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Stock-Based Compensation | 6 Months Ended
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Mar. 31, 2018
Stock-Based Compensation |
Stock-Based Compensation | 8.Stock-Based Compensation On March 2, 2016, the Helmerich & Payne, Inc. 2016 Omnibus Incentive Plan (the “2016 Plan”) was approved by our stockholders. The 2016 Plan, among other things, authorizes the Human Resources Committee of the Board to grant non-qualified stock options and restricted stock awards to selected employees and to non-employee Directors. Restricted stock may be granted for no consideration other than prior and future services. The purchase price per share for stock options may not be less than market price of the underlying stock on the date of grant. Stock options expire 10 years after the grant date. Awards outstanding in the Helmerich & Payne, Inc. 2005 Long-Term Incentive Plan and the Helmerich & Payne, Inc. 2010 Long-Term Incentive Plan (collectively the "2010 Plan") remain subject to the terms and conditions of those plans. During the six months ended March 31, 2018, there were 667,032 non-qualified stock options and 405,086 shares of restricted stock awards granted under the 2016 Plan. An additional 213,904 of restricted stock grants were awarded outside of the 2016 Plan. A summary of compensation cost for stock-based payment arrangements recognized in general and administrative expense is as follows:
|  | Three Months Ended |  | Six Months Ended |
|  | March 31, |  | March 31, |
|  | 2018 |  | 2017 |  | 2018 |  | 2017 |
|  | (in thousands) |  | (in thousands) |
Compensation expense |  |  |  |  |  |  |  |  |  |  |  |  |
Stock options |  | $ | 2,109 |  | $ | 1,869 |  | $ | 4,072 |  | $ | 3,521 |
Restricted stock |  |  | 6,350 |  |  | 4,709 |  |  | 11,474 |  |  | 8,958 |
|  | $ | 8,459 |  | $ | 6,578 |  | $ | 15,546 |  | $ | 12,479 |
STOCK OPTIONS The following summarizes the weighted-average assumptions utilized in determining the fair value of options granted during the six months ended March 31, 2018 and 2017:
|  | 2018 |  | 2017 |
Risk-free interest rate |  | 2.2 | % | 2.0 | %
Expected stock volatility |  | 36.1 | % | 39.4 | %
Dividend yield |  | 4.8 | % | 3.4 | %
Expected term (in years) |  | 6.0 |  | 5.5 |
Risk-Free Interest Rate. The risk-free interest rate is based on U.S. Treasury securities for the expected term of the option. Expected Volatility Rate. Expected volatility is based upon historical experience of the daily closing price of our stock over a period which approximates the expected term of the option. Expected Dividend Yield. The expected dividend yield is based on our current dividend yield. Expected Term. The expected term of the options granted represents the period of time that they are expected to be outstanding. We estimate the expected term of options granted based on historical experience with grants and exercises. A summary of stock option activity under all existing long-term incentive plans for the three and six months ended March 31, 2018 is presented in the following tables:
|  | Three Months Ended March 31, 2018 |
|  |  |  |  |  | Weighted |  |  |  |
|  |  |  |  |  | Average |  |  |
|  |  |  | Weighted |  | Remaining |  | Aggregate |
|  |  |  | Average |  | Contractual |  | Intrinsic |
|  | Shares |  | Exercise |  | Term |  | Value |
|  | (in thousands) |  | Price |  | (in years) |  | (in millions) |
Outstanding at January 1, 2018 |  | 3,755 |  | $ | 57.82 |  |  |  |  |  |
Granted |  | 7 |  |  | 71.57 |  |  |  |  |  |
Exercised |  | (41) |  |  | 30.66 |  |  |  |  |  |
Outstanding at March 31, 2018 |  | 3,721 |  | $ | 58.15 |  | 6.24 |  | $ | 40.1 |
Vested and expected to vest at March 31, 2018 |  | 3,721 |  | $ | 58.15 |  | 6.24 |  | $ | 40.1 |
Exercisable at March 31, 2018 |  | 2,358 |  | $ | 55.64 |  | 4.75 |  | $ | 31.1 |
|  | Six Months Ended
|  | March 31, 2018
|  |  |  | Weighted
|  |  |  | Average
|  | Shares |  | Exercise
|  | (in thousands) |  | Price
Outstanding at October 1, 2017 |  | 3,278 |  | $ | 56.41
Granted |  | 667 |  |  | 58.66
Exercised |  | (224) |  |  | 34.27
Outstanding at March 31, 2018 |  | 3,721 |  | $ | 58.15
The weighted-average fair value of options granted in the first and second quarters of fiscal 2018 was $12.94 and $17.78, respectively. The total intrinsic value of options exercised during the three and six months ended March 31, 2018 was $1.6 million and $5.6 million, respectively. As of March 31, 2018, the unrecognized compensation cost related to stock options was $11.8 million which is expected to be recognized over a weighted-average period of 2.2 years. RESTRICTED STOCK Restricted stock awards consist of our common stock and are time-vested over three to six years. We recognize compensation expense on a straight-line basis over the vesting period. The fair value of restricted stock awards under the 2016 Plan is determined based on the closing price of our shares on the grant date. As of March 31, 2018, there was $47.8 million of total unrecognized compensation cost related to unvested restricted stock awards. That cost is expected to be recognized over a weighted-average period of 2.6 years. A summary of the status of our restricted stock awards under the 2010 Plan and the 2016 Plan as of March 31, 2018 and changes in restricted stock outstanding during the six months then ended is presented below:
|  | Six Months Ended |
|  | March 31, 2018 |
|  |  |  | Weighted Average |
|  | Shares |  | Grant Date Fair |
|  | (in thousands) |  | Value per Share |
Unvested at October 1, 2017 |  | 659 |  | $ | 70.76 |
Granted |  | 619 |  |  | 59.43 |
Vested (1) |  | (251) |  |  | 71.63 |
Forfeited |  | (4) |  |  | 66.27 |
Unvested on March 31, 2018 |  | 1,023 |  | $ | 63.71 |
(1)The number of restricted stock awards vested includes shares that we withheld on behalf of our employees to satisfy the statutory tax withholding requirements.

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- Definition The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI http://asc.fasb.org/topic&trid=2228938 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -URI http://asc.fasb.org/subtopic&trid=2208855 + Details
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