As of June 30, 2022, 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, up to 12.7 million shares subject to stock options and awards available for issuance under the 2005 Plan may be transferred to the 2013 Stock Plan and would be added to the number of shares available for future 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. During the year ended June 30, 2022 an additional 7.9 million shares were authorized and made available for grant under the 2013 Plan. As of June 30, 2022, total options and awards to acquire 7.6 million shares were outstanding under the 2013 Plan and 11.4 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, 2022, total awards to acquire 2,578 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.

	June 30, 2022		June 30, 2021
2013 Equity Incentive Plan shares available for grant		11,430		6,753
Employee stock options and awards outstanding		7,616		10,359
2014 Employee Stock Purchase Plan		9,961		4,414
Total shares reserved for issuance		29,007		21,526

The following table summarizes stock option activity under all plans (shares and intrinsic value in thousands):

	Number of Shares			Weighted-Average Exercise Price Per Share		Weighted-Average Remaining Contractual Term (years)		Aggregate Intrinsic Value
Options outstanding at June 30, 2021		1,645		$	5.44		3.62	$	9,404
Granted		—			—
Exercised		(458	)		2.54
Cancelled		—			—
Options outstanding at June 30, 2022		1,187		$	6.56		3.70	$	2,801
Vested and expected to vest at June 30, 2022		1,187		$	6.56		3.70	$	2,801
Exercisable at June 30, 2022		988		$	6.53		3.60	$	2,359

The total intrinsic value of options exercised in fiscal years 2022, 2021 and 2020 was $4.9 million, $3.9 million and $0.6 million, respectively.

There were no stock options granted during the fiscal years 2022 and 2021. The weighted average estimated fair value of stock options granted in fiscal year 2020 was $3.52 per share. As of June 30, 2022, there was $0.7 million of total unrecognized compensation cost related to unvested stock options that will be recognized over a weighted-average period of 1.2 years.

During the first quarter of fiscal 2019, the Company granted 851,700 Performance Stock Options (“PSOs”) to certain officers and executive vice presidents that will vest if the Company’s stock price achieves a price hurdle of $10.00 during the three-year performance period from August 29, 2018 through August 31, 2021. The price hurdle will be deemed to have been achieved if, at any time over the performance period, the Company’s stock maintains a price of $10.00 for 30 consecutive days. If the price hurdle is achieved, the PSOs will vest (ratably based upon the time elapsed between August 31, 2018 and the date the hurdle is met) and the remainder will vest quarterly through August 31, 2021. The grant date fair value of these PSOs was $2.62.

During the fourth quarter of fiscal 2021, the price hurdle was achieved and 550,300 PSOs remain outstanding as of June 30, 2022 and 2021.

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 restricted stock units (“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 intrinsic value as of the date of grant.

The following table summarizes stock award activity (shares and market value in thousands):

	Number of Shares			Weighted- Average Grant Date Fair Value		Aggregate Fair Value
Non-vested stock awards outstanding at June 30, 2021		8,714		$	5.51
Granted		4,448			11.39
Released		(6,235	)		5.38
Cancelled		(498	)		7.22
Non-vested stock awards outstanding at June 30, 2022		6,429		$	9.57	$	57,347
Stock awards expected to vest at June 30, 2022		6,429		$	9.57	$	57,347

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 aggregate fair value, as of the respective grant dates of awards granted during the fiscal years ended 2022, 2021 and 2020 was $50.7 million, $32.9 million and $45.9 million, respectively.

For fiscal years ended 2022, 2021 and 2020, the Company withheld an aggregate of 2.2 million shares, 1.3 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 2022, 2021 and 2020, the Company remitted cash of $24.5 million, $9.2 million and $8.0 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 “Proceeds from issuance of common stock” in the financing activity within the consolidated statements of cash flows.

As of June 30, 2022, there was $42.9 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 2022 and 2021 to named executive officers and directors totaled 1.0 million awards and 1.6 million awards, respectively which included awards with market conditions as discussed below. RSUs granted during fiscal 2020 included 0.6 million RSUs to named executive officers and directors.

During fiscal 2022 and 2021, the Compensation Committee of the Board granted 0.7 million and 0.5 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 performance periods from August 15, 2020 through August 15, 2023, 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, 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 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, 2021 was $5.32 per share. The assumptions used in the Monte-Carlo simulation included the expected volatility of 69%, risk-free rate of 0.18%, 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 2022		Fiscal year 2021		Fiscal year 2020
Performance awards granted		727		475		—
Performance awards earned		158		—		56

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 replaced the 1999 Employee Stock Purchase Plan. 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, 2022 and 2021, there were 2.0 million and 2.9 million shares issued under the 2014 ESPP. As of June 30, 2022, there have been an aggregate 17.0 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, 2022		June 30, 2021		June 30, 2020
Cost of product revenues	$	1,186	$	1,209	$	1,240
Cost of service and subscription revenues		1,421		1,662		1,620
Research and development		9,995		9,969		10,324
Sales and marketing		15,000		12,505		11,914
General and administrative		15,760		13,706		12,265
Total share-based compensation expense	$	43,362	$	39,051	$	37,842

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 stock option grant under the Company’s 2013 Plan is estimated on the date of grant that uses the Black-Scholes-Merton option valuation model with the weighted average assumptions noted in the following table. 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 is based on the U.S. Treasury yield curve in effect at the time of grant. Expected volatility is based on a blended rate of the implied volatilities from traded options on the Company’s stock and historical volatility on the Company’s stock.

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 on the Company’s stock.

The weighted-average estimated per share fair value of shares under the 2014 ESPP in fiscal years 2022, 2021 and 2020, was $3.32, $2.47 and $1.90, respectively.

	Employee Stock Purchase Plan
	Year Ended
	June 30, 2022			June 30, 2021			June 30, 2020
Expected life	0.5 years			0.5 years			0.5 years
Risk-free interest rate		0.33	%		0.09	%		1.71	%
Volatility		49	%		95	%		43	%
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 $20,500 for calendar year 2022. Employees aged 50 or over may elect to contribute an additional $6,500. 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 2022 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 $4,000. The Company’s matching contributions to the Plan totaled $4.6 million, $4.2 million and $3.2 million, for fiscal years ended 2022, 2021 and 2020, respectively. No discretionary contributions were made in fiscal years ended 2022, 2021 and 2020.