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 (the "2010 Plan") remain subject to the terms and conditions of those plans. During the three months ended December 31, 2017, there were 660,002 non-qualified stock options and 403,339 shares of restricted stock awards granted under the 2016 Plan. An additional 213,904 of restricted stock grants were awarded outside of the 2010 Plan.

A summary of compensation cost for stock-based payment arrangements recognized in general and administrative expense is as follows:


	Three Months Ended
	December 31,
	2017		2016
	(in thousands)
Compensation expense
Stock options	$	1,963	$	1,652
Restricted stock		5,124		4,249
	$	7,087	$	5,901

STOCK OPTIONS

The following summarizes the weighted-average assumptions utilized in determining the fair value of options granted during the three months ended December 31, 2017 and 2016:


	2017		2016
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 months ended December 31, 2017 is presented in the following tables:


	Three Months Ended December 31, 2017
				Weighted
				Average
		Weighted		Remaining	Aggregate
		Average		Contractual	Intrinsic
	Shares	Exercise		Term	Value
	(in thousands)	Price		(in years)	(in millions)
Outstanding at October 1, 2017	3,278	$	56.41
Granted	660		58.52
Exercised	(183)		35.07
Outstanding at December 31, 2017	3,755	$	57.82	6.43	$	36.1
Vested and expected to vest at December 31, 2017	3,755	$	57.82	6.43	$	36.1
Exercisable at December 31, 2017	2,388	$	55.15	4.92	$	29.2

The weighted-average fair value of options granted in the first quarter of fiscal 2018 and 2017 was $12.94 and $22.42, respectively.

The total intrinsic value of options exercised during the three months ended December 31, 2017 and 2016 was $4.1 million and $11.6 million, respectively.

As of December 31, 2017, the unrecognized compensation cost related to stock options was $13.7 million which is expected to be recognized over a weighted-average period of 3.4 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 December 31, 2017, there was $54.2 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 3.0 years.

A summary of the status of our restricted stock awards as of December 31, 2017 and changes in restricted stock outstanding during the three months then ended is presented below:


	Three Months Ended
	December 31, 2017
		Weighted
		Average
	Shares	Exercise
	(in thousands)	Price
Unvested at October 1, 2017	659	$	70.76
Granted	617		59.39
Vested (1)	(248)		71.06
Forfeited	(1)		69.48
Unvested on December 31, 2017	1,027	$	63.72

(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.