Stockholders' Equity (Notes)

12 Months Ended

Jun. 30, 2012

Equity [Abstract]

Stockholders' Equity

Stockholders’ Equity

Preferred Stock

In April 2001, in connection with the Company’s Stockholders’ Rights Agreement, the Company authorized the issuance of preferred stock. The preferred stock may be issued from time to time in one or more series. The Board of Directors is authorized to provide for the rights, preferences and privileges of the shares of each series and any qualifications, limitations or restrictions on these shares. As of June 30, 2012, no shares of preferred stock were outstanding.

Stockholders’ Rights Agreement

On April 26, 2012, the Board of Directors (the “Board”) of Extreme Networks, Inc. (“Extreme Networks” or the “Company”) adopted an Amended and Restated Rights Agreement (the “Restated Rights Plan”), between Extreme Networks and Computershare Shareholder Services LLC as the rights agent (the “Rights Agent”). The Restated Rights Plan governs the terms of each right (“Right”) that has been issued with respect to each share of Common Stock of Extreme Networks. Each Right initially represents the right to purchase one one-thousandth of a share of Series A Preferred Stock of Extreme Networks. The Restated Rights Plan replaces in its entirety the Rights Agreement, dated as of April 27, 2001, as amended on June 30, 2010 and April 26, 2011, between Extreme Networks and Mellon Investor Services LLC (the “Prior Rights Plan”). The Board reviewed the necessity of the provision of the Prior Rights Plan adopted to preserve the value of Extreme Networks' deferred tax assets, including its net operating loss carry forwards, with respect to its ability to fully use its tax benefits to offset future income may be limited if it experiences an “ownership change” for purposes of Section 382 of the Internal Revenue Code of 1986 as a result of ordinary buying and selling of Extreme Networks' common stock. Following its review, the Board decided it was necessary and in the best interests of Extreme Networks and its stockholders to enter into the Restated Rights Plan. The Restated Rights Plan incorporates the Prior Rights Plan and the amendments thereto into a single agreement and extends the term of the Prior Rights Plan from April 30, 2012 to April 30, 2013.

Comprehensive Income

The following are the components of comprehensive income, net of tax (in thousands):

	Year Ended
	June 30, 2012			July 3, 2011		June 27, 2010
Net income	$	15,872		$	2,713	$	227
Change in unrealized (loss) gain on investments:
Net unrealized (loss) gain on other investments	(196		)	109		(265		)
Foreign currency translation adjustments:
Beginning balance	3,448			954		912
Ending balance	(920		)	3,448		954
Foreign currency translation adjustments change	(4,368		)	2,494		42
Comprehensive income	$	11,308		$	5,316	$	4

Changes in the foreign currency translation adjustments during fiscal 2012 include the effect of the Japan subsidiary liquidation of $1.9 million.

Shares Reserved for Issuance

The following are shares reserved for issuance (in thousands):

	June 30, 2012
Employee stock purchase plan	2,571
Employee stock options	18,524
Total shares reserved for issuance	21,095