10. Stock-Based Compensation

For the three months ended March 31, 2016 and 2015, the Company recorded stock-based compensation expense of approximately $922,000 and $702,000, 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 following table presents stock-based compensation expense included in the Company’s consolidated statements of comprehensive income (loss):


	Three Months Ended March 31,
	2016		2015
Cost of product revenue	$	60	$	43
Research and development		80		69
Selling, general and administrative		782		590

Total	$	922	$	702

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 three to five-year period, with 20%-33% 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 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, 2016, options to purchase 1,312,508 shares were outstanding under the Plans. At March 31, 2016, 2,085,727 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 stock option awards on the grant date, and the Company uses the value of the common stock as of the grant date to value restricted stock units. 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 performance-based or 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, 2016 under the Plans is summarized below:


	Options Outstanding			Weighted- Average Exercise Price Per Share		Weighted- Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value (in thousands)
Options outstanding at January 1, 2016		1,240,935		$	10.44
Granted		244,220			13.44
Exercised		(113,747	)		6.86
Forfeited/Cancelled		(58,900	)		6.15

Options outstanding at March 31, 2016		1,312,508		$	11.50		7.34	$	20,679

Options exercisable at March 31, 2016		517,769		$	7.91		5.11	$	9,792

Vested and expected to vest at March 31, 2016 (1)		1,221,408		$	11.61		7.26	$	19,133

⁽¹⁾

This represents the number of vested options as of March 31, 2016 plus the number of unvested options expected to vest as of March 31, 2016 based on the unvested outstanding options at March 31, 2016 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, 2016 of $26.82 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, 2016.

The weighted average grant date fair value of options granted during the three months ended March 31, 2016 and 2015 was $19.57 and $19.67, respectively. The total fair value of stock options that vested during the three months ended March 31, 2016 and 2015 was approximately $1,387,000 and $671,000, respectively.

As of March 31, 2016, there was approximately $9,764,000 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 2.93 years. The Company expects 703,639 unvested options to vest over the next five years.