6.	Stock-Based Compensation

For the three months ended September 30, 2014 and 2013, the Company recorded stock-based compensation expense of $533,092 and $205,772, respectively, for share-based awards granted under the Second Amended and Restated 2001 Repligen Corporation Stock Plan (the “2001 Plan”) and the Repligen Corporation Amended and Restated 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 $1,385,728 and $768,534 for the nine-month periods ended September 30, 2014 and 2013, respectively, for share-based awards granted under the Plans.

The following table presents stock-based compensation expense included in the Company’s consolidated statements of comprehensive income:


	Three months ended September 30,				Nine months ended September 30,
	2014		2013		2014		2013
Cost of product revenue	$	46,015	$	24,059	$	135,861	$	47,151
Research and development		61,998		30,092		173,993		73,814
Selling, general and administrative		425,079		151,621		1,075,874		647,569

Total	$	533,092	$	205,772	$	1,385,728	$	768,534

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 September 30, 2014, options to purchase 1,259,317 shares were outstanding under the Plans. At September 30, 2014, 2,824,057 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 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 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 nine months ended September 30, 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		376,698			13.10
Exercised		(622,538	)		4.41
Forfeited/Cancelled		(105,831	)		7.49

Options outstanding at September 30, 2014		1,259,317		$	7.61		7.26	$	15,596,097

Options exercisable at September 30, 2014		480,300		$	4.17		4.80	$	7,559,847

Vested and expected to vest at September 30, 2014 (1)		1,169,331		$	7.43		7.16	$	14,681,625

(1)

This represents the number of vested options as of September 30, 2014 plus the number of unvested options expected to vest as of September 30, 2014 based on the unvested outstanding options at September 30, 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 September 30, 2014 of $19.91 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 September 30, 2014.

The weighted average grant date fair value of options granted during the nine months ended September 30, 2014 and 2013 was $11.12 and $4.19, respectively. The total fair value of stock options that vested during the nine months ended September 30, 2014 and 2013 was approximately $1,023,136 and $934,280, respectively.

As of September 30, 2014, there was $4,034,523 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 3.20 years. The Company expects 689,031 unvested options to vest over the next five years.