Company: NET
Filing Date: 2025-04-21
Form Type: DEF 14A
Source: 0001477333-25-000065
Chunk: 52

Company: Cloudflare, Inc.
Filing Date: 2025-04-21
Form: DEF 14A
Chunk 52
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 common stock than would be the case with a stock option. Since their value increases with any increase in the value of the underlying shares, RSU awards serve as an incentive which aligns with the long-term interests of our named executive officers and stockholders. Unlike stock options, however, RSU awards have real economic value when they vest even if the market price of our Class A common stock declines or stays flat, thus delivering more predictable value to our named executive officers. In addition, because they are subject to a multi-year vesting requirement, RSU awards serve our retention objectives since our named executive officers must remain continuously employed by us through the applicable vesting dates to fully earn these awards.

2024 Equity Awards for Messrs. Seifert and Kramer

In January 2024, the compensation committee recommended to our Board of Directors that RSU awards be granted to Messrs. Seifert and Kramer after considering the factors described in “ Compensation-Setting Process – Setting Target Total Direct Compensation ” above, as well as the outstanding equity holdings of each of Messrs. Seifert and Kramer, the projected impact of the proposed awards on our earnings, the proportion of our total shares outstanding used for annual employee long-term incentive compensation awards (our “burn rate”) in relation to the median proportions of the companies in our compensation peer group, and the potential voting power dilution to our stockholders in relation to the median practice of the companies in our compensation peer group.

The RSU awards granted to Messrs. Seifert and Kramer had target values of $10 million and $5 million, respectively, with the number of units to be determined based on the average closing market price of our Class A common stock for the trailing 30-trading day period ending on January 23, 2024. On January 24, 2024, our Board of Directors approved the grant of RSU awards to Messrs. Seifert and Kramer as follows:

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| Named Executive Officer |     | RSU Award (target value) ($)(1) |            |     | RSU Award (number of units) (#) |         |
| Thomas Seifert          |     |                                 | 10,000,000 |     |                                 | 122,970 |
| Douglas Kramer          |     |                                 |  5,000,000 |     |                                 |  61,485 |

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(1) This reflects the target value, rather than the grant date