11.

SHARE-BASED COMPENSATION

The Company maintains a share-based compensation plan, the 2010 Employee, Director and Consultant Equity Incentive Plan, as amended (the “2010 Plan”), that has been approved by the Company’s shareholders. The 2010 Plan allows the Company, under the direction of the Compensation Committee of the Board of Directors, to make grants of stock options, restricted and unrestricted stock awards and other stock-based awards to employees, consultants and directors. On December 5, 2013, the shareholders approved an amendment to the 2010 Plan to set the number of shares available for grant to 3.5. As of June 30, 2015, a total of 2.2 shares of common stock are available for issuance under the 2010 Plan. In addition, as of June 30, 2015, the Company may grant up to 4.4 additional shares under the 2010 Plan if options previously granted under the Company’s terminated 2003 Employee, Director and Consultant Option Plan are cancelled or expire in the future without the issuance of shares of common stock by the Company. The exercise price of options granted in 2015, 2014 and 2013 was equivalent to the fair market value of the stock at the date of grant. The number of shares, terms, and vesting periods are determined by the Company’s board of directors or a committee thereof on an option-by-option basis. Options generally vest ratably over service periods of four years. Options granted after December 5, 2012 expire eight years from the date of grant, and options granted prior to that date generally expire ten years from the date of grant. In September 2014, the Company began issuing restricted stock units (“RSUs”) in lieu of stock options. RSUs generally vest ratably over four years on the anniversary date of the grant to all employees and directors. The number of RSUs awarded to certain executive officers may be reduced if certain additional performance metrics are not met.

The fair value of each option grant is estimated on the date of the grant using the Black-Scholes option-pricing model with the following weighted-average assumptions used for grants for the fiscal year ended June 30:


	2015			2014			2013
Risk-free interest rate		1.6	%		1.6	%		0.8	%
Expected dividend yield		0	%		0	%		0	%
Expected lives (in years)		4.1 - 4.7			4.1 - 4.7			4.2 - 4.7
Expected volatility		40	%		40	%		44	%

Expected option lives and volatilities are based on historical data of the Company and other factors.

Stock Options

A summary of option activity is as follows for the fiscal years ended June 30:


	2015					2014					2013
	Number of shares			Weighted average exercise price		Number of shares			Weighted average exercise price		Number of shares			Weighted average exercise price
Options outstanding at beginning of year		14.2		$	23.30		14.4		$	21.75		15.2		$	19.32
Options granted		—		$	—		3.3		$	26.52		3.0		$	27.09
Less:
Options exercised		(1.2	)	$	20.17		(3.1	)	$	19.44		(3.5	)	$	15.65
Options canceled or expired		(0.5	)	$	25.98		(0.4	)	$	24.30		(0.3	)	$	22.26

Options outstanding at end of year		12.5		$	23.49		14.2		$	23.30		14.4		$	21.75

Options exercisable at end of year		9.6		$	22.80		7.1		$	21.90		7.5		$	20.51
Options vested and expected to vest		12.5		$	23.49		13.4		$	23.12		13.5		$	21.58
Weighted average fair value of options granted during the year				$	—				$	10.04				$	9.87

The following table summarizes information about stock options outstanding at June 30, 2015:


Range of exercise prices	outstanding at June 30, 2015		average remaining contractual life (years)		Weighted average exercise price		exercisable at June 30, 2015		Weighted average exercise price
$7.27 - 19.47		4.0		5.02	$	17.49		3.6	$	17.30
$20.01 - 26.49		4.9		5.52	$	24.95		3.3	$	24.29
$26.84 - 30.34		3.6		6.16	$	28.12		2.7	$	28.44
$30.53 - 37.73		—		6.17	$	34.02		—	$	32.74

		12.5		5.54	$	23.49		9.6	$	22.80

Options exercisable at June 30, 2015 had a weighted average remaining contractual life of 5.25 years.

As of June 30, 2015, there was $15.7 of total unrecognized share-based compensation expense related to stock options that will be recognized over a weighted-average period of 1.60 years.

Restricted Stock Units

A summary of RSU activity is as follows:


	2015
	Number of shares		Weighted average grant date fair value
RSUs outstanding at beginning of year		—	$	—
RSUs granted		1.2	$	37.66
Less:
RSUs vested		0.0	$	34.22
RSUs canceled		0.2	$	38.12

RSUs outstanding at end of year		1.0	$	37.63

As of June 30, 2015, there was $20.8 of total unrecognized share-based compensation expense related to RSUs that will be recognized over a weighted-average period of 2.67 years.

Share-based compensation expense recognized and included in the consolidated statements of operations for the fiscal years ended June 30, 2015, 2014 and 2013 was as follows:


	Years Ended June 30,
	2015		2014		2013
Cost of molecular diagnostic testing	$	0.9	$	0.8	$	1.0
Cost of pharmaceutical and clinical services		0.5		0.3		0.2
Research and development expense		4.3		5.4		3.3
Selling, general, and administrative expense		40.0		27.5		22.1

Total share-based compensation expense	$	45.7	$	34.0	$	26.6

In October 2014, the Company and its former Chief Financial Officer entered into a resignation agreement under which the vesting of certain awards were modified such that the specified awards were vested in full. As a result of this award modification the Company recognized approximately $3.1 in share-based compensation expense for year ended June 30, 2015.

In February 2015, the Company and its former Chief Executive Officer entered into a resignation agreement under which the vesting of certain awards were modified such that the specified awards were accelerated. As a result of this award modification the Company recognized approximately $12.8 in share-based compensation expense for year ended June 30, 2015.

The Company has unrecognized share-based compensation cost related to share-based compensation granted under its current plans. The estimated unrecognized share-based compensation cost and related weighted average recognition period, aggregate intrinsic value of options outstanding, aggregate intrinsic value of options that are fully vested and aggregate intrinsic value of RSUs vested and expected to vest is as follows:


	As of June 30, 2015
Unrecognized share-based compensation cost	$	37.3
Aggregate intrinsic value of options outstanding	$	131.2
Aggregate intrinsic value of options fully vested	$	107.3
Aggregate intrinsic value of RSUs outstanding	$	34.3

The total intrinsic value of options exercised during 2015, 2014 and 2013 was as follows:


	Years Ended June 30,
	2015		2014		2013
Total intrinsic value of options exercised	$	20.5	$	49.4	$	51.8

Employee Stock Purchase Plan

The Company had an Employee Stock Purchase Plan that was approved by shareholders in 1995 (the “1995 Purchase Plan”), and subsequently amended, under which 2.0 shares of common stock had been authorized. As of December 5, 2012, a total of 2.0 shares of common stock had been issued under the 1995 Purchase Plan when it was terminated. On December 5, 2012, following shareholder approval, the Company adopted the 2012 Employee Stock Purchase Plan (the “2012 Purchase Plan”), under which 2.0 shares of common stock have been authorized. Shares are issued under the 2012 Purchase Plan twice yearly at the end of each offering period. At June 30, 2015, a total of 0.4 shares of common stock had been purchased under the 2012 Plan. Shares purchased under and compensation expense associated with the 1995 and 2012 Plans for the years reported are as follows:


	Years Ended June 30,
	2015		2014		2013
Shares purchased under the plans		0.2		0.2		0.1
Plan compensation expense	$	1.8	$	1.3	$	0.9

As of June 30, 2015, there was $0.8 of total unrecognized share-based compensation expense related to ESPP.

The fair value of shares issued under the Plan that was in effect for each period reported was calculated using the Black-Scholes option-pricing model using the following weighted-average assumptions:


	2015			2014			2013
Risk-free interest rate		0.1	%		0.1	%		0.1	%
Expected dividend yield		0	%		0	%		0	%
Expected lives (in years)		0.5			0.5			0.5
Expected volatility		33	%		56	%		37	%