Stock-Based Compensation and Other Long-Term Performance Incentives

6 Months Ended

Jul. 31, 2020

Share-based Payment Arrangement [Abstract]

Stock-Based Compensation And Other Long-Term Performance Incentives

STOCK-BASED COMPENSATION AND OTHER LONG-TERM PERFORMANCE INCENTIVES

The SecureWorks Corp. 2016 Long-Term Incentive Plan (the "2016 Plan") was adopted effective April 18, 2016. The 2016 Plan provides for the grant of options, stock appreciation rights, restricted stock, restricted stock units, deferred stock units, unrestricted stock, dividend equivalent rights, other equity-based awards, and cash bonus awards. Awards may be granted under the 2016 Plan to individuals who are employees, officers, or non-employee directors of the Company or any of its affiliates, consultants and advisors who perform services for the Company or any of its affiliates, and any other individual whose participation in the 2016 Plan is determined to be in the best interests of the Company by the compensation committee of the board of directors.

Under the 2016 Plan, the Company granted 45,300 and 2,473,657 restricted stock units during the three and six months ended July 31, 2020, respectively, and 114,728 and 1,273,004 restricted stock units during the three and six months ended August 2, 2019, respectively. The Company granted no restricted stock awards for the three months ended July 31, 2020 and August 2, 2019, and 454,546 and 175,000 restricted stock awards for the six months ended July 31, 2020 and August 2, 2019, respectively. The annual restricted stock unit and restricted stock awards granted during both such periods vest over a three-year period. Approximately 17% and 50% of such awards granted during the six months ended July 31, 2020 and August 2, 2019, respectively, are subject to performance conditions. As of July 31, 2020, all performance awards granted during the three months ended May 1, 2020 have been valued and are considered outstanding for accounting purposes.

The Company grants long-term cash awards to certain employees under the 2016 Plan. The employees who receive these cash awards do not receive equity awards as part of the long-term incentive program. The majority of the cash awards issued prior to fiscal 2021 are subject to various performance conditions and vest in equal annual installments over a three-year period. The cash awards issued during the three and six months ended July 31, 2020 are not subject to any performance conditions and vest in equal installments over a three-year period. The Company granted cash awards of $0.1 million and $8.2 million during the three and six months ended July 31, 2020, respectively, and $0.1 million and $7.0 million during the three and six months ended August 2, 2019, respectively. The Company recognized $1.6 million and $3.2 million of related compensation expense for the three and six months ended July 31, 2020, respectively, and $2.1 million and $3.9 million for the three and six months ended August 2, 2019, respectively.