STOCK-BASED COMPENSATION AND OTHER LONG-TERM PERFORMANCE INCENTIVES

3 Months Ended

Apr. 29, 2022

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") 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, during the three months ended April 29, 2022 and April 30, 2021, the Company granted 3,650,524 and 1,848,963 restricted stock units, respectively, and zero and 484,825 restricted stock awards, respectively. The annual

restricted stock unit and restricted stock awards granted during both such periods vest over a three-year period. Approximately 19% and 27% of such awards granted during the three months ended April 29, 2022 and April 30, 2021, respectively, are subject to performance conditions. All 1,848,963 restricted stock units granted during the three months ended April 30, 2021 were subject to stockholder approval at the Company’s 2021 annual meeting held on June 21, 2021 of an amendment to the 2016 Plan to increase the number of shares of Class A common stock issuable under the plan by 5,000,000 shares. Such stockholder approval was obtained and those awards were deemed granted and outstanding for accounting purposes in the second quarter of fiscal 2022.

The Company grants long-term cash awards to certain employees under the 2016 Plan. A portion of the cash awards issued prior to fiscal 2021 were subject to various performance conditions and vest in equal annual installments over a three-year period. The Company granted no cash awards during the three months ended April 29, 2022 compared to $7.5 million of cash awards granted during the three months ended April 30, 2021 that vest in equal installments over a three-year period. The Company recognized $1.4 million and $1.6 million of related compensation expense for the three months ended April 29, 2022 and April 30, 2021, respectively.