	December 31, 2019		June 30, 2019
2013 Equity Incentive Plan shares available for grant		10,435		8,462
Employee stock options and awards outstanding		13,541		10,455
2014 Employee Stock Purchase Plan		8,862		10,085
Total shares reserved for issuance		32,838		29,002

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 December 31, 2019, total awards to acquire 1,147,232 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.

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

	Three Months Ended				Six Months Ended
	December 31, 2019		December 31, 2018		December 31, 2019		December 31, 2018
Cost of product revenue	$	402	$	217	$	652	$	395
Cost of service revenue		505		677		852		1,022
Research and development		3,260		2,797		5,695		5,139
Sales and marketing		3,511		2,983		7,230		5,342
General and administrative		2,801		2,026		4,884		3,627
Integration costs		479		—		479		—
Total share-based compensation expense	$	10,958	$	8,700	$	19,792	$	15,525

During the three and six months ended December 31, 2019, and 2018, the Company did not capitalize any share-based compensation expense in inventory, as the amounts were immaterial.

Stock awards may be granted under the 2013 Equity Incentive Plan (the “2013 Plan”) on terms approved by the Compensation Committee of the Board. Stock awards generally provide for the issuance of restricted stock units (“RSUs”) including performance or market-based RSUs which vest over a fixed period of time or based upon the satisfaction of certain performance criteria. The Company uses the straight-line method for expense attribution. The Company does not estimate forfeitures, but accounts for them as incurred.

The following table summarizes stock award activity for the six months ended December 31, 2019 (in thousands, except grant date fair value):

	Number of Shares			Weighted- Average Grant Date Fair Value		Aggregate Fair Market Value
Non-vested stock awards outstanding at June 30, 2019		7,736		$	7.67
Granted		6,017			6.86
Released		(2,474	)		7.08
Cancelled		(890	)		7.08
Non-vested stock awards outstanding at December 31, 2019		10,389		$	7.39	$	76,570
Vested and expected to vest at December 31, 2019		9,729		$	7.30	$	71,705

The following table summarizes stock option activity for the six months ended December 31, 2019 (in thousands, except per share 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, 2019		2,719		$	4.61		3.26	$	5,070
Granted		637			6.70
Exercised		(181	)		4.55
Cancelled		(23	)		4.75
Options outstanding at December 31, 2019		3,152		$	5.03		3.66	$	7,374
Vested and expected to vest at December 31, 2019		3,152		$	5.03		3.66	$	7,374
Exercisable at December 31, 2019		1,735		$	3.80		1.65	$	6,194

The fair value of each stock option grant under the 2013 Plan and 2005 Equity Incentive Plan is estimated on the date of grant using the Black-Scholes-Merton option valuation model. The Company uses 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 expected term of options granted is derived from historical data on employee exercise and post-vesting employment termination behavior. The risk-free rate is

based upon the estimated life of the option and the U.S. Treasury yield curve in effect at the time of grant. Expected volatility is based on the historical volatility on the Company’s stock. The average fair value of the options granted was $6.70.

The fair value of each RSU grant with performance-based vesting criteria (“PSUs”) 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 RSUs granted during the six months ended December 31, 2019 vest from the original grant date as to one-third (1/3) on the one-year anniversary and one-twelfth (1/12) each quarter thereafter, subject to continued service to the Company. These RSUs included 566,038 RSUs to named executive officers and directors.

During fiscal 2019 and 2018, the Company approved the grant of 0.6 million shares of stock awards each year in the form of PSU’s to named executive officers and other vice president level employees. These PSUs would be considered earned once the Company’s U.S. GAAP earnings aggregates at least $0.20 per share over two consecutive quarters (the “Performance Thresholds”). During the second quarter of fiscal 2020, the compensation committee of the Board of Directors modified the Performance Thresholds of $0.20 earnings per share over two consecutive quarters for PSUs issued in fiscal 2019 and 2018, to $0.09 earnings per share over two consecutive quarters. Upon satisfying the Performance Thresholds, the PSUs will vest with respect to the same number of RSUs that have vested which were granted on the same date and thereafter will vest on the same schedule as the RSUs, subject to continued service to the Company. If the Performance Thresholds is not met by the third anniversary of the grant date for each award, that award is canceled. During the six months ended December 31, 2019, the 2019 and 2018 Performance Thresholds for outstanding performance awards were not achieved.

The fair value of each share purchase option under the Company’s 2014 Employee Stock Purchase Plan (“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 ESPP represents the term of the offering period of each option. The risk-free rate is based upon the estimated life and on the U.S. Treasury yield curve in effect at the time of grant. Expected volatility is based on the historical volatility on the Company’s stock.

There were 1,233,434 and 1,280,708 shares issued under the ESPP during the six months ended December 31, 2019 and 2018, respectively. The following assumptions were used to calculate the fair value of shares granted under the ESPP during the following periods:

	Employee Stock Purchase Plan
	Six Months Ended
	December 31, 2019			December 31, 2018
Expected life	0.5 years			0.5 years
Risk-free interest rate		1.85	%		2.20	%
Volatility		43	%		63	%
Dividend yield		—	%		—	%

The weighted-average fair value of shares granted under the ESPP during the six months ended December 31, 2019 and 2018 was $2.02 and $2.73, respectively.