards will remain eligible to satisfy the stock price targets during any Administrator-approved leave of absence, subject to the applicable Co-Founder remaining in continued eligible service during the leave of absence. However, the ability to satisfy the time-based vesting requirements will be tolled during such leave in accordance with the stock-option related provisions of any company leave of absence policy then in effect.

Calculation of Volume Weighted Average Closing Price. In order for a stock price target to be achieved, the 90 calendar-day volume weighted average closing price of our Class A common stock must equal or exceed the stock price target amount. Specifically, this volume weighted average closing price is determined as the quotient of the (a) the sum of the “daily total

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dollar volume” for the number of trading days in the 90-calendar day period divided by (b) the sum of the total share trading volume of our Class A common stock for the number of trading days in the 90-calendar day period. The “daily total dollar volume” is the product of (a) the closing price of a share of our Class A common stock on a given trading day multiplied by (b) the corresponding trading day’s trading volume of our Class A common stock.

Certain Other Termination Provisions. In all cases, in the event that a majority of the voting power held by the Disinterested Stockholders does not approve the Performance Awards within 12 months after their Grant Date or, if at any meeting of our stockholders at which the Performance Awards are presented to the Disinterested Stockholders for a vote, the Disinterested Stockholders do not approve the Performance Awards by the requisite vote, the Performance Awards will automatically be forfeited and the Co-Founders will have no rights to the Performance Awards or the shares underlying it. Upon a change in control of our company, any unvested portion of the Performance Awards will automatically terminate at the effective time of the change in control event and any vested portion of the Performance Awards will be treated in accordance with the terms of the 2019 Plan.

Certain Other Adjustments Upon Certain Transactions. If any extraordinary dividend or other extraordinary distribution (whether in cash, shares of Class A common stock, other securities, or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of shares of Class A common stock, or other securities of ours, issuance of warrants or other rights to acquire securities of ours, other change in our corporate structure affecting the shares of Class A common stock, or any similar equity restructuring transaction, as that term is used in Statement of Financial Accounting Standards Board Accounting Standards Codification Topic 718 (or any of its successors) affecting the shares of Class A common stock, occurs (including, without limitation, a change in control), the Administrator, to prevent diminution or enlargement of the benefits or potential benefits intended to be provided under the Performance Awards, will adjust the number, class, and price of shares covered by each outstanding Performance Award in such a manner as it deems equitable and will make appropriate adjustments to the stock price targets (to the extent such goals have not yet been achieved). Notwithstanding the foregoing, the conversion of any convertible securities of ours and ordinary course repurchases of shares or other securities of ours will not be treated as an event that will require adjustment of these items.

Rights as a Stockholder; No Exercise Until Stockholder Approval. Each Co-Founder’s rights as a stockholder (including the right to vote and to receive dividends and distributions) with respect to shares subject to the Performance Awards will not begin until shares have been issued and recorded on our records or the records of our transfer agents or registrars. In addition, unless and until the Disinterested Stockholders approve the Performance Awards, no portion of either Performance Award may be exercised, regardless of whether any portion of the Performance Awards may have vested before such stockholder approval.

Exercise Methods. Each Co-Founder may exercise any vested options under his or her Performance Award in any of the following ways: (i) cash, check or wire transfer, (ii) a formal cashless exercise program adopted by the company (for example, under a program in which the stock option is exercised and the shares are simultaneously sold by a broker or by us to pay for the exercise price), (iii) a net exercise, under which shares having a fair market value equal to the exercise price are withheld by us from otherwise deliverable shares, (iv) surrender of other shares held by the Co-Founder having a fair market value equal to the exercise price, or (v) any other form of legal consideration acceptable to the Administrator.

Tax Withholdings. Each Co-Founder must make satisfactory arrangements for the payment of applicable tax withholdings, and if a Co-Founder fails to do so at the time of an attempted exercise of a Performance Award, we may refuse to honor the exercise and refuse to deliver the shares. We have the right, but not the obligation, to satisfy any tax withholding obligations by withholding from proceeds of a sale of shares acquired upon the exercise of option that is arranged by us, or by reducing the number of shares otherwise deliverable to the Co-Founder upon exercise. Unless we determine otherwise, and subject to applicable laws, withholding through the reduction of otherwise deliverable shares will be the method by which such tax withholding obligations are satisfied.

Non-transferability. The Performance Awards may not be transferred in any manner other than by will or the laws of descent or distribution and may be exercised during the Co-Founder’s lifetime only by such Co-Founder. Shares issued to a Co-Founder upon exercise of a Performance Award are subject to the holding period described further above.

Other Terms. Except as described herein and as set forth in the Performance Award Agreement, each Performance Award is subject to the terms of the 2019 Plan.

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Related Non-Founder Performance Awards to Key Leadership Team

After granting the Performance Awards to the Co-Founders, the compensation committee discussed with management and with Compensia the possibility of awarding the Non-Founder Performance Awards to our other named executive officers and certain other key employees.

The compensation committee determined that granting the Non-Founder Performance Awards and granting them in the form of performance-based options to these employees with the same performance goals as the Performance Awards would provide strong retention for key talent over the long-term and strong incentives for this key leadership group to grow long-term value for our stockholders and align the incentives of the Co-Founders and these other named executive officers and key employees.

As a result, effective as of February 14, 2022, our Board of Directors granted to our named executive officers (other than the Co-Founders) and the compensation committee granted to certain other key employees, the Non-Founder Performance Awards covering an aggregate of 4,915,000 shares of our Class A common stock (representing approximately 1.5% of our outstanding shares of Class A common stock and Class B common stock combined as of February 14, 2022), including a grant covering 555,000 shares of our Class A common stock to Thomas Seifert, our Chief Financial Officer, and 330,000 shares of our Class A common stock to Douglas Kramer, our General Counsel and Secretary. These grants of the Non-Founder Performance Awards were made under our 2019 Plan from its existing share reserve.

These Non-Founder Performance Awards contain substantially similar terms as the Performance Awards, including that the same stock price targets must be achieved for the applicable share tranche to become eligible to vest. However, these Non-Founder Performance Awards differ from the Performance Awards in six key ways:

1.The Non-Founder Performance Awards have an exercise price per share of $105.56, which was the closing price of our Class A common stock on February 14, 2022, the grant date of such awards.

2.Instead of containing the “continued eligible service” definition applicable to the Performance Awards, the holders of the Non-Founder Performance Awards are required to remain a “Service Provider” (as defined in our 2019 Plan) through the date the achievement of the applicable performance stock price target is certified, and through the applicable time-based vesting date (except as described below).

3.The time-based vesting requirement under the Non-Founder Performance Awards is different than under the Performance Awards as our retention needs for these leaders are different than for the Co-Founders. For the Non-Founder Performance Awards, this requirement is satisfied as to 1/6th of the shares subject to the applicable share tranche on each company quarterly vesting date (February 15, May 15, August 15, or November 15) occurring on or after the date of certification of achievement of the stock price target for such tranche. Similar to the Performance Awards, the time-based vesting requirement is waived in the event of a change in control.

4.If the holder of a Non-Founder Performance Award status as a “Service Provider” ends with us as a result of death or disability, then, instead of his or her Non-Founder Performance Award remaining outstanding and eligible to vest based on the achievement of stock price targets for up to 18 months following the termination date of the holder, the unvested portion of the Non-Founder Performance Award will remain outstanding for thirty days following the date the holder terminates as a “Service Provider.”

5.There are no holding periods applicable to shares purchased under the Non-Founder Performance Awards. The compensation committee believes that, as with the Performance Awards to our Co-Founders, awarding our other key leaders with stock options that provide significant rewards for providing substantial, and in some cases exponential, increases in stockholder value over the long-term will motivate these leaders, and will orient the team toward the same goals and fully align them with the long-term interests of our stockholders, including our Disinterested Stockholders.

6.We are not seeking stockholder approval of these Non-Founder Performance Awards. In the event that the Performance Awards to the Co-Founders are not approved by a majority of the voting power held by the Disinterested Stockholders in the manner required under the Performance Award Agreement (as described above), the Non-Founder Performance Awards will remain in effect in accordance with their terms and the forfeiture of the Performance Awards to the Co-Founders will not impact the status of the Non-Founder Performance Awards.

Potential Value that Could be Realized under the Performance Awards

The table below depicts the maximum theoretical value that could be realized by each Co-Founder under the Performance Award over various vesting scenarios. The table below assumes that a Co-Founder does not exercise any portion of the Co-Founder’s Performance Award until immediately prior to the end of the 10-year term, which results in a significantly larger

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value being attributed to the Co-Founder than would be the case if the Co-Founder exercised the Co-Founder’s Performance Award as each tranche vests. If both Co-Founders exercised their Performance Awards immediately prior to the 10-year term, the aggregate value realized by both Co-Founders would be 200% of the amount in the first column (“Co-Founder Value Realized Under the Performance Award ($ in millions)”) and the aggregate value to our stockholders set forth in second column below (“Stockholder Value Realized ($ in millions)”) would proportionally decrease.

This table does not take into account any future dilutive events over the next ten years even though such events will occur. Importantly, this table also does not take into account any exercises of Non-Founder Performance Awards, which are eligible to become earned on substantially the same performance terms as the Performance Awards granted to our Co-Founders, as described in further detail above. Accordingly, this table should only be used for illustration purposes, recognizing that future dilutive events, exercises of the Non-Founder Performance Awards, or earlier exercises of the Performance Awards by either of the Co-Founders would significantly decrease the ultimate value the Co-Founder would realize from the Performance Award over the various vesting scenarios.


Total Tranches Earned	Co-Founder Value Realized Under the Performance Award ($ in millions)(1)	Stockholder Value Realized ($ in millions)(2)
0 Tranches	—	—
1 Tranche	3.8	6,253.0
2 Tranches	26.2	21,554.6
3 Tranches	99.9	41,043.5
4 Tranches	245.0	66,981.9
5 Tranches	489.8	100,319.6
6 Tranches	1,050.6	143,122.5
7 Tranches	1,952.1	198,952.6
8 Tranches	3,335.1	271,255.4

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(1)Values are calculated as of December 22, 2021, the Grant Date of the Performance Awards, and assume a current stock price of $136.81 per share, which was the closing price of a share of our Class A common stock on the Grant Date.

(2)For purposes of this calculation, we have assumed the total number of our outstanding shares of common stock is 326,043,355 and that our estimated total market capitalization is $44,606 million, which represents the total number of our outstanding shares of common stock as of April 7, 2022 multiplied by a stock price of $136.81 per share, which was the closing stock price of a share of our Class A common stock on the Grant Date. The total number of outstanding shares of our common stock includes shares outstanding and held by the Co-Founders as of April 7, 2022.

Potential Ownership of Securities As a Result of the Performance Awards

As of March 31, 2022, Mr. Prince beneficially owned 33,770,052 shares of the company’s Class B common stock, including (i) 17,649,579 shares of Class B common stock held of record by The Matthew Prince Revocable Trust dated October 29, 2015, for which Mr. Prince serves as a trustee, and of which 1,500,000 may be repurchased by us at the original exercise price; (ii) 491,031 shares of Class B common stock held of record by The Matthew Prince 2020 Annuity Trust dated May 20, 2020, for which Mr. Prince serves as co-trustee and investment advisor; (iii) 4,000,000 shares of Class B common stock held of record by The Matthew Prince 2021 Grantor Retained Annuity Trust #1 dated May 25, 2021, for which Mr. Prince serves as co-trustee and investment advisor; (iv) 4,000,000 shares of Class B common stock held of record by The Matthew Prince 2021 Grantor Retained Annuity Trust #2 dated August 13, 2021, for which Mr. Prince serves as co-trustee and investment advisor; (v) 6,569,442 shares of Class B common stock held of record by The Prince Family Nonexempt Irrevocable Trust dated March 29, 2016, for which Mr. Prince serves as an investment advisor; and (vi) 1,060,000 shares of Class B common stock held of record by The Prince Family Exempt Irrevocable Trust dated March 29, 2016, for which Mr. Prince serves as an investment advisor.

As of March 31, 2022, Ms. Zatlyn beneficially owned 11,586,772 shares of the company’s Class B common stock, including (i) 3,716,213 shares of Class B common stock held of record by The Sutherland/Zatlyn Revocable Trust dated November 17, 2016, for which Ms. Zatlyn serves as co-trustee; (ii) 1,576,284 shares of Class B common stock held of record by The SZ 2021 Irrevocable Trust dated November 6, 2021, for which Ms. Zatlyn serves as appointer; (iii) 294,275 shares of Class B common

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stock held of record by The SZ 2020 Irrevocable Trust dated November 25, 2020, for which Ms. Zatlyn serves as an investment advisor; (iv) 2,000,000 shares of Class B common stock held of record by The Sutherland/Zatlyn 2021 Annuity Trust dated May 22, 2021, for which Ms. Zatlyn serves as co-trustee; and (v) 4,000,000 shares of Class B common stock subject to options exercisable within 60 days of March 31, 2022, of which 2,500,000 shares are fully vested as of March 31, 2022.

For illustrative purposes only, if (i) all 3,960,000 shares of Class A common stock subject to each Co-Founder’s Performance Award were to become fully vested, outstanding and held by the applicable Co-Founder; and (ii) there were no other dilutive events of any kind, Mr. Prince and Ms. Zatlyn would beneficially own 11.5% and 4.7%, respectively, of the outstanding shares of our common stock as of March 31, 2022.

However, this calculation does not account for any future dilutive events over the next ten years, such as the issuance of additional equity as compensation to employees, as consideration for mergers and acquisitions, or for capital-raising activities, which would have the effect of diluting each Co-Founder’s ownership of our common stock, nor does it account for any sales of our stock that each Co-Founder will likely have to make in order to pay the exercise price and required taxes upon the exercise of stock options. Therefore, it is impossible to provide the exact or true percentage of each Co-Founder’s future total ownership of our common stock upon the vesting of one or more tranches of the Performance Award. Given that some amount of dilution and/or stock sales to cover required tax payments will occur, we believe that our Co-Founders’ future potential ownership of our common stock will be significantly less than 11.5% and 4.7%, respectively, if 100% of the Performance Awards were to vest.

Accounting and Tax Considerations of the Performance Awards

Accounting Consequences. We follow Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 718, Compensation—Stock Compensation (ASC Topic 718) for our stock-based compensation awards. ASC Topic 718 requires companies to measure the compensation expense for all stock-based compensation awards made to employees and directors based on the grant date “fair value” of these awards. Pursuant to ASC Topic 718, the fair value of the Performance Awards granted to Matthew Prince and Michelle Zatlyn will be determined using a Monte Carlo simulation; however, this calculation cannot be performed prior to the date on which it is approved by a majority of the voting power of the Disinterested Stockholders, as there is no “grant date” under ASC Topic 718 until such time. ASC Topic 718 also requires companies to recognize the compensation cost of their stock-based compensation awards in their income statements over the period that an executive officer is required to render service in exchange for the option or other award. Accordingly, the Performance Awards would result in the recognition of additional stock-based compensation expense over the requisite service period pursuant to ASC Topic 718.

For illustrative purposes only, the fair value of the Performance Awards has been estimated assuming an accounting grant date of June 2, 2022 (the date of the Annual Meeting at which the Performance Awards will be voted on by the Disinterested Stockholders), while, solely for the convenience of running an illustrative calculation, we have used $101.80, the year-to-date average closing market price of our Class A common stock through March 14, 2022, as if that were the closing price on June 2, 2022. The actual closing price that will be used in calculating the grant date fair value of the Performance Awards will be the closing market price of our Class A common stock on the date the Performance Awards are approved by the Disinterested Stockholders, as noted above. Recognition of expense of all of the tranches will commence on the date the Performance Awards are approved by the Disinterested Stockholders. Pursuant to ASC Topic 718, the stock price targets are considered “market conditions” and therefore the probability of meeting the eight stock price targets is not considered in determining the timing of expense recognition. This expense will be recognized ratably over the longer of the vesting period and the derived service period of each respective tranche, which is a weighted average of approximately 4.37 years, and the estimated expense to be recognized for fiscal year 2022, using the illustrative assumptions noted, is $35.2 million in the aggregate for each Performance Award. As a result, based on these assumptions, the company expects that the aggregate grant date fair value of each Performance Award (across all eight tranches) would be $222.1 million. The foregoing discussion contains estimates solely for illustrative purposes and, because the grant date of the Performance Awards for accounting purposes will be the date of the approval by the Disinterested Stockholders of the Performance Awards, the actual grant date fair value of the Performance Awards and related compensation expense will not be determined unless and until the Performance Awards are approved by a majority of the voting power of the Disinterested Stockholders, and the actual amounts may ultimately differ significantly from the foregoing illustration.

Federal Income Tax Consequences. The following discussion is a brief summary of the principal United States federal income tax consequences of the Performance Awards under the Code, as in effect on the date of this Proxy Statement. The following summary assumes that each Co-Founder remains a U.S. taxpayer. The Code and its regulations are subject to change. This summary is not intended to be exhaustive and does not describe, among other things, state, local or non-U.S. income and other tax consequences. The specific tax consequences to each Co-Founder will depend upon their future individual circumstances.

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Tax Effects for the Co-Founders. The Co-Founders did not have taxable income from the grant of the Performance Awards nor will they have taxable income if our Disinterested Stockholders approve the Performance Awards nor will they have taxable income if the Performance Awards are forfeited as a result of our Disinterested Stockholders not approving them. If and when a Co-Founder exercises any portion of a Performance Award, the Co-Founder will recognize ordinary income with respect to each purchased share in an amount equal to the excess of the fair market value (on the exercise date) of a share of our Class A common stock purchased over the exercise price per share of the option. Any taxable income recognized in connection with the exercise of the Performance Award by a Co-Founder will be subject to tax withholding by us. Any additional gain or loss recognized upon any later disposition of the shares of Class A common stock will be capital gain or loss to the Co-Founder.

Tax Effects for the Company. Generally, Section 162(m) of the Code limits the amount we may deduct from our federal income taxes for compensation paid to our CEO and certain other current or former executive officers who are “covered employees” within the meaning of Section 162(m) of the Code, which includes Ms. Zatlyn, to $1 million per year, per individual, subject to certain exceptions. The regulations promulgated under Section 162(m) of the Code contain a transition rule that applies to companies, such as ours, that become subject to Section 162(m) of the Code by reason of becoming publicly held prior to December 20, 2019. Under this rule, certain compensation granted during a transition period currently is not counted toward the deduction limitation of Section 162(m) of the Code if the compensation is paid under a compensation arrangement that was in existence before the effective date of the initial public offering and certain other requirements are met. While certain of our equity awards may be eligible to be excluded from the deductibility limitation of Section 162(m) of the Code under this transition rule, the compensation committee has not adopted a policy that all equity or other compensation must be deductible. We currently expect our transition period to expire at our annual meeting of stockholders to be held in 2023, although it could expire earlier in certain circumstances. As a result, we currently expect that we will be allowed a tax deduction related to each Performance Award in an amount equal to the ordinary income realized by the applicable Co-Founder when he or she exercises the Performance Award and recognizes such income. However, the rules related to these deductions are complex and may change, and it is possible that we will not be able to deduct some or all of such amounts.

Performance Awards Benefits

The following table sets forth the aggregate number of shares of our Class A common stock subject to the Performance Awards and the Non-Founder Performance Awards, to all of our current executive officers, as a group, to all directors who are not executive officers, as a group, and to all employees who are not also executive officers, as a group.


Name of Individual or Group and Position						Number of Shares Subject to Options
Matthew Prince						3,960,000
Director, Chief Executive Officer
Michelle Zatlyn						3,960,000
Director, President and Chief Operating Officer
Thomas Seifert						555,000
Chief Financial Officer
Douglas Kramer						330,000
General Counsel and Secretary
All current executive officers, as a group (4 persons)						8,805,000
All current directors who are not executive officers, as a group (6 persons)						—
All employees who are not executive officers, as a group						4,030,000

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Vote Required

Approval of the Performance Awards requires the affirmative vote under both of two different voting standards:

(2) the affirmative vote of a majority of the voting power of all issued and outstanding shares of the Class A common stock and the Class B common stock entitled to vote on the Performance Awards, as of the Record Date and voting as a single class, excluding those shares of Class A common stock and Class B common stock owned of record or beneficially, directly or indirectly, by: (a) members of the Excluded Group and (b) members of the Non-Founder Award Group (together the shares represented by (a) - (b), the Excluded Shares) (the Majority of the Minority Standard).

The “Excluded Group” means either Matthew Prince or Michelle Zatlyn or any of their respective Permitted Entities or Family Members, or any “group” that includes any of Matthew Prince or Michelle Zatlyn or their Permitted Entities or Family Members. "Non-Founder Award Group" means each named executive officer and other employee that was awarded a performance-based option grant under the 2019 Plan effective as of February 14, 2022, or any of their respective Permitted Entities or Family Members. Each of “Family Members” and “Permitted Entities” have the meanings ascribed to them in the Amended and Restated Certificate of Incorporation of the company, effective as of September 17, 2019.

The Excluded Shares will not be included in the numerator or denominator for purposes of determining whether the Majority of the Minority Standard has been obtained. We refer to the holders of shares of our Class A common stock and Class B common stock other than those listed in (a)-(b) above as the "Disinterested Stockholders." For purposes of this Proposal Four, any abstentions and broker non-votes will have the same effect as a vote against this proposal.

Supporting Statement and Recommendation of the Compensation Committee and the Board of Directors

We are asking the Disinterested Stockholders to vote their shares “FOR” the Performance Awards.

In October 2020, the compensation committee began preliminary discussions about potential performance award grants to our Co-Founders due in part to their view that the equity compensation incentives of the Co-Founders might not be sufficient to appropriately incentivize their long-term performance and fully-engaged leadership of the company. The members of the compensation committee, each of whom is an independent and disinterested member of the Board of Directors, spent over a year considering and designing a compensation award that would incentivize each Co-Founder to maximize value for the Disinterested Stockholders. As part of this process, the compensation committee and the Board of Directors sought to balance a variety of important objectives, including:

•Motivating the Co-Founders to help us continue to grow and pursue our mission to help build a better Internet by linking each Co-Founder’s compensation to our stock price performance, and thereby incentivizing the continued and long-term alignment of each Co-Founder’s interests with our interests and those of our other stockholders, including the Disinterested Stockholders;

•Incentivizing each Co-Founder to remain in a primary leadership role within our company over the long-term, which the compensation committee believes is critical to our company’s long-term growth and stock price performance;

•Motivating each Co-Founder to help us achieve stock price milestones that would generate extraordinary value for our stockholders, including the Disinterested Stockholders;

•Providing each Co-Founder with challenging performance goals to incentivize their continued attention and involvement as active leaders in the company over the long-term;

•Providing the Co-Founders with continued inspiration for innovation over the long-term and as a catalyst for the achievement of our long-term strategic and financial objectives, including growing the company into one of world’s key technology companies, with stock price performance acting as the key indicator of such achievement; and

•Providing incentives that are linked to stock price performance, as the Performance Awards will not vest (and therefore not be of any value to the Co-Founders) unless all of our stockholders benefit from significant value creation.

The Board of Directors and the compensation committee believe that we are only beginning our journey to helping build a better Internet, and have the potential, with proper vision, leadership, and execution, to become one of the world’s key technology companies.

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The Board of Directors and the compensation committee recommend that the Disinterested Stockholders approve the Performance Awards for the following reasons:

1.Strengthening Incentives and Further Aligning of Stockholder, Company and Co-Founder Interests

The Board of Directors and the compensation committee believe in rewarding our Co-Founders in a way that is consistent with other comparable growth companies and provides compensation to them if, and only if, all other stockholders realize significant value.

Each Co-Founder’s receipt of any benefit from his or her Performance Award will be dependent on the Co-Founder leading us to achieve challenging milestones, requiring our stock price to reach $156.00 (based on a volume weighted average closing price over a rolling 90 calendar days) (for reference, the closing price of a share of Class A common stock was $112.36 on April 7, 2022) and then to continue to increase its stock price performance in

SEC Form DEF 14A filed by Cloudflare Inc.