To Be Held On June 21, 2021

Dear Stockholder:

You are cordially invited to attend the Annual Meeting of Stockholders of Fastly, Inc., a Delaware corporation (the “Company”). The meeting will be held virtually on Monday, June 21, 2021 at 9:00 a.m. Pacific Time at www.virtualshareholdermeeting.com/FSLY2021, where you will be able to listen to the meeting live, submit questions (before and during the meeting) and vote online. The Company is holding the annual meeting for the following purposes:

These items of business are more fully described in the Proxy Statement accompanying this Notice.

By Order of the Board of Directors

/s/ Joshua Bixby

Joshua Bixby

Chief Executive Officer

San Francisco, CA

April 28, 2021

As required under the NYSE listing standards, a majority of the members of a listed company’s Board of Directors must qualify as “independent,” as affirmatively determined by the Board of Directors. The Board consults with the Company’s counsel to ensure that the Board’s determinations are consistent with relevant securities and other laws and regulations regarding the definition of “independent,” including those set forth in pertinent listing standards of the NYSE, as in effect from time to time.

Our Board of Directors has undertaken a review of the independence of the directors and considered whether any director has a material relationship with us that could compromise his or her ability to exercise independent judgment in carrying out his or her responsibilities. Based upon information requested from and provided by each director concerning such director’s background, employment and affiliations, including family relationships, our Board of Directors

determined that Ms. Álvarez, Mr. Dhaliwal, Mr. Hornik, Mr. Paisley and Ms. Wright, representing five of our seven directors, are “independent directors” as defined under the listing standards of the NYSE. In making these determinations, our Board of Directors considered the current and prior relationships that each non-employee director has with our Company and all other facts and circumstances that our Board of Directors deemed relevant in determining their independence, including the beneficial ownership of our capital stock by each non-employee director and the transactions involving them described in “Certain Relationships and Related-Person Transactions.” Mr. Bergman and Mr. Bixby are not independent given their positions as our Chief Architect and Chief Executive Officer, respectively.

There are no family relationships among the directors and executive officers.

Mr. Bergman serves as the Chairperson of our Board of Directors, and Mr. Hornik serves as the Lead Independent Director. Our Board of Directors believes that the current Board leadership structure, coupled with a strong emphasis on Board independence, provides effective independent oversight of management while allowing the Board and management to benefit from the extensive executive

leadership and operational experience of Mr. Bergman and Mr. Hornik. Independent directors and management sometimes have different perspectives and roles in strategy development. Our independent directors bring experience, oversight and expertise from outside of our Company, while Mr. Bergman and Mr. Bixby bring company-specific experience and expertise.

One of the key functions of our Board of Directors is informed oversight of our risk management process. In particular, our Board of Directors is responsible for monitoring and assessing strategic risk exposure. Our executive officers are responsible for the day-to-day management of the material risks we face. Our Board of Directors administers its oversight function directly as a whole, as well as through various standing committees of our Board that address risks inherent in their respective areas of oversight. For example, our Audit Committee is responsible for overseeing the

management of risks associated with our financial reporting, accounting and auditing matters, and information security; our Compensation Committee oversees the management of risks associated with our compensation policies and programs; and our Nominating and Corporate Governance Committee oversees the management of risks associated with director independence, conflicts of interest, composition and organization of our Board, director succession planning, and oversight of corporate governance.

Our Board of Directors met ten times during 2020. Each Board member attended 75% or more of the aggregate number of meetings of the Board of Directors and of the committees on which he or she

served, held during the portion of the last fiscal year for which he or she was a director or committee member.

Our Audit Committee consists of three directors, Mr. Dhaliwal, Mr. Paisley and Ms. Wright. Our Board of Directors has determined that each of our Audit Committee members satisfies the independence requirements for Audit Committee members under the listing standards of the NYSE and Rule 10A-3 of the Exchange Act. Each member of our Audit Committee meets the financial literacy requirements of the listing standards of the NYSE. Mr. Paisley is the chairperson of the Audit Committee and our Board of Directors has determined that Mr. Paisley is an audit committee “financial expert” as defined by Item 407(d) of Regulation S-K under the Securities Act. The principal duties and responsibilities of our Audit Committee include, among other things:

Our Audit Committee operates under a written charter that satisfies the applicable rules of the SEC and the listing standards of the NYSE. The Audit Committee met nine times in 2020.

Our Compensation Committee consists of three directors, Ms. Álvarez, Mr. Hornik and Ms. Wright, each of whom our Board of Directors has determined is a non-employee member of our Board of Directors as defined in Rule 16b-3 under the Exchange Act. Mr. Hornik is the chairperson of the Compensation Committee. The composition of our Compensation Committee meets the requirements for independence under current listing standards of the NYSE and current SEC rules and regulations. The principal duties and responsibilities of our Compensation Committee include, among other things:

Our Compensation Committee operates under a written charter that satisfies the applicable rules of the SEC and the listing standards of the NYSE. The Compensation Committee met seven times in 2020.

None of Ms. Álvarez, Mr. Hornik or Ms. Wright, the members of our Compensation Committee, is currently, or has been at any time, one of our officers or employees. None of our executive officers currently serves, or in the past year has served, as a member of

the board of directors or compensation committee of any entity that has one or more executive officers serving on our Board of Directors or Compensation Committee.

Our Nominating and Corporate Governance Committee consists of three directors, Ms. Álvarez, Mr. Hornik and Mr. Paisley. Ms. Álvarez is the chairperson of the Nominating and Corporate Governance Committee. The composition of our Nominating and Corporate Governance Committee meets the requirements for independence under current listing standards of the NYSE and current SEC rules and regulations. The Nominating and Corporate Governance Committee’s responsibilities include, among other things:

Our Nominating and Corporate Governance Committee operates under a written charter that satisfies the applicable rules of the SEC and the listing standards of the NYSE. The Nominating and Corporate Governance Committee met four times in 2020.

The Nominating and Corporate Governance Committee believes that candidates for director should have certain minimum qualifications, including the ability to read and understand basic financial statements, being over 21 years of age and having the highest personal integrity and ethics. The Nominating and Corporate Governance Committee also intends to consider such factors as possessing relevant expertise upon which to be able to offer advice and guidance to management, having sufficient time to devote to our affairs, demonstrated excellence in his or her field, having the ability to exercise sound

business judgment and having the commitment to rigorously represent the long-term interests of our stockholders. However, the Nominating and Corporate Governance Committee retains the right to modify these qualifications from time to time. Candidates for director nominees are reviewed in the context of the current composition of our Board of Directors, our operating requirements, and the long-term interests of its stockholders. In conducting this assessment, the Nominating and Corporate Governance Committee typically considers diversity (including gender, racial and ethnic diversity), age, skills and such other factors as it deems appropriate, given our current needs and the needs of the Board of Directors, to maintain a balance of knowledge, experience and capability.

The Nominating and Corporate Governance Committee appreciates the value of thoughtful Board refreshment, and regularly identifies and considers qualities, skills and other director attributes that would enhance the composition of the Board of Directors. In the case of incumbent directors whose terms of office are set to expire, the Committee reviews these directors’ overall service to us during their terms, including the number of meetings attended, level of participation, quality of performance and any other relationships and transactions that might impair the directors’ independence. In the case of new director candidates, the Nominating and Corporate Governance Committee also determines whether the nominee is independent for NYSE purposes, which determination is based upon applicable NYSE listing standards, applicable SEC rules and regulations and the advice of counsel, if necessary. The Nominating and Corporate Governance Committee then uses its network of contacts to compile a list of potential candidates, but may also engage, if it deems appropriate, a professional search firm. The Nominating and Corporate Governance Committee conducts any appropriate and necessary inquiries into the backgrounds and qualifications of possible candidates after considering the function and needs of the Board of Directors. The Nominating and Corporate Governance Committee meets to discuss and consider the candidates’ qualifications and then selects a nominee for recommendation to the Board of Directors by majority vote.

The Nominating and Corporate Governance Committee will consider director candidates recommended by stockholders. The Nominating and Corporate Governance Committee does not intend to

alter the manner in which it evaluates candidates, including the minimum criteria set forth above, based on whether or not the candidate was recommended by a stockholder. Stockholders who wish to recommend individuals for consideration by the Nominating and Corporate Governance Committee to become nominees for election to the Board of Directors may do so by delivering a written recommendation to the Nominating and Corporate Governance Committee at the following address: 475 Brannan Street, Suite 300, San Francisco, CA 94107 not later than March 23, 2022 nor earlier than February 21, 2022; provided that if the date of next year’s annual meeting of stockholders is earlier than May 22, 2022, or later than July 21, 2022, you must give the required notice not earlier than the 120th day

prior to the meeting date and not later than the later of (i) 90th day prior to the meeting date or (ii) the 10th day following the day on which public disclosure of that meeting date is first made. Submissions must include the full name of the proposed nominee, a description of the proposed nominee’s business experience for at least the previous five years, complete biographical information, a description of the proposed nominee’s qualifications as a director and a representation that the nominating stockholder is a beneficial or record holder of our stock and has been a holder for at least one year. Any such submission must be accompanied by the written consent of the proposed nominee to be named as a nominee and to serve as a director if elected.

Historically, we have not provided a formal process related to stockholder communications with the Board of Directors. Nevertheless, every effort has been made to ensure that the views of stockholders are heard by the Board of Directors or individual directors, as applicable, and that appropriate responses are provided to stockholders in a timely manner. We believe our responsiveness to stockholder communications to the Board of Directors has been excellent.

Any interested person or stockholder may, however, communicate directly with the presiding director or the non-management or independent directors as a group. Stockholders and other interested parties may send such communication to Fastly, Inc., Attn: Paul Luongo, General Counsel and Senior Vice President, Trust, 475 Brannan Street, Suite 300, San Francisco, CA 94107. The communication should indicate that it contains a stockholder or interested party communication. All such communication will be reviewed by our General Counsel, in consultation with appropriate directors as necessary, and, if

appropriate, will be forwarded to the director or directors to whom the communications are addressed or, if none are specified, to the Lead Independent Director of our Board of Directors. If the communication is unduly frivolous, hostile, threatening or similarly inappropriate, the General Counsel shall discard the communication.

We believe that sound corporate citizenship requires us to be responsive to material environmental, social and governance (ESG)-related matters that impact our stakeholders and the communities in which we operate. As reflected in the core values of our Code of Business Conduct and Ethics, we are committed to operating our business with integrity, embracing transparency, and being good people. Consistent with these values, we expect to continue to focus more systematically on identifying and overseeing the ESG issues that have the biggest impact on our business and its stakeholders. These efforts will build on our existing programs focused on employee and workforce development, diversity and inclusion, and customer transparency.

We have adopted a Code of Business Conduct and Ethics (the “Code of Conduct”) applicable to all of our employees, executive officers, and directors. The Code of Conduct is available on our website at investors.fastly.com. The Nominating and Corporate Governance Committee of our Board of Directors is responsible for overseeing the Code of Conduct and

must approve any waivers of the Code of Conduct for executive officers and directors. If we make any substantive amendments to the Code of Conduct or grant any waiver from a provision of the Code of Conduct to any executive officer or director, we will promptly disclose the nature of the amendment or waiver on our website.

The Board of Directors has documented our governance practices by adopting Corporate Governance Guidelines to assure that the Board of Directors will have the necessary authority and practices in place to review and evaluate our business operations as needed and to make decisions that are independent of our management. The guidelines are also intended to align the interests of directors and management with those of our stockholders. The Corporate Governance Guidelines set forth the

practices the Board of Directors intends to follow with respect to board composition and selection, board meetings and involvement of senior management, Chief Executive Officer performance evaluation and succession planning, and board committees and compensation. The Corporate Governance Guidelines, as well as the charters for each committee of the Board of Directors, may be viewed on the Investors section of our website at investors.fastly.com.

This Compensation Discussion and Analysis provides an overview of the material components of our executive compensation program during 2020, including our executive compensation policies and practices, how and why the Compensation Committee arrived at the compensation decisions for our named executive officers and the key factors the Compensation Committee considered in making those decisions.

Our named executive officers for 2020, which consist of our principal executive officer, principal financial officer, and our two other most highly compensated executive officers in addition to our former Executive Vice President of Sales, who would have been one of our other three most highly compensated executive officers but for the fact that he was not employed as of December 31, 2020 (the “Named Executive Officers”), are:

On February 18, 2020, Mr. Bixby was promoted from his position of President to the role of Chief Executive Officer. In connection with Mr. Bixby’s promotion, Mr. Bergman was appointed as our Chief Architect and Executive Chairperson.

On May 5, 2020, we entered into a Transition and Separation Agreement with Mr. Maasberg, which provided that Mr. Maasberg's employment as Executive Vice President of Sales would cease as of June 16, 2020 and a transition period of service would follow until November 16, 2020, after which a consulting relationship would commence and continue through February 16, 2023, subject to certain conditions. See “Employment Arrangements—Wolfgang Maasberg.”

During a tumultuous year, 2020 was highlighted by our customers' increasing reliance upon our platform to deliver fast and reliable digital experiences, and the greater importance of security, scale, and performance, as companies continue to accelerate their digital transformations to adapt to lasting trends. We expanded our platform capabilities to meet these expectations, including the launch of our Compute@Edge offering and the addition of Signal Sciences’ powerful security products to further enhance our security offering at a time when data protection has never been more critical.

Financially, we closed out 2020 with strong execution and performance, delivering fourth quarter revenue of nearly $83 million, up 40% year-over-year. This growth was driven by continued demand for our edge platform by both new and existing customers. Additional highlights of our performance in 2020 include:

Please refer to Appendix A of this Proxy Statement for a reconciliation of non-GAAP financial measures to their corresponding GAAP measures.

The potential impact of the COVID-19 pandemic on our business, operations, and the markets and communities in which we, our partners, and our customers operate continues to be difficult to assess or predict and depends on numerous evolving factors that we may not be able to accurately predict or effectively respond to. Despite the uncertainties

Our 2020 compensation plans and payouts for our Named Executive Officers reflects our overarching philosophy of pay-for-performance. Highlights of our executive compensation program include:

Fastly’s mission is to fuel the next modern digital experience by providing developers with a programmable and reliable edge cloud platform that they adopt as their own. Our compensation philosophy and programs are designed to attract, retain and motivate talented employees who will help us realize this vision. Compensation objectives include:

We seek to achieve these objectives by providing compensation that is competitive with the practices of companies in our compensation peer group and market for executive talent, with individual pay decisions approved in the context of both Company and individual performance.

In addition, the Compensation Committee seeks to ensure that we maintain sound governance and compensation policies and practices. In designing and overseeing our executive compensation program, we strive to employ best practices and regularly assess our policies and practices.

The Compensation Committee’s goal is generally to target elements of compensation within a competitive range, using a balanced approach that does not use rigid percentiles to determine target pay levels for each compensation element. For 2020, the Compensation Committee reviewed each element of compensation described below and set the target total direct compensation opportunities of our executive officers after taking into consideration the following factors:

The Compensation Committee does not assign relative weights or rankings to any of these factors and does not solely use any quantitative formula, target percentile or multiple for establishing compensation among the executive officers or in relation to the competitive market data.

The Compensation Committee is responsible for overseeing our executive compensation program and all related policies and practices. The Compensation Committee operates pursuant to a formal written charter approved by our Board of Directors, which is available on our website at investors.fastly.com.

At least annually, the Compensation Committee reviews our executive compensation program and determines the various elements of our Named Executive Officers’ compensation, as well as any

employment arrangements with our Named Executive Officers. The Compensation Committee is responsible for taking action with respect to compensation that will attract and retain talented executives and support our long-term stockholder value creation with an effective pay-for-performance approach.

The Compensation Committee meets regularly during the fiscal year both with and without the presence of our CEO and other Named Executive Officers. The Compensation Committee also discusses

Our senior human resources and legal executives support the Compensation Committee in designing our executive compensation program and analyzing competitive market practices. In addition, members of management, including our CEO, regularly participate in Compensation Committee meetings to provide input on our compensation philosophy and objectives.

Our CEO also evaluates the performance of our executive officers and provides recommendations to

our Compensation Committee regarding the compensation of our executive officers (other than with respect to his own compensation). The Compensation Committee reviews and discusses these recommendations and proposals with our CEO and uses them as one factor in determining and approving the compensation for our Named Executive Officers. None of our executive officers attends any portion of Compensation Committee meetings at which his or her compensation is discussed.

The Compensation Committee may engage the services of outside advisors, experts and others to assist the Compensation Committee. During 2020, the Compensation Committee retained the services of Compensia, a national executive compensation consultant to advise the Compensation Committee on compensation matters related to our executive and director compensation programs. In 2020, Compensia provided the following support:

Compensia reported to and worked for the Compensation Committee. Prior to engaging Compensia, the Compensation Committee considered the specific independence factors adopted by the SEC and the NYSE and determined that Compensia is independent and that Compensia's work did not raise any conflicts of interest.

Base salary adjustments were made with reference to competitive market data and additional considerations described above, including the scope of role and individual performance of our Named Executive Officers. Mr. Bixby’s base salary increase for 2020 was approved in connection with his promotion to the role of Chief Executive Officer.

Effective February 18, 2020, Mr. Bixby and Mr. Bergman elected to receive a grant of RSUs in lieu of approximately 95% of their base salary, which would otherwise have been paid in cash. After making this election, in connection with the negotiation of their employment agreements and offer letters, their 2020 base salary was $35,568 instead of $504,000. The RSUs granted in lieu of base salary vested as to 50% of the total RSUs on August 15, 2020, and

thereafter as to 25% of the RSUs on November 15, 2020 and February 15, 2021. These RSUs are included as base salary in the 2020 Summary Compensation Table below and are listed in the 2020 Grants of Plan-Based Awards Table below.

Pursuant to their current offer letter agreements, Mr. Bixby and Mr. Bergman may each elect a similar base salary reduction and corresponding RSU award in subsequent years as long as an irrevocable election to reduce salary is made by the end of November of the year prior to the year in which base salary is to be reduced. In no event may either of Mr. Bixby or Mr. Bergman elect to reduce base salary below the applicable minimum wage. See “Employment Arrangements” below for additional information.

In 2020, we granted annual long-term incentive equity awards with multi-year vesting requirements to incentivize and reward our Named Executive Officers for long-term corporate performance based on the value of our common stock and, thereby, to align the interests of our Named Executive Officers with those of our stockholders. The annual equity awards granted to our Named Executive Officers were determined by our Compensation Committee after reviewing data from a competitive market analysis prepared by Compensia. In addition, our Compensation Committee considers the input of our CEO regarding the individual performance and pay levels for his direct reports.

In addition, our Named Executives Officers are eligible for Bonus RSUs, which vest quarterly over one year and may be granted to recognize strong individual

and/or Company performance. The Company’s Bonus RSU program is intended to support a strong pay-for-performance culture and deliver a competitive target total direct compensation profile. Bonus RSUs were granted in February 2020 to our Named Executive Officers based on their individual contributions and our Company performance during 2019, including our successful Initial Public Offering in May 2019. During 2020, the Compensation Committee also approved a grant of PSUs for Mr. Bixby and Mr. Bergman. The introduction of PSUs reflects the Compensation Committee’s commitment to a strong-pay-for-performance culture and preference for quantitative, objective goals as one component of the compensation opportunity for our most senior leaders of the Company.

In February 2021, our Compensation Committee, taking into consideration the recommendations of our CEO, approved the grant of Bonus RSUs to Mr. Luongo with a target value of $700,000. The Luongo Bonus RSUs vest in quarterly installments over a one year period with the first quarterly vesting date on May 15, 2021 and subsequent vesting dates on August 15, 2021, November 15, 2021 and February 15, 2022. The value of the award took into consideration Mr. Luongo’s significant contributions to our acquisition of Signal Sciences. As described above, our Compensation Committee periodically awards our executive officers, including our Named Executive

Officers, grants of RSUs with one-year vesting to recognize individual performance and to deliver competitive total compensation in the absence of an annual cash bonus.

In accordance with SEC requirements, the 2020 Bonus Restricted Stock Unit Grant described above will be included in the 2020 Summary Compensation Table as an element of 2021 compensation in our proxy statement filed in 2022. As a result, the grant is not reported in the 2020 Summary Compensation Table below.

Our Insider Trading Policy includes an anti-hedging provision that prohibits all of our employees, including our Named Executive Officers, and our non-employee directors from hedging the risk associated with ownership of shares of Fastly common stock and other Fastly securities, including (i) purchasing financial instruments (including prepaid variable forward contracts, equity swaps, collars and exchange

funds) or otherwise engaging in transactions that are designed to or have the effect of hedging or offsetting any decrease in the market value of Company equity securities; (ii) holding Company securities in a margin account, and (iii) engaging in derivative securities transactions or any form of short-term speculative trading in Company securities.

Our Insider Trading Policy also prohibits all employees, including our Named Executive Officers, and directors from pledging Company securities as collateral for a loan unless the employee or director clearly demonstrates financial capacity to repay the loan without resort to the pledged securities, and the General Counsel and Chief Financial Officer collectively grant an exception based on guidelines approved by the Compensation Committee. Any pledge of Company securities by a director or executive officer must be approved in advance by the Compensation Committee.

In November 2019, following approval by our Compensation Committee, Mr. Bergman, our then CEO, pledged 2,269,584 shares of our Class B

common stock as collateral to secure certain personal indebtedness. In granting the approval, the Compensation Committee considered several factors including, among others, stock volatility, loan to value ratio and his ability to repay the loan. In March 2020, following volatility of our common stock, our Compensation Committee approved Mr. Bergman's pledge of an additional 567,396 shares of our Class B common stock as collateral to secure certain personal indebtedness. None of Mr. Bergman’s shares are pledged as collateral for margin accounts. The pledged shares are not used to shift or hedge any economic risk in owning our common stock. No other executive officer or director holds shares of our common stock that have been pledged to secure any personal or other indebtedness or for any other purpose.

We maintain a tax-qualified retirement plan that provides eligible United States employees with an opportunity to save for retirement on a tax advantaged basis. Eligible employees are able to defer eligible compensation up to certain Code limits, which are

updated annually. We have the ability to make matching and discretionary contributions to the 401(k) plan, but we did not make any matching or discretionary contributions to the 401(k) plan in 2020.

We maintain the Executive Severance and Change in Control Plan (the “Executive Plan”), which provides for the provision of severance benefits to certain executive officers (including our Named Executive Officers, other than Mr. Bergman) and other key employees in the event that such employees become subject to certain involuntary terminations, as described under “Employment Arrangements” below.

The Executive Plan benefits were approved by the Compensation Committee after considering competitive market data. The Compensation Committee determined that these benefits were both competitively reasonable and necessary to recruit and retain executives and other key employees.

Enhanced severance benefits are provided for a qualifying termination that occurs in connection with a change-in-control because the severance benefits are also intended to eliminate, or at least reduce, the reluctance of executive officers and other key employees to diligently consider and pursue potential change-in-control transactions that may be in the best interests of our shareholders.

The severance benefits provided to Mr. Maasberg under the Maasberg Separation Agreement were determined in a manner consistent with the Executive Plan. For more information about the Maasberg Separation Agreement, please refer to “Employment Arrangements—Wolfgang Maasberg” below.

We also offer our employees, including our Named Executive Officers, the opportunity to purchase shares of our Class A common stock at a discount under our 2019 Employee Stock Purchase Plan, or “ESPP.” Pursuant to the ESPP, all eligible employees, including

the eligible Named Executive Officers, may allocate up to 15% of the participant’s earnings (as defined in the ESPP) for that year to purchase our Class A common stock at a 15% discount to the market price, subject to specified limits.

Currently, we do not view perquisites or other personal benefits as a significant component of our executive compensation program. Accordingly, we do not generally provide perquisites or other personal benefits to our executive officers, including the Named Executive Officers, except in situations where we believe it is appropriate to assist an individual in the performance of his or her duties, to make our executive officers more efficient and effective, and for recruitment and retention purposes. In 2020, we did pay Hart-Scott-Rodino filing fees on behalf of

Mr. Bergman. Our Named Executive Officers are eligible to receive the same employee benefits that are generally available to all of our full-time employees, subject to the satisfaction of certain eligibility requirements. This includes medical, dental, and vision benefits, flexible spending accounts, short-term and long-term disability insurance, life insurance, accidental death and dismemberment insurance, and a wellness stipend. Our employee benefits programs are designed to be affordable and competitive to the market in which we compete for talent.

Under Section 162(m) of the Internal Revenue Code (“Section 162(m)”), compensation paid to each of the Company’s “covered employees” that exceeds $1 million per taxable year is generally non-deductible. For these purposes, a “covered employee” means anyone who served as our principal executive officer at any time during the year, anyone who served as our principal financial officer at any time during the year, and any employee who is among the three highest compensated executive officers for the taxable year (other than the principal executive officer and principal financial officer), regardless of whether the executive officer is serving at the end of the public company’s taxable year and regardless of whether the executive officer’s compensation is subject to disclosure for the last completed fiscal year under the applicable SEC rules. In addition, once an individual becomes a covered employee for any taxable year beginning after December 31, 2016, that individual will remain a covered employee for all future years, including following any termination of

employment. Although the Compensation Committee will continue to consider tax implications as one factor in determining executive compensation, the Compensation Committee also looks at other factors in making its decisions and retains the flexibility to provide compensation for the our Named Executive Officers in a manner consistent with the goals of the Company’s executive compensation program and the best interests of the Company and its stockholders, which may include providing for compensation that is not deductible by the Company due to the deduction limit under Section 162(m).

In addition to considering the income tax consequences, the Compensation Committee considers the accounting consequences of its decisions, including the impact of expenses being recognized in connection with stock awards, in determining the size and form of different stock awards.