6.	Stock-Based Compensation

For the three months ended March 31, 2014 and 2013, the Company recorded stock-based compensation expense of $307,425 and $250,071, respectively, for share-based awards 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 following table presents stock-based compensation expense included in the Company’s consolidated statements of comprehensive income:


	Three Months Ended March 31,
	2014		2013
Cost of product revenue	$	26,562	$	11,664
Research and development		31,603		7,640
Selling, general and administrative		249,260		230,767

Total	$	307,425	$	250,071

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 March 31, 2014, options to purchase 1,675,077 shares were outstanding under the Plans. At March 31, 2014, 944,646 shares were available for future grant under the 2012 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 awards with service based vesting as expense over the employee’s requisite service period on a straight-line basis. The Company records the expense for share-based awards subject to performance-based milestone vesting over the remaining service period when management determines that achievement of the milestone is probable. Management evaluates whether the achievement of a performance-based milestone is probable as of the reporting date. The Company has no awards that are subject to market conditions. The Company recognizes stock-based compensation expense for options that are ultimately expected to vest, and accordingly, such compensation expense has been adjusted for estimated forfeitures.

Information regarding option activity for the three months ended March 31, 2014 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, 2014		1,610,988		$	5.07
Granted		181,431			11.14
Exercised		(114,942	)		4.54
Forfeited/Cancelled		(2,400	)		5.12

Options outstanding at March 31, 2014		1,675,077		$	5.78		6.98	$	12,256,703

Options exercisable at March 31, 2014		834,186		$	4.29		5.13	$	7,146,702

Vested and expected to vest at March 31, 2014 (1)		1,577,600		$	5.67		6.88	$	11,700,596

(1)

This represents the number of vested options as of March 31, 2014 plus the number of unvested options expected to vest as of March 31, 2014 based on the unvested outstanding options at March 31, 2014 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, 2014 of $12.86 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, 2014.

The weighted average grant date fair value of options granted during the three months ended March 31, 2014 and 2013 was $10.58 and $3.26, respectively. The total fair value of stock options that vested during the three months ended March 31, 2014 and 2013 was approximately $343,667 and $232,617, respectively.

As of March 31, 2014, there was $3,364,170 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 3.09 years. The Company expects 743,414 unvested options to vest over the next five years.