Stock-Based Compensation

6 Months Ended

Jun. 30, 2012

Stock-Based Compensation

5. Stock-Based Compensation

For the three months ended June 30, 2012 and 2011, the Company recorded stock-based compensation expense of approximately $215,000 and $282,000, respectively, for stock options granted under the Second Amended and Restated 2001 Repligen Corporation Stock Plan (the “2001 Plan”) and the Repligen Corporation 2012 Stock Option and Incentive Plan (the “2012 Plan,” and collectively with the 2001 Plan and the 1992 Repligen Corporation Stock Option Plan, the “Plans”). The Company recorded stock-based compensation expense of approximately $456,000 and $537,000 for the six-month periods ended June 30, 2012 and 2011, respectively, for stock options granted under the Plans.

The 2012 Plan allows for the granting of incentive and nonqualified options to purchase shares of common stock, restricted stock and other equity awards. Incentive options granted to employees under the Plans 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 Plans generally vest over one year. Options granted under the Plans 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 June 30, 2012, options to purchase 2,629,490 shares were outstanding under the Plans. At June 30, 2012, 1,997,852 shares were available for future grant under the Plans.

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 six months ended June 30, 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		94,190			1.89
Exercised		(217,500	)		2.65
Forfeited/Cancelled		(70,600	)		4.31
Options outstanding at June 30, 2012		2,629,490		$	4.08		5.95	$	1,713,058
Options exercisable at June 30, 2012		1,678,700		$	4.34		4.61	$	926,194
Vested and expected to vest at June 30, 2012 (1)		2,506,271		$	4.09		5.85	$	1,647,742

(1) This represents the number of vested options as of June 30, 2012 plus the number of unvested options expected to vest as of June 30, 2012 based on the unvested outstanding options at June 30, 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 June 30, 2012 of $4.30 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 June 30, 2012.

The weighted average grant date fair value of options granted during the six months ended June 30, 2012 and 2011 was $3.62 and $2.64, respectively. The total fair value of stock options that vested during the six months ended June 30, 2012 and 2011 was approximately $502,180 and $514,866, respectively.

As of June 30, 2012, there was $1,545,645 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 2.43 years. The Company expects 827,571 unvested options to vest over the next five years.