As of June 30, 2023, the Company has the following share-based compensation plans:

The 2013 Equity Incentive Plan (the “2013 Plan”) was approved by stockholders on November 20, 2013. The 2013 Plan replaced the 2005 Equity Incentive Plan (the “2005 Plan”). Under the 2013 Plan, the Company may grant stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance units, and other share-based or cash-based awards to employees and consultants. The 2013 Plan also authorizes the grant of awards of stock options, stock appreciation rights, restricted stock and restricted stock units to non-employee members of the Board of Directors and deferred compensation awards to officers, directors and certain management or highly compensated employees. The 2013 Plan authorized the issuance of 9.0 million shares of the Company’s common stock. In addition, 6.6 million shares under the 2005 Plan were transferred to the 2013 Stock Plan and were added to the number of shares available for future grant under the 2013 Plan. Prior to fiscal 2023, stockholders approved the issuance of an additional 32.2 million shares of the Company's common stock. During the year ended June 30, 2023, an additional 6.5 million shares were authorized and made available for grant under the 2013 Plan. The 2013 Plan includes provisions upon the granting of certain awards defined by the 2013 Plan as Full Value Awards in which the shares available for grant under the 2013 Plan are decremented 1.5 shares for each such award granted. Upon forfeiture or cancellation of unvested awards, the same ratio is applied in returning shares to the 2013 Plan for future issuance as was applied upon granting. As of June 30, 2023, total options and awards to acquire 10.0 million shares were outstanding under the 2013 Plan and 10.0 million shares are available for grant under the 2013 Plan. Options granted under this plan have a contractual term of seven years.

Pursuant to the acquisition of Aerohive on August 9, 2019, the Company assumed the Aerohive 2014 Equity Incentive Plan (the “Aerohive Plan”). Stock awards outstanding under the Aerohive Plan were converted into awards for Extreme shares as of the Acquisition Date at a predetermined rate pursuant to the Merger Agreement. As of June 30, 2023, total awards to acquire 2,288 shares of Extreme common stock were outstanding under the Aerohive Plan. If a participant terminates employment prior to the vesting dates, the non-vested shares will be forfeited and retired. No future grants may be made from the Aerohive Plan.

The Company had the following reserved shares of common stock for future issuance as of the dates noted (in thousands):


	June 30, 2023		June 30, 2022
2013 Equity Incentive Plan shares available for grant		9,995		11,430
Employee stock options and awards outstanding		10,038		7,616
2014 Employee Stock Purchase Plan		8,467		9,961
Total shares reserved for issuance		28,500		29,007

The following table summarizes stock option activity under all plans for the year ended June 30, 2023 (in thousands except per share amount and contractual term):


	Number of Shares		Weighted-Average Exercise Price Per Share		Weighted-Average Remaining Contractual Term (years)		Aggregate Intrinsic Value
Options outstanding at June 30, 2022		1,187	$	6.56		3.70	$	2,801
Granted		—		—
Exercised		—		—
Canceled		—		—
Options outstanding at June 30, 2023		1,187	$	6.56		2.70	$	23,136
Vested and expected to vest at June 30, 2023		1,187	$	6.56		2.70	$	23,136
Exercisable at June 30, 2023		1,147	$	6.56		2.68	$	22,366

The total intrinsic value of options exercised in fiscal years 2022 and 2021 was $4.9 million and $3.9 million, respectively. There were no options exercised during the fiscal year 2023.

There were no stock options granted during the fiscal years 2023 and 2022. As of June 30, 2023, there was $0.1 million of total unrecognized compensation cost related to unvested stock options that will be recognized over a weighted-average period of 0.17 years.

Stock awards may be granted under the 2013 Plan on terms approved by the Compensation Committee of the Board of Directors. Stock awards generally provide for the issuance of RSUs, including performance-based or market-based RSUs which vest over a fixed period of time or based upon the satisfaction of certain performance criteria or market conditions. The Company recognizes compensation expense on the awards over the vesting period based on the award’s fair value as of the date of grant. The Company does not estimate forfeitures, but accounts for them as incurred.

The following table summarizes stock award activity for the year ended June 30, 2023 (in thousands, except grant date fair value):


	Number of Shares			Weighted- Average Grant Date Fair Value		Aggregate Fair Value
Non-vested stock awards outstanding at June 30, 2022		6,429		$	9.57
Granted		7,012			15.24
Released		(3,805	)		8.49
Canceled		(785	)		12.73
Non-vested stock awards outstanding at June 30, 2023		8,851		$	14.25	$	230,564
Stock awards expected to vest at June 30, 2023		8,851		$	14.25	$	230,564

The RSUs granted under the 2013 plan vest over a period of time, generally one-to-three years, and are subject to participant's continued service to the Company. The stock awards granted during the fiscal year ended June 30, 2023 included $1.8 million RSUs including the market condition awards discussed below to named executive officers and directors.

The aggregate fair value, as of the respective grant dates of awards granted during the fiscal years ended June 30, 2023, 2022 and 2021 was $106.8 million, $50.7 million and $32.9 million, respectively.

For fiscal years ended June 30, 2023, 2022 and 2021, the Company withheld an aggregate of 1.4 million shares, 2.2 million shares, and 1.3 million shares, respectively, upon the vesting of awards, based upon the closing share price on the vesting date as settlement of the employees’ minimum statutory obligation for the applicable income and other employment taxes.

For fiscal years ended June 30, 2023, 2022 and 2021, the Company remitted cash of $21.9 million, $24.5 million and $9.2 million, respectively, to the appropriate taxing authorities on behalf of the employees. The payment of the taxes by the Company reduced the number of shares that would have been issued on the vesting date and was recorded as a reduction of additional paid-in capital in the consolidated balance sheets and as a reduction of “Payments for tax withholdings, net of proceeds from issuance of common stock” in the financing activity within the consolidated statements of cash flows.

As of June 30, 2023, there was $82.9 million in unrecognized compensation costs related to non-vested stock awards which includes the performance and market condition awards as discussed below. This cost is expected to be recognized over a weighted-average period of 1.6 years.

RSUs granted during fiscal 2023, 2022 and 2021 to named executive officers and directors totaled 1.8 million awards, 1.0 million awards and 1.6 million awards, respectively which included awards with market conditions as discussed below.

During fiscal 2023 and 2022, the Compensation Committee of the Board granted 1.2 million and 0.7 million RSUs, respectively with vesting based on market conditions (“MSUs”) to certain of the Company’s named executive officers. These MSUs will vest based on the Company’s total shareholder return (“TSR”) relative to the TSR of the Russell 2000 Index (“Index”). The MSU award represents the right to receive a target number of shares of common stock up to 150% of the original grant. The MSUs vest based on the Company’s TSR relative to the TSR of the Index over 3 years performance period subject to the grantees’ continued service through the certification of performance.

Total shareholder return is calculated based on the average closing price for the 30-trading days prior to the beginning and end of the performance periods. Performance is measured based on three periods, with the ability for up to one-third of target shares to vest after years 1 and 2 and the ability for up to the maximum of the full award to vest based on the full 3-year TSR less any shares vested based on 1- and 2- year periods. Linear interpolation is used to determine the number of shares vested for achievement between target levels.

The grant date fair value of each MSU was determined using the Monte Carlo simulation model. The weighted-average grant-date fair value of the MSUs granted during the year ended June 30, 2023 was $17.62 per share. The assumptions used in the Monte Carlo simulation included the expected volatility of 65%, risk-free rate of 3.27%, no expected dividend yield, expected term of three years and possible future stock prices over the performance period based on the historical stock and market prices. The Company recognizes the expense related to these MSUs on a graded-vesting method over the estimated term.

The weighted-average grant-date fair value of the MSUs granted during the year ended June 30, 2022 was $12.69 per share. The assumptions used in the Monte Carlo simulation included the expected volatility of 66%, risk-free rate of 0.44%, no expected dividend yield, expected term of 3 years and possible future stock prices over the performance period based on the historical stock and market prices.

The following table summarizes stock awards with market or performance-based conditions granted and the number of awards that have satisfied the relevant market or performance criteria in each period (in thousands):


	Fiscal Year 2023		Fiscal Year 2022		Fiscal Year 2021
Performance awards granted		1,221		727		475
Performance awards earned		400		158		—

On August 27, 2014, the Board of Directors approved the adoption of Extreme Network’s 2014 Employee Stock Purchase Plan (the “2014 ESPP”). On November 12, 2014, the stockholders approved the 2014 ESPP with the maximum number of shares of common stock that may be issued under the plan of 12.0 million shares. During the fiscal year ended June 30, 2022, the Board of Directors unanimously approved an amendment to the 2014 ESPP to increase the maximum number of shares that will be available for sale by 7.5 million shares, which was ratified by the stockholders of the Company at the annual meeting of stockholders held on November 4, 2021. The 2014 ESPP allows eligible employees to acquire shares of the Company’s common stock through periodic payroll deductions of up to 15% of total compensation, subject to the terms of the specific offering periods outstanding. Each purchase period has a maximum duration of six months and the maximum shares issuable for each purchase period is 1.5 million shares. The price at which the common stock may be purchased is 85% of the lesser of the fair market value of the Company’s common stock on the first day of the applicable offering period or on the last day of the respective purchase period.

During the fiscal years ended June 30, 2023 and 2022, there were 1.5 million and 2.0 million shares issued under the 2014 ESPP. As of June 30, 2023, there have been an aggregate 18.5 million shares issued under the 2014 ESPP.

Share-based compensation expense recognized in the financial statements by line-item caption is as follows (in thousands):


	Year Ended
	June 30, 2023		June 30, 2022		June 30, 2021
Cost of product revenues	$	1,856	$	1,186	$	1,209
Cost of service and subscription revenues		3,513		1,421		1,662
Research and development		14,824		9,995		9,969
Sales and marketing		22,250		15,000		12,505
General and administrative		21,029		15,760		13,706
Total share-based compensation expense	$	63,472	$	43,362	$	39,051

The Company uses the straight-line method for expense attribution, other than for the PSUs and MSUs, which may use the accelerated attribution method. The Company does not estimate forfeitures, but rather recognizes expense for those shares expected to vest and recognizes forfeitures when they occur.

The fair value of each RSU grant with market-based vesting criteria under the 2013 Plan is estimated on the date of grant using the Monte-Carlo simulation model to determine the fair value and the derived service period of stock awards with market conditions, on the date of the grant.

The fair value of each share purchase option under the Company's 2014 ESPP is estimated on the date of grant using the Black-Scholes-Merton option valuation model with the weighted average assumptions noted in the following table. The expected term of the 2014 ESPP shares is the offering period for each purchase. The risk-free rate is based upon the estimated life and is based on the U.S. Treasury yield curve in effect at the time of grant. Expected volatility is based on the historical volatility of the Company’s stock.

The weighted-average estimated per share fair value of shares under the 2014 ESPP in fiscal years 2023, 2022 and 2021, was $4.87, $3.32 and $2.47, respectively.


	Employee Stock Purchase Plan
	Year Ended
	June 30, 2023			June 30, 2022			June 30, 2021
Expected term	0.5 years			0.5 years			0.5 years
Risk-free interest rate		3.84	%		0.33	%		0.09	%
Volatility		55	%		49	%		95	%
Dividend yield		—	%		—	%		—	%

The Company provides a tax-qualified employee savings and retirement plan, commonly known as a 401(k) plan (the “Plan”), which covers the Company’s eligible employees. Pursuant to the Plan, employees may elect to reduce their current compensation up to the IRS annual contribution limit of $22,500 for calendar year 2023. Employees aged 50 or over may elect to contribute an additional $7,500. The amount contributed to the Plan is on a pre-tax basis.

The Company provides for discretionary matching contributions as determined by the Board of Directors for each calendar year. All matching contributions vest immediately. In addition, the Plan provides for discretionary contributions as determined by the Board of Directors each year. The program effective during fiscal 2023 was established to match $0.50 for every dollar contributed by the employee up to the first 6.0% of pay with annual cap of $5,000. The Company’s matching contributions to the Plan totaled $5.2 million, $4.6 million and $4.2 million, for fiscal years ended June 30, 2023, 2022 and 2021, respectively. No discretionary contributions were made in fiscal years ended June 30, 2023, 2022 and 2021.