Stock-Based Compensation

3 Months Ended

Mar. 31, 2012

Stock-Based Compensation

5. Stock-Based Compensation

For the three months ended March 31, 2012 and 2011, the Company recorded stock-based compensation expense of approximately $241,000 and $255,000, respectively, for stock options granted under the Second Amended and Restated 2001 Repligen Corporation Stock Plan (the “2001 Plan”).

The 2001 Plan allows for the granting of incentive and nonqualified options and restricted stock and other equity awards to purchase shares of common stock. Incentive options granted to employees under the 2001 Plan generally vest over a four to five-year period, with 20%-25% vesting on the first anniversary of the date of grant and the remainder vesting in equal yearly installments thereafter. Nonqualified options issued to non-employee directors and consultants under the 2001 Plan generally vest over one year. Options granted under the 2001 Plan have a maximum term of ten years from the date of grant and generally, the exercise price of the stock options equals the fair market value of the Company’s common stock on the date of grant. At March 31, 2012, options to purchase 2,622,400 shares were outstanding under the 2001 Plan and the 1992 Repligen Corporation Stock Option Plan (collectively with the 2001 Plan, the “Plans”). At March 31, 2012, 15,509 shares were available for future grant under the 2001 Plan.

The Company uses the Black-Scholes option pricing model to calculate the fair value of share-based awards on the grant date. The Company measures stock-based compensation cost at the grant date based on the estimated fair value of the award, and recognizes it as expense over the employee’s requisite service period on a straight-line basis. The Company has no awards with market or performance conditions. The Company recognizes stock-based compensation expense based upon options that are ultimately expected to vest, and accordingly, such compensation expense has been adjusted by an amount of estimated forfeitures.

Information regarding option activity for the three months ended March 31, 2012 under the Plans is summarized below:

	Options Outstanding			Weighted- Average Exercise Price Per Share		Weighted- Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value
Options outstanding at January 1, 2012		2,823,400		$	4.05
Granted		15,000			4.63
Exercised		(203,000	)		2.59
Forfeited/Cancelled		(13,000	)		4.05
Options outstanding at March 31, 2012		2,622,400		$	4.17		6.28	$	4,634,129
Options exercisable at March 31, 2012		1,622,600		$	4.28		5.10	$	2,730,691
Vested and expected to vest at March 31, 2012 (1)		2,480,545		$	4.17		6.18	$	4,382,363

(1) This represents the number of vested options as of March 31, 2012 plus the number of unvested options expected to vest as of March 31, 2012 based on the unvested outstanding options at March 31, 2012 adjusted for estimated forfeiture rates of 8% for awards granted to non-executive level employees and 3% for awards granted to executive level employees.

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the closing price of the common stock on March 31, 2012 of $5.90 and the exercise price of each in-the-money option) that would have been received by the option holders had all option holders exercised their options on March 31, 2012.

The weighted average grant date fair value of options granted during the three months ended March 31, 2012 and 2011 was $2.30 and $2.68, respectively. The total fair value of stock options that vested during the three months ended March 31, 2012 and 2011 was approximately $256,000 and $174,787, respectively.

As of March 31, 2012, there was $1,552,464 of total unrecognized compensation cost related to unvested share-based awards. This cost is expected to be recognized over a weighted average remaining requisite service period of 2.75 years. The Company expects 857,945 unvested options to vest over the next five years.