
	Fiscal Year Ended
	February 3, 2023		January 28, 2022		January 29, 2021

	(in millions)
Stock-based compensation expense:
Cost of net revenue	$	152	$	133	$	75
Operating expenses	779		675		412
Stock-based compensation expense from continuing operations before taxes	931		808		487
Stock-based compensation expense from discontinued operations before taxes (a)	—		814		1,122
Total stock-based compensation expense before taxes	931		1,622		1,609
Income tax benefit	(163)		(296)		(313)
Total stock-based compensation expense, net of income taxes	$	768	$	1,326	$	1,296

(a) Stock-based compensation expense from discontinued operations before taxes represents VMware stock-based compensation expense and is included in income from discontinued operations, net of taxes, on the Consolidated Statements of Income for periods prior to the VMware Spin-off.

Dell Technologies Inc. 2013 Stock Incentive Plan — Employees, consultants, non-employee directors, and other service providers of the Company or its affiliates are eligible to participate in the Dell Technologies Inc. 2013 Stock Incentive Plan, as amended and restated as of July 9, 2019 (the “2013 Plan”). The 2013 Plan authorizes the Company to grant stock options, restricted stock units (“RSUs”), stock appreciation rights (“SARs”), restricted stock awards, and dividend equivalents. Stock options have been granted with option exercise prices equal to the fair market value of the Company’s Class C Common Stock and expire ten years after the grant date.

The 2013 Plan authorizes the issuance of an aggregate of 165.5 million shares of the Class C Common Stock, including 55.0 million shares automatically added to the share pool pursuant to the equitable adjustment provisions relating to the VMware Spin-off. As of February 3, 2023, there were approximately 28 million shares of Class C Common Stock available for future grants under the 2013 Plan.


	Number of Options	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term	Aggregate Intrinsic Value (a)
	(in millions)	(per share)		(in years)	(in millions)
Options outstanding as of January 31, 2020	18	$	14.82
Granted	—	—
Exercised	(12)	14.32
Forfeited	—	—
Canceled/expired	—	—
Options outstanding as of January 29, 2021	6	15.87
Granted	—	—
VMware Spin-off adjustment (b)	2	NA
Exercised	(5)	13.36
Forfeited	—	—
Canceled/expired	—	—
Options outstanding as of January 28, 2022	3	9.62
Granted	—	—
Exercised	(1)	6.99
Forfeited	—	—
Canceled/expired	—	—
Options outstanding as of February 3, 2023 (c)	2	$	10.29	2.5	$	69
Exercisable as of February 3, 2023	2	$	10.43	2.0	$	65
Vested and expected to vest (net of estimated forfeitures) as of February 3, 2023	2	$	10.32	2.4	$	69

(a) The aggregate intrinsic values represent the total pre-tax intrinsic values based on the closing price of $42.24 of the Class C Common Stock on February 3, 2023 as reported on the NYSE that would have been received by the option holders had all in-the-money options been exercised as of that date.

(b) In connection with the VMware Spin-off, and as authorized by the 2013 Plan, Dell Technologies made certain adjustments to the number of stock options and the exercise price of unexercised stock options using a conversion ratio of approximately 1.97 to 1 to preserve the intrinsic value of the awards prior to the VMware Spin-off.

The total fair value of options vested was not material for the fiscal years ended February 3, 2023, January 28, 2022, and January 29, 2021. The pre-tax intrinsic value of the options exercised was $35 million, $340 million, and $591 million for the fiscal years ended February 3, 2023, January 28, 2022, and January 29, 2021, respectively. Cash proceeds from the exercise of stock options was $5 million, $62 million, and $179 million for the fiscal years ended February 3, 2023, January 28, 2022, and January 29, 2021, respectively.

The tax benefit realized from the exercise of stock options was $8 million, $76 million, and $139 million for the fiscal years ended February 3, 2023, January 28, 2022, and January 29, 2021, respectively.

Restricted Stock — The Company’s restricted stock primarily consists of RSUs granted to employees. During the fiscal years ended February 3, 2023, January 28, 2022, and January 29, 2021, the Company granted long-term incentive awards in the form of service-based RSUs and performance-based RSUs (“PSUs”) in order to align critical talent retention programs with the interests of holders of the Class C Common Stock.

Service-based RSUs have a fair value based on the closing price of the Class C Common Stock price as reported on the NYSE on the grant date or the trade day immediately preceding the grant date, if the grant date falls on a non-trading day. The majority of such RSUs vest ratably over a three-year period. Each service-based RSU represents the right to acquire one share of Class C Common Stock upon vesting.

The PSUs granted during the periods presented are reflected as target units for performance periods not yet complete. The actual number of units that ultimately vest will range from 0% to 200% of target, based on the level of achievement of the performance goals and continued employment with the Company over a three-year performance period. Approximately half of the PSUs granted are subject to achievement of market-based performance goals based on relative total shareholder return and were valued utilizing a Monte Carlo valuation model to simulate the probabilities of achievement. The remaining PSUs are subject to internal financial measures and have fair values based on the closing price of the Class C Common Stock as reported on the NYSE on the accounting grant date.

Beginning with grants made during the fiscal year ended February 3, 2023, dividend equivalents will accrue on outstanding RSUs and PSUs when a dividend is paid to the Company’s common stockholders. Accrued dividend equivalents will be paid when the underlying RSUs and PSUs vest.


	Fiscal Year Ended
	February 3, 2023			January 28, 2022			January 29, 2021
Weighted-average grant date fair value (a)	$	73.26		$	134.01		$	40.01
Term (in years)	3			3			3
Risk-free rate (U.S. Government Treasury Note)	2.0		%	0.3		%	0.6		%
Expected volatility	39		%	43		%	47		%
Expected dividend yield	—		%	—		%	—		%

(a) Weighted-average grant date fair value for periods prior to the completion of the VMware Spin-off is calculated using pre-spin off stock prices and has not been adjusted to reflect the impact of the conversion ratio on the Class C Common Stock.


	Number of Units	Weighted-Average Grant Date Fair Value		Aggregate Intrinsic Value (a)
	(in millions)	(per unit)
Outstanding as of January 31, 2020	16	$	50.78
Granted	25	39.14
Vested	(5)	48.15
Forfeited	(3)	41.56
Outstanding as of January 29, 2021	33	43.09
Granted	13	88.13
VMware Spin-off adjustment (b)	30	NA
Vested	(13)	39.33
Forfeited	(4)	46.27
Outstanding as of January 28, 2022	59	31.67
Granted	23	48.11
Vested	(27)	29.96
Forfeited	(5)	39.26
Outstanding as of February 3, 2023 (c)	50	$	39.44	$	2,110
Vested and expected to vest, February 3, 2023	48	$	38.97	$	2,008

(a) The aggregate intrinsic value represents the total pre-tax intrinsic values based on the closing price of $42.24 of the Class C Common Stock on February 3, 2023 as reported on the NYSE that would have been received by the RSU holders had the RSUs been issued as of February 3, 2023.

(b) In connection with the VMware Spin-off, and as authorized by the 2013 Plan, Dell Technologies made certain adjustments to the number of RSUs using a conversion ratio of approximately 1.97 to 1 to preserve the intrinsic value of the awards prior to the VMware Spin-off.

The total fair value of restricted stock that vested during the fiscal years ended February 3, 2023, January 28, 2022, and January 29, 2021 was $827 million, $493 million, and $235 million, respectively, with a pre-tax intrinsic value of $1,371 million, $1,097 million, and $226 million, respectively.

As of February 3, 2023, there was $953 million of unrecognized stock-based compensation expense, net of estimated forfeitures, related to these awards expected to be recognized over a weighted-average period of approximately 1.8 years.

Dell Technologies Shares Withheld for Taxes — Beginning in the fiscal year ended February 3, 2023, shares of Class C Common Stock are generally withheld from issuance to cover employee taxes for the vesting of restricted stock units. During the fiscal years ended January 28, 2022 and January 29, 2021, shares of Class C Common Stock were withheld from issuance to cover employee taxes for both the vesting of restricted stock units and the exercise of stock options only under certain situations. For the fiscal years ended February 3, 2023, January 28, 2022, and January 29, 2021, 8 million, 0.4 million, and 0.1 million shares, respectively, were withheld to cover $388 million, $40 million, and $1 million, respectively, of employees’ tax obligations. The value of the withheld shares was classified as a reduction to common stock and capital in excess of par value.