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1.	To elect the three Class I directors named in the proxy statement to serve until our 2021 Annual Meeting of Stockholders or until their successors are duly elected and qualified;

2.	To hold an advisory vote to approve the compensation of our named executive officers;

3.	To hold an advisory vote on the frequency of future stockholder advisory votes to approve the compensation of our named executive officers;

4.	To ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for the year ending December 31, 2018;

5.	To approve an amendment to the Company’s Amended and Restated Certificate of Incorporation to remove certain foreign ownership restrictions on our stock; and

6.	To transact such other business as may properly come before the Annual Meeting or any postponement or adjournment thereof.

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•	the election of the three Class I directors named in this proxy statement to serve until our 2021 Annual Meeting of Stockholders or until their successors are duly elected and qualified;

•	hold an advisory vote to approve the compensation of our named executive officers;

•	hold an advisory vote on the frequency of future stockholder advisory votes to approve the compensation of our named executive officers;

•	the ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for the year ending December 31, 2018;

•	the amendment to the Company’s Amended and Restated Certificate of Incorporation to remove certain foreign ownership restrictions on our stock; and

•	any other matters that may properly be presented at the Annual Meeting.

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•	the Class I directors are Mr. Faxon, Mr. Leiweke and Ms. Rosen, and their terms will expire at the Annual Meeting;

•	the Class II directors are Messrs. Frear, Lynton and Meyer, and their terms will expire at the Annual Meeting of Stockholders to be held in 2019; and

•	the Class III directors are Messrs. Hirschhorn, Lynch and Maffei, and their terms will expire at the Annual Meeting of Stockholders to be held in 2020.

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•	overseeing management’s maintenance of the reliability and integrity of our accounting policies and financial reporting and our disclosure practices;

•	overseeing management’s establishment and maintenance of processes to assure that an adequate system of internal control is functioning;

•	reviewing, with management and the independent registered public accounting firm, our annual and quarterly financial statements prior to their filing and prior to the release of earnings;

•	serving as a qualified legal compliance committee to review reports of violations of law;

•	overseeing the performance of the internal audit function;

•	establishing, overseeing and reviewing procedures for the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters;

•	reviewing all related-person transactions;

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•	appointing, evaluating and ensuring the independence of the independent registered public accounting firm and considering and pre-approving all audit and non-audit services proposed to be performed by the independent registered public accounting firm; and

•	discussing with the independent registered public accounting firm its responsibilities under generally accepted auditing standards, reviewing and approving the planned scope and timing of the such firm’s annual audit plan and discussing significant findings from the audit, including any problems or difficulties encountered.

•	approving, or recommending to the board of directors for approval, the compensation for our executive officers;

•	evaluating the performance of our executive officers;

•	reviewing key employee compensation policies, plans and programs;

•	preparing recommendations and periodic reports to the board of directors concerning these matters; and

•	administering our equity incentive plans.

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•	recommending persons to be selected by the board as director nominees and to fill any vacancies on the board of directors;

•	considering and recommending to the board of directors qualifications for directors and policies concerning the term of office of directors and the composition of the board of directors;

•	approving or recommending to the board of directors compensation of non-employee directors; and

•	considering and recommending to the board of directors other actions relating to corporate governance.

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(1)	Under applicable SEC rules, we have omitted Messrs. Lynch and Westergren, who each served as directors in 2017, as they also served as executive officers and did not receive additional compensation for services provided as directors.

(2)

The amount reflects the aggregate grant date fair value of the RSU awards granted during the year ended December 31, 2017, computed in accordance with FASB ASC Topic 718. There can be no assurance that awards will vest (in which case no value will be realized by the individual), or that the value upon vesting will approximate the aggregate grant date fair value. The aggregate grant date fair value for RSU awards is determined using the closing price of our common stock on the date of the grant. Each of the stock awards for Messrs. Faxon, Hirschhorn, Leiweke and Mmes. Nelson and Rosen granted in the year ended December 31, 2017 consists of 21,669 RSUs granted on August 7, 2017 when the closing price of our common stock was $8.60 per share. The stock award for Mr. Lynton granted in the year ended December 31, 2017 consists of 21,669 RSUs granted on August 9, 2017 when the closing price of our common stock was $8.55 per share. Each of the stock awards for Messrs. Frear, Meyer and Maffei granted in the year ended December 31, 2017 consists of 16,007 RSUs granted on September 22, 2017 when the closing price of our common stock was $8.23 per share.

(3)

As of December 31, 2017, none of our non-employee directors held outstanding stock options and each non-employee director held the following number of unvested stock awards: Mr. Faxon: 21,669 RSUs; Mr. Feuille: none; Mr. Frear: 16,007 RSUs; Mr. Gotcher: none; Mr. Hirschhorn: 21,669 RSUs; Mr. Leiweke: 21,669 RSUs; Mr. Lynton: 21,669 RSUs; Ms. Nelson: none; Mr. Maffei: 16,007 RSUs; Mr. Meyer: 16,007 RSUs; Ms. Rosen: 21,669 RSUs and Mr. Vinciquerra: none.

(4)	On May 12, 2017, Mr. Feuille and Mr. Gotcher each resigned from our board of directors effective immediately.

(5)	Mr. Frear, Mr. Maffei and Mr. Meyer joined our board as a non-employee director on September 22, 2017.

(6)	Mr. Hirschhorn joined our board as a non-employee director on June 21, 2017.

(7)	Mr. Lynton joined our board as a non-employee director on August 9, 2017.

(8)	Ms. Nelson resigned from our board of directors on September 22, 2017. The RSU award made to Ms. Nelson on August 7, 2017 terminated upon her resignation and the shares granted under the award, all of which were unvested, were forfeited.

(9)	On June 9, 2017, Mr. Vinciquerra resigned from our board of directors effective immediately.

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•	Board composition and size;

•	Director qualifications and responsibilities;

•	Board meetings and agenda, including meetings of non-management directors;

•	Board leadership structure;

•	Board committees;

•	Board member access to management and independent advisors;

•	Director compensation;

•	Director orientation and continuing education;

•	Management evaluation and management succession; and

•	Performance evaluation of the board of directors, its committees and individual directors.

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•	review of each director’s core competencies, independence, level of commitment, qualities, performance and professional responsibilities;

•	the composition of the board of directors and committees in light of the current challenges and needs of the board of directors and its committees, including issues of judgment, diversity, age, skills, background and experience;

•	each director’s tenure and whether new perspectives are adequately represented on the board of directors; and

•	the impact of any change in the principal occupation of existing directors.

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(1)	Shares shown in the table above include shares held in the beneficial owner’s name or jointly with others, or in the name of a bank, nominee or trustee for the beneficial owner’s account.

(2)

Information based on the Company's records, information provided by Sirius XM Radio Inc. ("Sirius"), and the most recently available Form 13D filed with the SEC on October 2, 2017 by Sirius, Sirius XM Holdings Inc. ("Sirius XM Holdings"), and Liberty Media Corporation ("Liberty"). Each of Sirius, Sirus XM Holdings and Liberty reported that it may be deemed to beneficially own 46,079,164 shares of common stock, over which each reported it has sole dispositive and voting power. Sirius directly holds 480,000 shares of our Series A redeemable convertible preferred stock that, as of October 2, 2017, were convertible into 46,079,164 shares of our common stock (taking into account accrued but unpaid dividends), or, at the option of the Company, cash. Sirius XM Holdings is the sole stockholder of Sirius. Liberty beneficially owns, directly and indirectly, approximately 70% of the outstanding common stock of Sirius XM Holdings. The Company entered into an Investment Agreement, dated as of June 9, 2017 (the "Investment Agreement"), by and between the Company and Sirius relating to the issuance and sale to Sirius of 480,000 shares of our Series A redeemable convertible preferred stock, for an aggregate purchase price of $480 million, or $1,000 per share. In accordance with the Investment Agreement, Sirius purchased (i) 172,500 shares of our Series A redeemable convertible preferred stock on June 9, 2017 for $172,500,000 and (ii) the remaining 307,500 shares of our Series A redeemable convertible preferred stock on September 22, 2017 for $307,500,000. The Company's records indicate that, as of March 7, 2018, the 480,000 shares of our Series A redeemable convertible preferred stock held by Sirius were convertible into 47,261,708 shares of common stock (taking into account accrued but unpaid dividends as of such date). The principal business address of each of Sirius and Sirius XM Holdings is 1290 Avenue of the Americas, 11th Floor, New York, New York 10104. The principal business address of Liberty is 12300 Liberty Boulevard, Englewood, Colorado 80112.

(3)

Information based on the most recently available Form 13G filed with the SEC on February 9, 2018 by The Vanguard Group, Inc. ("Vanguard"). Vanguard reported that, in its capacity as an investment adviser, it may be deemed to beneficially own 19,433,359 shares, of which it has sole dispositive power with respect to 19,287,425 shares, shared dispositive power with respect to 145,934 shares, shared voting power with respect to 27,671 shares and sole voting power with respect to 134,899 shares. These beneficially owned shares include 118,263 shares beneficially owned by Vanguard Fiduciary Trust Company, a wholly-owned subsidiary of Vanguard, and 44,307 shares beneficially owned by Vanguard Investments Australia, Ltd, a wholly-owned subsidiary of Vanguard. The address for Vanguard is 100 Vanguard Boulevard, Malvern, PA 19355.

(4)

Information based on the most recently available Form 13G/A filed with the SEC on February 14, 2018 by Eminence Capital, LP ("Eminence"). Eminence reported that, in its capacity as an investment adviser, it may be deemed to beneficially own 18,137,649 shares, over which it has shared dispositive and voting power. Eminence GP, LLC ("Eminence GP") may be deemed to beneficially own 14,920,952 of such shares, over which it shares dispositive and voting power with Eminence and Ricky C. Sandler, a U.S. citizen and Chief Executive Officer of Eminence and the Managing Member of Eminence GP. Mr. Sandler may be deemed to beneficially own 18,158,399 shares, including the shares described above, over which he has sole dispositive and voting power with respect to 20,750 shares, and shared voting and dispositive power with respect to 18,137,649 shares. The address of Eminence, Eminence GP and Mr. Sandler is 65 East 55th Street, 25th Floor, New York, NY 10022.

(5)

Information based on the most recently available Form 13G filed with the SEC on February 9, 2018 by Ontario Teachers’ Pension Plan Board (“OTPP”). OTTP reported that, in its capacity as an investment adviser, it may be deemed to beneficially own 16,000,000 shares, over which it has sole dispositive power and sole voting power. Ian Archbold may be deemed to have the power to dispose of the shares held by OTPP because of a delegation of authority from the President and Chief Executive Officer of OTPP to Mr. Archibold, and because of a delegation of authority to the President and Chief Executive Officer of OTPP from the Board of Directors of OTTP. Each such person expressly disclaims beneficial ownership of such shares. The address of OTTP is 5650 Yonge Street, 3rd Floor, Toronto, Ontario, Canada, M2M 4H5.

(6)	Mr. Herring was no longer an executive officer as of June 27, 2017.

(7)	Mr. Westergren was no longer an executive officer as of June 27, 2017.

(8)	Includes 106,294 shares of common stock held by the Mandawa Trust u/a dated 9/26/2011. Mr. Westergren is a co-trustee of this trust.

(9)	Excludes shares held by Messrs. Herring and Westergren, who are not current directors or executive officers of the Company.

(10)	Based upon 302,157,396 shares of common stock, which represents the sum of 254,895,688 shares of common stock outstanding as of March 7, 2018 and 47,261,708 shares of common stock into which preferred stock could convert as of March 7, 2018.

(11)	Based upon 302,622,365 shares of common stock, which represents the sum of 254,895,688 shares of common stock outstanding as of March 7, 2018, 464,969 shares of common stock subject to options exercisable within 60 days of March 7, 2018, 0 RSUs that vest within 60 days of March 7, 2018 and 47,261,708 shares of common stock into which preferred stock could convert as of March 7, 2018.

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•	Consolidated total revenue for 2017 was $1.47 billion, a 6% year-over-year increase. Excluding $81.7 million in revenue from Australia, New Zealand and Ticketfly, full year 2017 revenue was $1.385 billion, an 8% year-over-year increase. This included advertising revenue of $1.07 billion and subscription and other revenue of $314.3 million.

•	GAAP net loss for 2017 was $518.4 million compared to a net loss of $343.0 million in 2016. Adjusted EBITDA was a loss of $125.0 million compared to a loss of $119.5 million in 2016.

•	Total subscribers were 5.48 million at the end of 2017, growing 25% year-over-year.

•	In February 2017, Naveen Chopra was appointed as our chief financial officer.

•	In April 2017, we launched Pandora Premium, our on-demand subscription service, in the United States. Pandora Premium reached 1 million paid subscribers in October 2017.

•	Between May and September 2017, James Feuille, Peter Gotcher, Elizabeth Nelson, Tim Westergren and Anthony Vinciquerra left our board of directors, and Jason Hirschhorn, Roger Lynch and Michael Lynton joined our board of directors.

•

In June 2017, we entered into an agreement with Sirius XM to sell 480,000 shares of Series A redeemable convertible preferred stock for $1,000 per share, with gross proceeds to Pandora of $480 million. In September 2017 upon the closing of this investment, Gregory Maffei, David Frear and James Meyer—each of whom is affiliated with Sirius XM or its parent, Liberty Media—joined our board of directors, and Mr. Maffei became the chairman of our board of directors.

•	In July 2017, we discontinued operations in Australia and New Zealand to focus on the growth of our service in the United States.

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•	In September 2017, we completed the sale of Ticketfly, our ticketing service segment, to Eventbrite. Ticketfly continues to partner with Pandora to surface its live events to Pandora listeners and enable its promoters to automatically reach more fans and sell tickets in a highly-targeted way.

•	In September 2017, Roger Lynch was appointed as our chief executive officer.

•	In December 2017, Aimée Lapic was appointed as our chief marketing officer.

•	In January 2018, we announced an organizational restructuring designed to prioritize our strategic growth initiatives and optimize overall business performance. This redesign shifts resources to focus on ad-tech and audience development efforts while positioning Pandora for improved operating leverage over time.

•	Attracting highly sought-after talent in competitive labor markets;

•	Paying for demonstrable performance; and

•	Aligning employee and stockholder interests.

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•	We recruited highly qualified individuals as CEO, CFO and CMO to succeed our departing executive officers.

◦	For a detailed description of the compensation packages of Messrs. Lynch and Chopra and Ms. Lapic and the capabilities they bring to Pandora see below under "Executive Recruitment and Transition" below.

•

We structured our 2017 annual equity awards for our continuing NEOs, other than our former CEO, Mr. Westergren, so that 60% of the economic value was received in RSUs and 40% of the economic value was received in stock options. For Mr. Westergren, our Committee structured his 2017 annual equity award so that 50% of the economic value was received in RSUs and 50% of the economic value was received in stock options.

◦	Our common stock has experienced significant volatility in recent years. Our Committee believes that delivering a significant portion of our NEOs' target total direct compensation in the form of stock options is a meaningful way to align the realizable compensation of our executives with our stock price performance.

•	We granted retention RSU awards to Mr. Phillips and Mr. Trimble in July 2017, and to Mr. Chopra in August 2017 to stabilize our executive team during a period of transition following the departure of Mr. Westergren and Mr. Herring in June 2017.

•	Our Committee modified our equity grant practices by setting an overall equity budget that takes into account our stock price volatility, business growth and expansion efforts.

◦	Based on extensive data-gathering and analysis, our Committee reduced our equity award guidelines (both new-hire and annual grant guidelines) for all employees—refining its approach to considering stock price fluctuations, expected usage and competitive compensation practices.

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Cash compensation:  A $650,000 base salary and, starting in 2018, a target cash bonus opportunity under our Corporate Incentive Plan of 100% of base salary. Mr. Lynch also received a guaranteed minimum bonus for 2017 of $216,666, and a one-time cash payment of $250,000 as reimbursement of certain relocation expenses. Our Committee believed these cash amounts were reasonable and consistent with market practice.

•

Long-term equity compensation:  Our Committee determined that stock options would provide significant incentive to Mr. Lynch to drive our stock price performance. As a result, a majority of his initial equity award was granted in the form of 1,189,155 stock options, valued at $5,250,000, with a four-year vesting schedule, a ten-year term and an exercise price of $8.19 per share (which was equal to the closing price per share of the Company’s common stock on the date of grant). Mr. Lynch also received 390,157 RSUs, valued at $3,250,000, in recognition that their intrinsic value provides immediate and ongoing retention value. These RSUs also vest over four years.

•	Make-Whole Grant.  Mr. Lynch was also granted 390,157 RSUs, which vest over 15 months, to partially replace a portion of the compensation value that he forfeited by leaving his previous employer.

•	Cash compensation:  A $470,000 base salary and a target cash bonus opportunity under our Corporate Incentive Plan of 60% of base salary. Mr. Chopra also received a one-time retention bonus of $200,000. Our Committee determined these cash amounts were reasonable and consistent with market practice.

•

Long-term equity compensation:  Our Committee determined that time-based stock options would provide a significant incentive to Mr. Chopra to deliver strong financial results and help Pandora improve its long-term stock price performance. Therefore, Mr. Chopra received 191,288 stock options valued at $1,400,000, with a four-year vesting schedule, a ten-year term and an exercise price of $12.38 per share (which was equal to the closing price per share of the Company’s common stock on the date of grant). Mr. Chopra also received 436,138 RSUs that also vest over four years.

•	Cash compensation:  A $450,000 base salary and a target cash bonus opportunity under our Corporate Incentive Plan of 50% of base salary. Ms. Lapic also received a one-time retention bonus of $100,000. Our Committee determined these cash amounts were reasonable and consistent with market practice.

•

Long-term equity compensation:  Ms. Lapic received 499,002 RSUs in December 2017 that vest over four years. Per the terms of her offer letter, Ms. Lapic is also eligible to receive a performance-based equity award with a maximum value of $500,000 in spring 2018, with the type of equity award to be consistent with similar equity awards granted to similarly situated executive officers of the Company, as approved at the discretion of the Compensation Committee.

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(1)	The salary shown above is the actual 2017 salary for Mr. Lynch, who became our chief executive officer on September 18, 2017. Mr. Westergren stepped down effective June 27, 2017, and his prorated compensation for 2017 is shown below in the 2017 Summary Compensation Table.

(2)	Mr. Lynch became our chief executive officer on September 18, 2017. Per the terms of his offer letter, he received a guaranteed minimum bonus for 2017 of $216,000. No additional bonus was approved for Mr. Lynch in 2017, and he did not participate in the 2017 Corporate Incentive Plan. Beginning in 2018, Mr. Lynch is eligible for a target bonus equal to 100% of his base salary.

(3)	The approximately 1.2 million stock options granted to Mr. Lynch in 2017 had no realizable value as of December 31, 2017 because the exercise price of $8.19 is above $4.82, the closing price of our stock on December 31, 2017.

(4)	Includes company-paid relocation-related expenses of $250,000 and the remainder primarily consists of mobile phone reimbursement.

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•	Industry: internet, software-as-a service, content-oriented technology companies with an ad-based revenue model;

•	Revenue range: generally 0.5 to 2 times our revenue;

•	Market capitalization range: generally 0.25 to 4 times our market capitalization; and

•	Other growth and business factors, such as: high revenue growth, high market capitalization to revenue ratio, similar gross margin, profitability, number of employees, or business model.

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•	In September 2017, we hired a new CEO, Mr. Lynch, at a base salary of $650,000.

•	In February 2017, we hired a new CFO, Mr. Chopra, at a base salary of $470,000.

•	In December 2017, we hired a new CMO, Ms. Lapic, at a base salary of $450,000.

•	In 2017, the Committee set the base salary for our former CEO, Mr. Westergren at $550,000, a 10% increase from 2016, and increased the base salary of our former CFO and president, Mr. Herring, by 11% to $500,000. Given that Mr. Herring was serving solely as president at the time of his compensation review, the Committee evaluated his salary against chief operating officers in our peer group.

•	In 2017, the Committee increased the base salaries of our other NEOs by 3.3% and 16.3%, as shown in the table below, to bring their salaries more in line with the comparable officers at the companies in our peer group.

•	In each of these cases, our Committee independently determined that this amount was appropriate for each executive after considering the factors described above.

(1)	Salary increases for our NEOs were effective as of February 1 in 2016 and April 1 in 2017. As a result, the salaries presented in this table may vary from the base salaries presented in the 2017 Summary Compensation Table. All salaries are shown on an annualized basis and are not prorated for new hires or departures during the year.

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(1)	Mr. Lynch became our chief executive officer on September 18, 2017. Per the terms of his offer letter, he received a guaranteed minimum bonus for 2017 of $216,000. No additional bonus was approved for Mr. Lynch in 2017, and he did not participate in the 2017 CIP.

(2)	Ms. Lapic became our chief marketing officer on December 13, 2017, and was ineligible for participation in the 2017 CIP based on her start date.

(3)	The target bonus level for Mr. Trimble was set at 30% of base salary because he also participates in a separate sales compensation plan, which our Committee believes focuses him on the Company's overall financial performance as well as the performance of the sales organization for which he is responsible.

(4)	Mr. Westergren stepped down effective June 27, 2017. Under the terms of his Separation and Release Agreement, he remained eligible for a prorated bonus under the 2017 CIP with the payment not to exceed his target cash bonus opportunity.

(5)	Mr. Herring resigned his position as president effective June 27, 2017. Under the terms of his Separation and Release Agreement, he remained eligible for a prorated bonus under the 2017 CIP with the payment not to exceed his target CIP bonus.

•	Seventy percent of the bonus payout to be determined by comparing our actual revenue for 2017 to our revenue target in our board-approved 2017 financial plan; and

•	Thirty percent of the bonus payout to be determined by comparing our actual non-GAAP adjusted EBITDA excluding content costs for 2017 to the target in our 2017 board-approved financial plan.

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(1)	Calculated by multiplying the CIP Factor Payout by the CIP Weighting for each factor. The total blended payout for the 2017 CIP was 0% of target.

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•	Up to one-third of the target MSUs are eligible to be earned for a performance period that is the first calendar year of the MSU grant (the "One-Year Performance Period");

•	Up to one-third of the target MSUs are eligible to be earned for a performance period that is the first two calendar years of the MSU grant (the "Two-Year Performance Period"); and

•	Any remaining portion of the total potential MSUs are eligible to be earned for a performance period that is the entire three calendar years of the MSU grant (the "Three-Year Performance Period").

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(1)	Mr. Lynch became our chief executive officer on September 18, 2017.

(2)	Mr. Chopra became our chief financial officer on February 28, 2017. Mr. Chopra also served as interim chief executive officer from June 27, 2017 until September 18, 2017.

(3)	Ms. Lapic became our chief marketing officer on December 13, 2017.

(4)	Mr. Westergren became our chief executive officer on March 25, 2016. Under applicable SEC rules, we have excluded Mr. Westergren's compensation for 2015 because he was not a named executive officer or our chief executive officer during that year. On June 27, 2017, Mr. Westergren stepped down as our chief executive officer and left the Company.

(5)	Mr. Herring served as our chief financial officer in 2015 and 2016. Effective March 25, 2016, he took on the additional role of president. On February 28, 2017, Mr. Herring stepped down as our chief financial officer upon the hiring of his successor. Effective June 27, 2017, Mr. Herring resigned his position as our president and left the Company.

(6)

Reflects the amount paid under our Corporate Incentive Plan for the fiscal year, and, in the case of Mr. Lynch, also includes a guaranteed bonus of $216,000, which was paid in 2017 pursuant to the terms of his offer letter, in the case of Mr. Chopra, also includes $200,000 of his signing bonus, which was paid in 2017 pursuant to the terms of his offer letter, in the case of Ms. Lapic, also includes $50,000 of her signing bonus, which was paid in 2017 pursuant to the terms of her offer letter, and, in the case of Mr. Phillips, also includes $75,000 of his signing bonus, which was paid in 2015 pursuant to the terms of his offer letter. In 2017, this amount also includes the discretionary cash bonus awarded to certain named executive officers. See "Compensation Discussion and Analysis—Section 3 – Elements of Pay—Variable Cash Incentives" for more information.

(7)

The amount reflects the aggregate grant date fair value of the stock options and stock awards granted during the fiscal year, without regard to forfeitures, computed in accordance with FASB ASC Topic 718. For RSU awards, the aggregate grant date fair value is determined using the closing price of our common stock on the date of the grant. For stock options, the aggregate grant date fair value is determined using the Black-Scholes option-pricing model. The inputs to the Black-Scholes option-pricing model are our stock price on the date of grant, the expected stock price volatility over the expected term of the award, which is based on projected employee stock option exercise behaviors, the risk-free interest rate for the expected term of the award and expected dividends. Amounts reported in the "Stock Awards" column for 2016 for each of Messrs. Herring, Phillips, Trimble and Westergren include the grant date fair value of the PSU awards granted during 2016, which was approximately $5.03 per target share. The PSU awards vest based on Pandora’s stock price performance during a four-year performance period when the 90-day trailing average of Pandora’s stock price equals or exceeds $20.00 on a given vesting date. See "Compensation Discussion and Analysis—Section 3 – Elements of Pay—Long-term Equity Incentives—Equity Grants in 2016—2016 Performance Awards" for additional information. Amounts reported in the "Stock Awards" column for 2015 for each of Messrs. Herring, Phillips, Trimble and Westergren include the grant date fair value of the MSU awards granted during 2015, which was approximately $5.38 per target share. The target number of MSUs vests based on the Pandora TSR relative to the Russell 2000 Index TSR during three performance periods from 2015 to 2017 as described under "Compensation Discussion and Analysis—Section 3 – Elements of Pay—Long-term Equity Incentives—2015 Market Stock Units". The grant date fair value of the PSUs and MSUs was calculated based on the probable outcome of

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(8)	Mr. Trimble's amount represents amounts paid to him under his sales compensation plan for the fiscal year. The 2017 amounts are described under "Compensation Discussion and Analysis—Section 3 – Elements of Pay—Variable Cash Incentives—Chief Revenue Officer Compensation Plan."

(9)	Includes company-paid relocation-related expenses of $250,000 and the remainder primarily consists of mobile phone reimbursement.

(10)

The amount reported includes severance payments paid in accordance with the terms of the Executive Severance Policy as described under "2017 Potential Payments on Termination and Change in Control—2017 Severance Payments." Mr. Westergren received a cash payment of $572,927 and accelerated equity valued at $1,513,903 based on a per share price of $8.49, which was the closing market price of our common stock on June 27, 2017, less, in the case of stock options, the per share exercise price of the accelerated options (or, if the exercise price of an option is above $8.49 per share, no value was assigned). With respect to the 2015 MSU award, Mr. Westergren remained eligible for vesting at the conclusion of the three-year performance period, which concluded on December 31, 2017. The MSUs vested at 0% of the one-third vesting opportunity for the period and, as a result, no value was assigned to the 2015 MSU award. With respect to the 2016 PSU award, Mr. Westergren remains eligible for vesting through the May 15, 2018 vesting date. The amount also includes approximately $189,739 in 2017 representing the aggregate incremental costs related to personal security for Mr. Westergren and $211,432 in 2016 representing the aggregate incremental costs related to personal security for Mr. Westergren and approximately $17,200 in 2016 for aggregate incremental costs related to the use of an authorized car service for commutation and non-business events prior to the implementation of our security program covering him. The aggregate incremental cost for personal security is the full cost to Pandora for such service. The 2017 amounts are described under "Compensation Discussion and Analysis—Section 5—Other Compensation."

(11)

The amount reported consists primarily of severance payments paid in accordance with the terms of the Executive Severance Policy as described under "2017 Potential Payments on Termination and Change in Control—2016 and 2017 Severance Payments." Mr. Herring received a cash payment of $259,453 and accelerated equity valued at $939,317 based on a per share price of $8.49, which was the closing market price of our common stock on June 27, 2017, less, in the case of stock options, the per share exercise price of the accelerated options (or, if the exercise price of an option is above $8.49 per share, no value was assigned). With respect to the 2015 MSU award, Mr. Herring remained eligible for vesting at the conclusion of the three-year performance period, which concluded on December 31, 2017. The MSUs vested at 0% of the one-third vesting opportunity for the period and, as a result, no value was assigned to the 2015 MSU award. With respect to the 2016 PSU award, Mr. Herring remained eligible for vesting through the February 15, 2018 vesting date. No PSUs were earned as of this date and, as a result, no value was assigned to the 2016 PSU award.

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(1)	The amount reflects the grant date fair value of RSU awards and option awards granted during the fiscal year, computed in accordance with FASB ASC Topic 718.

(2)	Vests over a total of approximately 14 months with 50% vested on December 20, 2017 and 12.5% vested on each of February 15, 2018, May 15, 2018, August 15, 2018 and November 15, 2018. This award was intended to partially replace a portion of the compensation value that Mr. Lynch forfeited by leaving his previous employer.

(3)	Vests over a total of four years with 25% vested on August 15, 2018 and thereafter 1/16th of the total number of shares vesting quarterly.

(4)	Vests over a total of four years with 25% vested on September 18, 2018 and thereafter 1/48th of the total number of shares vesting monthly.

(5)	Vests over a total of four years with 25% vested on February 15, 2018 and thereafter 1/16th of the total number of shares vesting quarterly.

(6)	Vests over a total of four years with 25% vested on February 28, 2018 and thereafter 1/48th of the total number of shares vesting monthly.

(7)	Vests over a total of 18 months with 80% vested on August 15, 2018 and 20% vested on February 15, 2019.

(8)	Vests over a total of four years with 25% vested on November 15, 2018 and thereafter 1/16th of the total number of shares vesting quarterly.

(9)	Vests over a total of four years with 25% vested on February 15, 2018 and thereafter 1/48th of the total number of shares vesting monthly.

(10)	Vests over a total of 18 months with 50% vested on August 15, 2018 and 50% vested on February 15, 2019.

(11)

The amounts set forth for Mr. Trimble represent the target and maximum payouts under his sales compensation plan described above. Actual amounts paid for the fiscal year performance are set forth in the 2017 Summary Compensation Table above and a description of the criteria used to determine these amounts is set forth above under "Compensation Discussion and Analysis—Section 3 – Elements of Pay—Variable Cash Incentives—Chief Revenue Officer Compensation Plan."

(12)	Vests over a total of two years with 50% vested on February 15, 2018 and thereafter 1/8th of the total number of shares vesting quarterly.

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(1)	These RSUs vest quarterly at the rate of 1/8th of the total number of shares.

(2)	These RSUs vest quarterly at the rate of 1/16th of the total number of shares.

(3)	These options vest monthly at the rate of 1/48th of the total number of shares.

(4)	Vests over a total of 18 months with 80% vested on August 15, 2018 and 1/5th vesting on February 15, 2019.

(5)	Vests over a total of 18 months with 50% vested on August 15, 2018 and 1/2 vesting on February 15, 2019.

(6)

These 2016 Performance Awards, which consist of PSUs, vest based on Pandora’s stock price performance during a four-year performance period when the 90-day trailing average of Pandora’s stock price equals or exceeds $20 on a given vesting date. Twenty-five percent of the PSUs were eligible to vest on February 15, 2017, and vest thereafter in quarterly installments of 6.25% of the total number of shares granted. If the 90-day trailing average of Pandora’s common stock price does not equal or exceed $20 on a given vesting date, then the shares scheduled to vest as of such date will remain unvested until the next successive vesting date on which the $20 target has been met. Any shares that remain unearned at the final vesting date will be canceled. See "Compensation Discussion and Analysis—Section 3 – Elements of Pay—Long-term Equity Incentives—Equity Grants in 2016—2016 Performance Awards" for additional information.

(1)

These MSUs are shown at their target amount and vest in three annual installments on February 15 of 2016, 2017 and 2018, subject to the award recipient's continued service. The number of MSUs that may be earned at each installment is based on our annual relative TSR compared to that of the Russell 2000 Index over a period beginning January 1 of the year of the MSU award and ending on December 31 of the year prior to the annual installment date, as described under "Compensation Discussion and Analysis—Section 3 – Elements of Pay—Long-term Equity Incentives—2015 Market Stock Units." On each of the first two annual installments, depending on actual performance, the award recipient has the ability to earn up to one-third of the total number of MSUs granted; on the third annual installment, the award recipient has the ability to earn up to 200% of the total MSUs granted less any MSUs earned over the first two annual installments. Following the conclusion of the Three-Year Performance Period on December 31, 2017, the unearned 2015 MSUs were canceled pursuant to the terms of the grant agreement.

(1)

Includes the acceleration of 178,316 RSUs, resulting in a value realized on vesting of $1,513,903, as required by the terms of the Executive Severance Policy as described under "2017 Potential Payments on Termination and Change in Control—2017 Severance Payments." The value of Mr. Westergren's accelerated RSUs is based on $8.49 per share, which was the closing market price of our common stock on June 27, 2017.

(2)

Includes the acceleration of 110,638 RSUs, resulting in a value realized on vesting of $939,317, as required by the terms of the Executive Severance Policy as described under "2017 Potential Payments on Termination and Change in Control—2017 Severance Payments." The value of Mr. Herring's accelerated RSUs is based on $8.49 per share, which was the closing market price of our common stock on June 27, 2017.

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Non-change in control severance. If the employment of the eligible officer is terminated without cause prior to a change in control, the officer is entitled to receive six months (or 12 months in the case of our chief executive officer) of salary, health benefits and accelerated vesting of equity awards, plus a prorated annual bonus for the year of termination (based on actual performance) and outplacement services.

•

Change in control severance. If, in connection with or otherwise within 12 months (or 18 months in the case of our chief executive officer) after a change in control, the employment of the eligible officer is terminated without cause or the officer resigns for good reason (such as reduction in salary or material relocation), the officer is entitled to receive 12 months (or 18 months in the case of our chief executive officer) of salary and health benefits, 100% accelerated vesting of equity awards and the opportunity to extend the exercise period of certain stock options for up to 12 months following termination, plus a full-year target bonus for the year of termination and outplacement services.

(1)	The "cash" severance payments and benefits include, where applicable, salary multiples paid as severance, health benefits assuming a cost of $2,000 per month, outplacement services assuming a value of $5,000, and a prorated or full-year annual bonus, each as described above.

(2)

The value of accelerated vesting of equity awards is based on $4.82 per share, which was the closing market price of our stock on December 31, 2017, less, in the case of stock options, the per share exercise price of the accelerated options (or, if the exercise price of an option is above $4.82, no value was assigned), and assumes that equity awards are not assumed or substituted by the successor company.

(3)

In the case of the 2016 Performance Awards, which consist of PSUs, the amount reported assumes that the named executive remains eligible for vesting through the vesting dates that occur during the months equal to the number of months for which they are eligible for equity acceleration, as described above, but that no shares vested at such vesting dates because the performance conditions were not met. If the 90-day trailing average of Pandora’s common stock price were to equal $20.00 per share on the last vesting date at which the named executive officers would have been eligible for vesting, which would cause the performance condition to be met, equity amounts would increase as a result of the vesting of the 2016 Performance Awards by $583,340 for Mr. Phillips and $583,340 for Mr. Trimble.

(4)	In the case of PSU awards, assumes that the price per share in the hypothetical change in control transaction is equal to $4.82, which was the closing market price of our common stock on December 31, 2017. The number of PSUs earned is determined, effective immediately prior to such change in

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(1)	The "cash" severance amounts include health benefits at an aggregate cost of $22,927 in the case of Mr. Westergren and at an aggregate cost of $9,453 in the case of Mr. Herring.

(2)	Represents the actual bonus paid for the year ending December 31, 2017 in the case of Mr. Westergren and Mr. Herring.

(3)

The value of accelerated vesting of Mr. Westergren's and Mr. Herring's equity awards is based on $8.49 per share, which was the closing market price of our common stock on June 27, 2017, less, in the case of stock options, the per share exercise price of the accelerated options (or, if the exercise price of an option is above $8.49 per share, no value was assigned). With respect to the 2015 MSU award, Mr. Westergren and Mr. Herring remained eligible for vesting at the conclusion of the three-year performance period, which concluded on December 31, 2017. The MSUs vested at 0% of the one-third vesting opportunity for the period and, as a result, no value was assigned to the 2015 MSUs. With respect to the 2016 Performance Award, Mr. Westergren remains eligible for vesting through May 15, 2018 and the amounts above assume no shares vested at such vesting dates because the performance condition was not met. If the 90-day trailing average of Pandora’s stock price were to equal $20.00 per share on May 15, 2018, which would cause the performance condition to be met, equity amounts would increase as a result of the vesting of the 2016 Performance Awards by $1,250,000. With respect to the 2016 Performance Award, Mr. Herring remained eligible for vesting through February 15, 2018, although no shares vested because the performance condition was not met and, accordingly, no value was assigned to the 2016 Performance Award.

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•	the annual total compensation of the employee identified at median of our Company (other than our CEO, Mr. Lynch), was $175,138; and

•	the annual total compensation of the CEO for purposes of determining the CEO Pay Ratio was $13,158,718.

(1)	Includes the 2014 Employee Stock Purchase Plan, 2011 Long-Term Incentive Plan (the "2011 Plan"), 2004 Stock Plan (the "2004 Plan") and 2000 Stock Incentive Plan (the "2000 Plan"). The 2011 Plan replaced the 2004 Plan, which had earlier replaced the 2000 Plan.

(2)	The calculation of the weighted average exercise price does not include 20,445,063 shares subject to restricted stock units that do not have an exercise price.

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(3)

Each fiscal year (beginning with the fiscal year that commenced February 1, 2012 and ending with the fiscal year commencing January 1, 2021), the number of shares in the reserve under the 2011 Plan may be increased by the lesser of (x) 10,000,000 shares, (y) 4.0% of the outstanding shares of common stock on the last day of the prior fiscal year and (z) another amount determined by our board of directors.

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•	The audit committee has reviewed and discussed with management our audited consolidated financial statements for the year ended December 31, 2017.

•	The audit committee has discussed with Ernst & Young LLP ("EY"), our independent registered public accounting firm, the matters required to be discussed by Auditing Standard No. 1301 "Communications with Audit Committees" as amended, as adopted by the Public Company Accounting Oversight Board ("PCAOB").

•	The audit committee has discussed with EY its independence from management and the Company, including the written disclosures and the letter regarding its independence as required by PCAOB Rule 3526, "Communication with Audit Committees Concerning Independence."

•	Based on the reviews and discussions noted above, the audit committee recommended to the board of directors that our audited consolidated financial statements be included in our Annual Report on Form 10-K for the year ended December 31, 2017, for filing with the Securities and Exchange Commission.

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(1)

Audit fees include (i) fees associated with the audits of our consolidated financial statements included in our Annual Report on Form 10-K, (ii) reviews of our interim quarterly consolidated financial statements included in our Quarterly Reports on Form 10-Q, (iii) audit services provided in connection with other statutory or regulatory filings (iv) consents and other items related to Securities and Exchange Commission matters and (v) consultations regarding the adoption of new accounting standards.

(2)	Audit-related fees include assurance and related services by Ernst & Young LLP that were reasonably related to the performance of the audit or review of our financial statements and are not reported above under "Audit Fees", including attestation services related to information systems.

(3)	Tax fees include tax compliance and tax advisory services.

(4)	All other fees include subscription fees paid for access to the firm’s accounting and financial reporting research tool.

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