(3)	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 3,500,000. At December 31, 2014, 1,809,802 shares were available for issuance. In addition, as of December 31, 2014, the Company may grant up to 4,496,736 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 without the issuance of shares of common stock by the Company.

The number of shares, terms, and vesting period of awards under the 2010 Plan are determined by the Compensation Committee of the Board of Directors for each equity award. Stock options granted under the plan prior to December 5, 2012 generally vest ratably over four years and expire ten years from the grant date. Stock options granted after December 5, 2012 generally vest ratably over four years and expire eight years from the grant date. The exercise price of options granted is equivalent to the fair market value of the stock on the grant date. In September 2014, the Company began issuing restricted stock units (“RSUs”) which vest ratably over four years on the anniversary date of the grant in lieu of stock options to all employees and directors. The number of RSUs awarded to certain executive officers may be reduced if certain additional functional performance metrics are not met.

Stock Options

A summary of the stock option activity under the Company’s plans for the six months ended December 31, 2014 is as follows:


	Number of shares		Weighted average exercise price
Options outstanding at June 30, 2014		14,238,603	$	23.30
Options granted		1,000		37.17
Less:
Options exercised		873,774		19.91
Options canceled or expired		254,087		25.75

Options outstanding at December 31, 2014		13,111,742	$	23.48

As of December 31, 2014, options to purchase 8,803,382 shares were vested and exercisable at a weighted average price of $22.64.

As of December 31, 2014, there was $28.7 million of total unrecognized share-based compensation expense related to stock options that will be recognized over a weighted-average period of 1.92 years.

Restricted Stock Units

A summary of the RSU activity under the Company’s plans for the six months ended December 31, 2014 is as follows:


	Number of shares		Weighted average grant date fair value
RSUs outstanding at June 30, 2014		—	$	—
RSUs granted		1,179,633		37.85
Less:
RSUs vested		—		—
RSUs canceled		79,450		38.12

RSUs outstanding at December 31, 2014		1,100,183	$	37.84

The grant date fair value of an RSU equals the closing price of our common stock on the grant date. The weighted average grant date fair value for the six months ended December 31, 2014 is $37.85. As of December 31, 2014, no RSUs were vested.

As of December 31, 2014, there was $31.3 million of total unrecognized share-based compensation expense related to RSUs that will be recognized over a weighted-average period of 2.98 years. This unrecognized compensation expense is equal to the fair value of RSUs expected to vest.

Employee Stock Purchase Plan

The Company also has an Employee Stock Purchase Plan that was approved by shareholders in 2012 (the “2012 Purchase Plan”), under which 2,000,000 shares of common stock have been authorized. Shares are issued under the 2012 Purchase Plan twice yearly at the end of each offering period. As of December 31, 2014, approximately 334,000 shares of common stock have been issued under the 2012 Purchase Plan and approximately 1,666,000 were available for issuance.

Share-Based Compensation Expense

Share-based compensation expense recognized and included in the condensed consolidated statements of income and comprehensive income was allocated as follows:


	Three months ended				Six months ended
	December 31,				December 31,
(In thousands)	2014		2013		2014		2013
Cost of molecular diagnostic testing	$	249	$	209	$	447	$	432
Cost of pharmaceutical and clinical services		123		74		283		137
Research and development expense		1,252		846		2,017		1,627
Selling, general, and administrative expense		10,523		5,728		16,281		11,596

Total share-based compensation expense	$	12,147	$	6,857	$	19,028	$	13,792

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 million in share-based compensation expense for the three and six months ending December 31, 2014.