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Employee Benefit Plans (including Share-Based Compensation) (Notes) | 12 Months Ended
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Jun. 30, 2012
Share-based Compensation [Abstract] |
Employee Benefit Plans (including Share-based Compensation) | Employee Benefit Plans (including Share-based Compensation) As of June 30, 2012, the Company has the following share-based compensation plans: 2005 Equity Incentive Plan The 2005 Equity Incentive Plan (the “2005 Plan”) was adopted by the Company’s Board of Directors on October 20, 2005, and approved by stockholders on December 2, 2005. The 2005 Plan replaces the 1996 Stock Option Plan (the “1996 Plan”), 2000 Non-statutory Stock Option Plan (the “2000 Plan”) and 2001 Non-statutory Stock Option Plan (the “2001 Plan”). Under the 2005 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 2005 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 2005 Plan authorizes the issuance of up to 12,000,000 shares of the Company’s common stock and on December 23, 2009, the Company’s shareholders approved to increase the number of shares authorized by another 4,000,000 shares. In addition, up to 11,000,000 shares subject to awards outstanding under the 1996 Plan, the 2000 Plan, and the 2001 Plan that expired have been added to the number of shares available for future grant under the 2005 Plan. As of June 30, 2012, total options and awards to acquire 10,022,770 shares were outstanding under the 2005 Plan and 9,873,560 shares are available for grant under the 2005 Plan. Options granted under this plan have a contractual term of seven years. Amended 1996 Stock Option Plan The 1996 Plan was originally adopted in September 1996, and provided for the grant of options for common stock to eligible participants. A total of 56,382,867 shares were reserved under the 1996 Plan. Options granted under this plan have a contractual term of ten years. Effective December 2, 2005, the 1996 Plan was terminated, and, as of June 30, 2012, options to acquire 1,049,308 shares were outstanding under the 1996 Plan. 2000 Plan In March 2000, the Board of Directors adopted the 2000 Plan which provided for the grant of options for common stock to eligible participants. A total of 4,000,000 shares were reserved under the 2000 Plan. Options granted under this plan have a contractual term of ten years. Effective December 2, 2005, the 2000 Plan was terminated, and, as of June 30, 2012, options to acquire 74,002 shares were outstanding under the 2000 Plan. 2001 Plan In May 2001, the Board of Directors adopted the 2001 Plan which provided for the grant of options for common stock to eligible participants. A total of 4,000,000 shares were reserved under the 2001 Plan. Options granted under this plan have a contractual term of ten years. Effective December 2, 2005, the 2001 Plan was terminated, and, as of June 30, 2012, options to acquire 28,740 shares were outstanding under the 2001 Plan. The following table summarizes stock option activity under all plans:
| Number of Shares (000’s) |  | Weighted- Average Exercise Price Per Share |  | Weighted- Average Remaining Contractual Term (years) |  | Aggregate Intrinsic Value ($ 000’s)
Options outstanding at June 28, 2009 | 17,639 |  |  | $ | 4.65 |  |  |  |  |
Granted | 936 |  |  | $ | 2.31 |  |  |  |  |
Exercised | (337 | ) |  | $ | 2.20 |  |  |  |  |
Canceled | (8,652 | ) |  | $ | 4.94 |  |  |  |  |
Options outstanding at June 27, 2010 | 9,586 |  |  | $ | 4.24 |  |  |  |  |
Granted | 2,748 |  |  | $ | 3.28 |  |  |  |  |
Exercised | (606 | ) |  | $ | 2.52 |  |  |  |  |
Canceled | (2,596 | ) |  | $ | 4.40 |  |  |  |  |
Options outstanding at July 3, 2011 | 9,132 |  |  | $ | 4.01 |  |  |  |  |
Granted | 2,593 |  |  | $ | 3.30 |  |  |  |  |
Exercised | (437 | ) |  | $ | 2.24 |  |  |  |  |
Canceled | (2,282 | ) |  | $ | 4.85 |  |  |  |  |
Options outstanding at June 30, 2012 | 9,006 |  |  | $ | 3.68 |  |  | 4.87 |  |  | 2,280 |
Exercisable at June 30, 2012 | 5,538 |  |  | $ | 3.94 |  |  | 4.20 |  |  | 1,545 |
Vested and expected to vest at June 30, 2012 | 8,697 |  |  | $ | 3.70 |  |  | 4.82 |  |  | 2,226 |
The following table summarizes significant ranges of outstanding and exercisable options at June 30, 2012:
Options Outstanding |  | Options Exercisable
Range of Exercise Prices | Number Outstanding (000’s) |  | Weighted- Average Remaining Contractual Life |  | Weighted- Average Exercise Price |  | Number Exercisable (000’s) |  | Weighted- Average Exercise Price
|  |  | (In years) |  |  |  |  |  |
$1.69 – $2.82 | 983 |  |  | 5.93 |  |  | $ | 2.12 |  |  | 904 |  |  | $ | 2.12 |
$2.95 – $3.02 | 249 |  |  | 5.89 |  |  | $ | 2.99 |  |  | 152 |  |  | $ | 3.00 |
$3.03 – $3.03 | 1,217 |  |  | 5.13 |  |  | $ | 3.03 |  |  | 567 |  |  | $ | 3.03 |
$3.17 – $3.25 | 383 |  |  | 4.54 |  |  | $ | 3.21 |  |  | 140 |  |  | $ | 3.17 |
$3.29 – $3.29 | 1,881 |  |  | 6.08 |  |  | $ | 3.29 |  |  | 97 |  |  | $ | 3.29 |
$3.43 – $3.68 | 1,210 |  |  | 4.93 |  |  | $ | 3.61 |  |  | 735 |  |  | $ | 3.58 |
$3.74 – $4.18 | 955 |  |  | 4.71 |  |  | $ | 3.86 |  |  | 864 |  |  | $ | 3.86 |
$4.22 – $4.22 | 7 |  |  | 3.16 |  |  | $ | 4.22 |  |  | 7 |  |  | $ | 4.22 |
$4.25 – $4.25 | 935 |  |  | 4.15 |  |  | $ | 4.25 |  |  | 886 |  |  | $ | 4.25 |
$4.26 – $9.80 | 1,186 |  |  | 2.31 |  |  | $ | 6.05 |  |  | 1,186 |  |  | $ | 6.05 |
$1.69 – $9.80 | 9,006 |  |  | 4.87 |  |  | $ | 3.68 |  |  | 5,538 |  |  | $ | 3.94 |
The total intrinsic value of options exercised in fiscal 2012, fiscal 2011 and fiscal 2010 were $0.5 million, $0.5 million, and $0.2 million, respectively. The fair value of options vested in fiscal 2012, fiscal 2011 and fiscal 2010 were $2.3 million, $1.0 million, and $1.4 million, respectively. Stock Awards Stock awards may be granted under the 2005 Plan on terms approved by the Board of Directors. Stock awards generally provide for the issuance of restricted stock which vests over a fixed period. The following table summarizes stock award activity:
| Number of Shares (000’s) |  | Weighted- Average Grant- Date Fair Value
Non-vested stock outstanding at June 28, 2009 | 796 |  |  | $ | 3.37 |
Granted | 2,965 |  |  | $ | 2.77 |
Vested | (702 | ) |  | $ | 2.91 |
Cancelled | (179 | ) |  | $ | 2.40 |
Non-vested stock outstanding at June 27, 2010 | 2,880 |  |  | $ | 2.92 |
Granted | 818 |  |  | $ | 3.18 |
Vested | (1,376 | ) |  | $ | 3.21 |
Cancelled | (452 | ) |  | $ | 3.03 |
Non-vested stock outstanding at July 3, 2011 | 1,870 |  |  | $ | 2.79 |
Granted | 739 |  |  | $ | 3.11 |
Vested | (1,233 | ) |  | $ | 3.28 |
Cancelled | (298 | ) |  | $ | 3.17 |
Non-vested stock outstanding at June 30, 2012 | 1,078 |  |  | $ | 2.35 |
The shares were placed in an escrow account and will be released to the recipients as the shares vest over periods of up to twenty-four months. If a participant terminates employment prior to the vesting dates, the unvested shares will be canceled and returned to the 2005 Plan. The Company recognizes compensation expense on the awards over the vesting period based on an intrinsic value as of the date of grant. As of June 30, 2012, there were approximately $2.2 million in unrecognized compensation costs related to non-vested stock awards. This cost is expected to be recognized over a weighted-average period of approximately 1.3 years. 1999 Employee Stock Purchase Plan In January 1999, the Board of Directors approved the adoption of Extreme Network’s 1999 Employee Stock Purchase Plan (the “Purchase Plan”). On December 2, 2005, the stockholders approved an amendment to the Purchase Plan to increase the maximum number of shares of common stock that may be issued under the plan by 5,000,000 to a total of 12,000,000 shares. The Purchase Plan permits eligible employees to acquire shares of the Company’s common stock through periodic payroll deductions of up to 15% of total compensation. No more than 625 shares may be purchased on any purchase date per employee. Each offering period has a maximum duration of 3 months. 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. On January 26, 2010, the Board of Directors approved an amendment to the Purchase Plan to increase the maximum number of shares that may be purchased on any purchase date per employee from 625 shares to 1,000 shares. Through June 30, 2012, 9,428,787 shares had been purchased under the Purchase Plan. Share Based Compensation Share-based compensation expense recognized in the financial statements by line item caption is as follows (dollars in thousands):
| Year Ended
| June 30, 2012 |  | July 3, 2011 |  | June 27, 2010
Cost of product revenue | $ | 463 |  |  | $ | 435 |  |  | $ | 489 |
Cost of service revenue | 257 |  |  | 232 |  |  | 523 |
Sales and marketing | 1,765 |  |  | 1,948 |  |  | 1,853 |
Research and development | 1,363 |  |  | 1,113 |  |  | 1,695 |
General and administrative | 2,341 |  |  | 1,520 |  |  | 1,675 |
Total share-based compensation expense | 6,189 |  |  | 5,248 |  |  | 6,235 |
The amount of stock based compensation expense capitalized in inventory has been immaterial for each of the periods presented. As of June 30, 2012, there was $4.3 million of total unrecognized compensation cost related to unvested stock options. This cost is expected to be recognized over a weighted-average period of approximately 2.5 years. The weighted-average grant-date per share fair value of options granted in fiscal 2012, fiscal 2011, and fiscal 2010 were $1.67, $1.57, and $0.94, respectively. The weighted-average estimated per share fair value of shares purchased under the Company’s 1999 Employee Stock Purchase Plan (“ESPP”) in fiscal 2012, fiscal 2011, and fiscal 2010 were $0.98, $0.98, and $0.66, respectively. The Company uses the straight-line method for expense attribution, and the Company estimates forfeitures and only recognizes expense for those shares expected to vest. The Company’s estimated forfeiture rate in fiscal 2012 based on the Company’s historical forfeiture experience is approximately 9% for non-executives and 7% for executives. The fair value of each option award and share purchase option under the Company's 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 options granted is derived from historical data on employee exercise and post-vesting employment termination behavior. The expected term of ESPP represents the contractual life of the ESPP purchase period. The risk-free rate based upon the estimated life of the option and ESPP is based on the U.S. Treasury yield curve in effect at the time of grant. Expected volatility is based on both the implied volatilities from traded options on the Company’s stock and historical volatility on the Company’s stock.
| Stock Option Plan |  | Employee Stock Purchase Plan
| Year Ended |  | Year Ended
| June 30, 2012 |  | July 3, 2011 |  | June 27, 2010 |  | June 30, 2012 |  | July 3, 2011 |  | June 27, 2010
Expected life | 5.06 yrs |  |  | 4.43 yrs |  |  | 3.03 yrs |  |  | .25 yrs |  |  | .24 yrs |  |  | .25 yrs |
Risk-free interest rate | 1.05 | % |  | 1.47 | % |  | 1.36 | % |  | 0.07 | % |  | 0.17 | % |  | 0.20 | %
Volatility | 60 | % |  | 62 | % |  | 59 | % |  | 61 | % |  | 55 | % |  | 73 | %
Dividend yield | 0.0 | % |  | 0.0 | % |  | 0.0 | % |  | 0.0 | % |  | 0.0 | % |  | 0.0 | %
Employee Stock Option Exchange Program On December 23, 2009, the Company’s stockholders approved a voluntary program (“Exchange Program”) that permitted eligible employees to exchange certain outstanding stock options that were “underwater” for a lesser number of shares of restricted stock units to be granted under the Extreme Networks, Inc. 2005 Equity Incentive Plan (the “2005 Plan”) and to exchange certain other stock options that are more substantially underwater for a cash payment. The Exchange Program was open to all of the Company’s United States employees, except for members of its Board of Directors and its executive officers. The Exchange Program commenced on February 4, 2010 and ended March 4, 2010. On March 5, 2010, the Company canceled a total of 3,058,761 tendered stock options, issued a total of 569,189 replacement restricted stock units under the 2005 Plan, and incurred a cash outlay of $8,769 which was paid out at the end of March 2010. 401(k) Plan 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 $17,000 for calendar year 2012. Effective January 1, 2005, employees age 50 or over may elect to contribute an additional $5,500. 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 was to match $0.50 for every dollar contributed by the employee up to the first 2.5% of pay. The Company’s matching contributions to the Plan totaled $475,025, $569,825, and $0, for fiscal 2012, fiscal 2011 and fiscal 2010, respectively. No discretionary contributions were made in fiscal 2012, fiscal 2011 and fiscal 2010.

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- Definition The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 14 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6406099&loc=d3e25284-112666 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher AICPA -Name Statement of Position (SOP) -Number 93-6 -Paragraph 53 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 40 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6418621&loc=d3e17540-113929 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 123R -Paragraph 64, 65, A240 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901 + Details
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