Stock-Based Compensation |
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Stock-Based Compensation | STOCK-BASED COMPENSATION Stock-Based Compensation Expense The components of stock-based compensation expense recognized in the condensed consolidated statements of operations consisted of the following (in thousands):
Restricted Stock Units A summary of our RSU activity is as follows:
As of July 31, 2022, we had unrecognized stock-based compensation expense related to unvested RSUs of $289.3 million that is expected to be recognized on ratably over a weighted-average period of 3.4 years. Stock Options A summary of our stock option activity is as follows:
As of July 31, 2022, we had unrecognized stock-based compensation expense related to unvested options of $134.1 million that is expected to be recognized on ratably over a weighted-average period of 2.4 years. Milestone Options In March 2021, we granted options to purchase 1,404,605 shares of Class B common stock subject to service-based, performance-based, and market-based vesting conditions to our Chief Executive Officer and Chief Financial Officer under the 2013 Plan. These stock options will vest 100% upon the occurrence of our initial public offering (IPO) (the performance-based vesting condition) and the achievement of certain milestone events and our share price targets (the market-based vesting conditions), subject to the executive’s continued service to us from the grant date through the milestone events. For these options, we used a Monte Carlo simulation to determine the fair value at the grant date and the implied service period. During the three and six months ended July 31, 2022, we recorded $0.9 million and $1.8 million, respectively, of stock-based compensation expense related to these milestone options. During the three and six months ended July 31, 2021, we recorded $1.2 million of stock-based compensation expense. As of July 31, 2022, we had unrecognized stock-based compensation expense related to these milestone options of $14.5 million that is expected to be recognized over the remaining vesting period of 4.1 years. Performance Share Units In connection with the acquisition of Attivo, we granted 71,003 shares of performance share units (PSUs) subject to service-based and performance-based vesting conditions. These PSUs will vest 100% upon the achievement of certain financial performance and integration milestone events, subject to the employees’ continued service to us from the grant date through the milestone events or target dates. During the three and six months ended July 31, 2022, we recorded $0.2 million of stock-based compensation expense related to these PSUs. As of July 31, 2022, we had unrecognized stock-based compensation expense related to these PSUs of $1.4 million that is expected to be recognized over the remaining vesting period of 1.4 years. Restricted Common Stock In connection with the acquisition of Attivo, restricted common stock was issued to Attivo employees. See Note 5, Acquisitions, in the notes to our condensed consolidated financial statements for more information regarding these restricted common stock. In connection with the acquisition of Scalyr, Inc. (Scalyr), we issued 1,315,099 shares of restricted common stock with a fair value of $14.59 per share at the time of grant, that vest over a period of two years. During the three and six months ended July 31, 2022, we recorded $2.1 million and $4.2 million, respectively, of stock-based compensation expense related to restricted common stock in connection with our acquisition of Scalyr. During the three and six ended July 31, 2021, we recorded $3.1 million and $5.5 million, respectively, of stock-based compensation expense. As of July 31, 2022, we had unrecognized stock-based compensation expense related to this restricted common stock of $4.4 million that is expected to be recognized over the remaining vesting period of 0.5 years. Employee Stock Purchase Plan (ESPP) The Company recognized stock-based compensation expense related to ESPP of $3.8 million and $6.5 million, respectively, during the three and six months ended July 31, 2022. The Company recognized stock-based compensation expense related to ESPP of $1.0 million during both the three and six months ended July 31, 2021. During the three months ended July 31, 2022 we recorded $0.2 million in expense related to modification of our ESPP as a result of the decrease in our stock price which triggered a reset of the ESPP offering period in accordance with our plan. We expect to record a total of $1.3 million in expense related to this modification through the second quarter of 2024. Attivo Acquisition In connection with the Acquisition, we granted 539,795 shares of restricted stock units (RSUs) under our 2021 Equity Incentive Plan that will vest over a period of 3 years contingent on continued employment of certain Attivo employees, for which stock-based compensation expense will be recognized ratably over the vesting period. Attivo Equity Incentive Plan In connection with our acquisition of Attivo Networks which closed in May 2022, we assumed unvested stock options that were granted under the Attivo 2011 Equity Incentive Plan ("Attivo Plan"). We do not intend to grant any additional shares under the Attivo Plan and the Attivo Plan will continue to govern the terms and conditions of the outstanding awards previously granted thereunder. Any shares underlying stock options that are expired, canceled, forfeited or repurchased under the Attivo Plan will be automatically transferred to the Company’s 2021 Equity Incentive Plan and be available for issuance as Class A common stock.
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