Paul D. Underwood - Feb 14, 2022 Form 4 Insider Report for Cloudflare, Inc. (NET)

Role: Chief Accounting Officer
Signature: /s/ Lindsey Cochran, by power of attorney
Stock symbol: NET
Transactions as of: Feb 14, 2022
Transactions value $: $0
Form type: 4
Date filed: 2/16/2022, 07:03 PM
Previous filing: Feb 3, 2022
Next filing: Feb 22, 2022

Derivative Securities (e.g., puts, calls, warrants, options, convertible securities)

Type	Sym	Class	Transaction	Value $	Shares	Change %	* Price $	Shares After	Date	Underlying Class	Amount	Exercise Price	Ownership	Footnotes
transaction	NET	Performance Stock Option (right to buy)	Award	$0	+70K		$0.00	70K	Feb 14, 2022	Class A Common Stock	70K	$105.56	Direct	F1, F2

* An asterisk sign (*) next to the price indicates that the price is likely invalid.

Explanation of Responses:

Id	Content
F1	The shares subject to the Performance Stock Option are comprised of eight separate tranches that become eligible to vest upon achievement of certain stock price targets (the "Stock Price Goals") at any time within ten years of February 14, 2022. The Stock Price Goals, the percentage of total shares subject to the grant included in each tranche, and the terms of achievement are substantially the same as those terms that apply to the performance stock options granted on December 22, 2021 to Mr. Prince and Ms. Zatlyn, as described in Item 8.01 of the Current Report on Form 8-K filed by the Issuer with the U.S. Securities and Exchange Commission on December 27, 2021. Upon satisfaction of a Stock Price Goal, 1/6 of the shares subject to the applicable tranche vests and becomes exercisable on each Issuer quarterly vesting date (2/15, 5/15, 8/15 or 11/15) occurring on or after the date of certification of achievement of the applicable Stock Price Goal for such tranche.
F2	In addition, the Performance Stock Option is subject to the reporting person's continued status as a Service Provider through each vesting date. The time-based vesting requirements are waived upon a change in control of the Issuer.

Content

The shares subject to the Performance Stock Option are comprised of eight separate tranches that become eligible to vest upon achievement of certain stock price targets (the "Stock Price Goals") at any time within ten years of February 14, 2022. The Stock Price Goals, the percentage of total shares subject to the grant included in each tranche, and the terms of achievement are substantially the same as those terms that apply to the performance stock options granted on December 22, 2021 to Mr. Prince and Ms. Zatlyn, as described in Item 8.01 of the Current Report on Form 8-K filed by the Issuer with the U.S. Securities and Exchange Commission on December 27, 2021. Upon satisfaction of a Stock Price Goal, 1/6 of the shares subject to the applicable tranche vests and becomes exercisable on each Issuer quarterly vesting date (2/15, 5/15, 8/15 or 11/15) occurring on or after the date of certification of achievement of the applicable Stock Price Goal for such tranche.

In addition, the Performance Stock Option is subject to the reporting person's continued status as a Service Provider through each vesting date. The time-based vesting requirements are waived upon a change in control of the Issuer.