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Stock-Based Compensation | 6 Months Ended
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Mar. 31, 2012
Stock-Based Compensation |
Stock-Based Compensation | Note 18. Stock-based compensation Stock options Woodward's 2006 Omnibus Incentive Plan (the "2006 Plan"), which has been approved by Woodward's stockholders, provides for the grant of up to 7,410 stock options to its employees and directors. Woodward believes that these awards align the interest of its employees with those of its stockholders. Stock option awards are granted with an exercise price equal to the market price of Woodward's stock at the date of grant, and generally with a four-year vesting schedule at a vesting rate of 25% per year and a term of 10 years. The fair value of options granted was estimated on the date of grant using the Black-Scholes-Merton option-valuation model using the assumptions in the following table. Woodward calculates the expected term based upon historical experience of plan participants and it represents the period of time that stock options granted are expected to be outstanding. Expected volatility is based on historical volatility using daily stock price observations. The estimated dividend yield is based upon Woodward's historical dividend practice and the market value of its common stock. The risk-free rate is based on the U.S. treasury yield curve, for periods within the contractual life of the stock option, at the time of grant.
|  | Three-Months Ending |  | Six-Months Ending
|  | March 31, |  | March 31,
|  | 2012 |  | 2011 |  | 2012 |  | 2011
Expected term |  | 5.9 years |  | 5.8 years |  | 5.9 - 8.5 years |  | 5.8 - 8.7 years
Estimated volatility |  | 55.5% - 55.6% |  | 54.0% |  | 48.9% - 55.6% |  | 48.0% - 54.0%
Estimated dividend yield |  | 0.7% |  | 1.1% |  | 0.7% - 1.1% |  | 1.1% - 1.3%
Risk-free interest rate |  | 1.0% - 1.3% |  | 2.6% |  | 1.0% - 1.6% |  | 1.9% - 2.6%
The following is a summary of the activity for stock option awards during the three and six-months ending March 31, 2012:
|  | Three-Months Ending |  |  | Six-Months Ending |
|  | March 31, 2012 |  |  | March 31, 2012 |
|  | Number of options |  |  | Weighted- Average Exercise Price per Share |  |  | Number of options |  |  | Weighted- Average Exercise Price per Share |
Options, beginning balance |  |  | 4,858 |  |  | $ | 21.34 |  |  |  | 4,228 |  |  | $ | 20.12 |
Options granted |  |  | 20 |  |  |  | 43.27 |  |  |  | 845 |  |  |  | 26.00 |
Options exercised |  |  | (205 | ) |  |  | 13.90 |  |  |  | (390 | ) |  |  | 12.86 |
Options forfeited |  |  | — |  |  |  | n/a |  |  |  | (10 | ) |  |  | 26.83 |
Options, ending balance |  |  | 4,673 |  |  | $ | 21.76 |  |  |  | 4,673 |  |  | $ | 21.76 |
Changes in nonvested stock options during the three and six-months ending March 31, 2012 were as follows:
|  | Three-Months Ending |  |  | Six-Months Ending |
|  | March 31, 2012 |  |  | March 31, 2012 |
|  | Number of options |  |  | Weighted- Average Exercise Price per Share |  |  | Number of options |  |  | Weighted- Average Exercise Price per Share |
Options, beginning balance |  |  | 1,713 |  |  | $ | 26.80 |  |  |  | 1,368 |  |  | $ | 27.71 |
Options granted |  |  | 20 |  |  |  | 43.27 |  |  |  | 845 |  |  |  | 26.00 |
Options vested |  |  | (4 | ) |  |  | 29.00 |  |  |  | (476 | ) |  |  | 27.41 |
Options forfeited |  |  | — |  |  |  | n/a |  |  |  | (8 | ) |  |  | 26.83 |
Options, ending balance |  |  | 1,729 |  |  | $ | 26.99 |  |  |  | 1,729 |  |  | $ | 26.99 |
As of March 31, 2012, there was approximately $13,000 of total unrecognized compensation cost, which assumes a weighted-average forfeiture rate of 6.4%, related to non-vested stock-based compensation arrangements granted under the 2002 Stock Option Plan (for which no further grants will be made) and the 2006 Plan. The remaining unrecognized compensation cost is expected to be recognized over a weighted-average period of approximately 2.8 years. Information about stock options that have vested, or are expected to vest, and are exercisable at March 31, 2012 were as follows:
|  | Number |  |  | Weighted- Average Exercise Price |  |  | Weighted- Average Remaining Life in Years |  |  | Aggregate Intrinsic Value |
Options outstanding |  |  | 4,673 |  |  | $ | 21.76 |  |  |  | 6.1 |  |  | $ | 98,471 |
Options vested and exercisable |  |  | 2,944 |  |  |  | 18.69 |  |  |  | 4.5 |  |  |  | 71,059 |
Options vested and expected to vest |  |  | 4,505 |  |  |  | 21.55 |  |  |  | 5.9 |  |  |  | 95,871 |

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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 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher AICPA -Name Statement of Position (SOP) -Number 93-6 -Paragraph 53 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 14 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 123R -Paragraph 64, 65, A240 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 40 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6418621&loc=d3e17540-113929 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6406099&loc=d3e25284-112666 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901 + Details
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