Activity in common stock and treasury stock shares are as follows:


	Common Stock		Treasury Stock			Treasury stock held for deferred compensation
Balances as of September 30, 2023		72,960		(13,070	)		(55	)
Sales of treasury stock		—		247			—
Purchases of stock by deferred compensation		—		—			(1	)
Distribution of stock from deferred compensation		—		—			2
Balances as of December 31, 2023		72,960		(12,823	)		(54	)

Balances as of September 30, 2024		72,960		(13,787	)		(45	)
Sales of treasury stock		—		381			—
Purchase of treasury stock		—		(206	)		—
Common shares issued for benefit plans		—		5			—
Purchases of stock by deferred compensation		—		—			(1	)
Distribution of stock from deferred compensation		—		—			15
Balances as of December 31, 2024		72,960		(13,607	)		(31	)

In January 2024, the Board terminated the prior share repurchase authorization, which was nearing expiration, and concurrently authorized a new program for the repurchase of up to $600,000 of Woodward’s outstanding shares of common stock on the open market or in privately negotiated transactions over a three-year period ending in January 2027 (the “2024 Authorization”). During the three months ended December 31, 2024 we repurchased 206 shares of our common stock for $35,473 under the 2024 Authorization, whereas we did not repurchase any shares of our common stock during the three months ended December 31, 2023.

Provisions governing non-qualified stock option awards, restricted stock units ("RSUs"), and performance restricted stock units ("PSUs") are included in the 2017 Omnibus Incentive Plan, as amended from time to time (the “2017 Plan”) and, with respect to outstanding stock options awarded in or prior to fiscal year 2016, the 2006 Omnibus Incentive Plan (the “2006 Plan”).

The 2017 Plan was first approved by Woodward’s stockholders in January 2017 and is the successor plan to the 2006 Plan. As of September 14, 2016, the effective date of the 2017 Plan, the Board delegated authority to administer the 2017 Plan to the Human Capital & Compensation Committee of the Board, including, but not limited to, the power to determine the recipients of awards and the terms of those awards.

Stock option awards are granted with an exercise price equal to the market price of Woodward’s stock at the date the grants are awarded, a ten-year term, and generally have a four-year vesting schedule at a rate of 25% per year.

The fair value of options granted is estimated as of the grant date using the Black-Scholes-Merton option-valuation model. Woodward calculates the expected term, which represents the average period of time that stock options granted are expected to be outstanding, based upon historical experience of plan participants. 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.

The following is a summary of the activity for stock option awards:


	Three Months Ended December 31, 2024
	Number of options			Weighted-Average Exercise Price per Share
Beginning balance		3,578		$	86.03
Granted		3			169.34
Exercised		(361	)		82.07
Ending balance		3,220		$	86.54

Changes in non-vested stock options were as follows:


	Three Months Ended December 31, 2024
	Number of options			Weighted-Average Grant Date Fair Value per Share
Beginning balance		898		$	37.30
Granted		3			77.15
Vested		(406	)		33.52
Ending balance		495		$	40.62

Information about stock options that have vested, or are expected to vest, and are exercisable at December 31, 2024 was as follows:


	Number of options		Weighted-Average Exercise Price		Weighted-Average Remaining Life in Years		Aggregate Intrinsic Value
Options outstanding		3,220	$	86.54		5.2	$	257,174
Options vested and exercisable		2,725		83.56		4.7		225,758
Options vested and expected to vest		3,202		86.44		5.2		256,148

The Company generally grants RSUs to eligible employees under its Form RSU agreement for Employees and Consultants (the “Standard Form RSU Agreement”). RSUs granted under the Standard Form RSU Agreement prior to November 14, 2023, generally have a four-year vesting schedule at a rate of 25% per year, and RSUs granted after November 14, 2023 have a three-year vesting schedule at a rate of 33.3% per year, in each case generally subject to

continued employment. The fair value of RSUs granted are estimated using the closing price of the Company’s stock on the grant date.

The Company has also granted RSUs to certain employees under its form attraction and retention RSU agreement (the “Form Attraction and Retention RSU Agreement”), which has from time to time been used for new hires and specific retention purposes. RSUs granted under the Form Attraction and Retention RSU Agreement are generally scheduled to fully vest on the third or fourth anniversary of the respective grant dates, and in each case, subject to continued employment.

A summary of the activity for RSUs:


	Three Months Ended December 31, 2024
	Number of units			Weighted-Average Grant Date Fair Value
Beginning balance		318		$	118.19
Granted		12			174.69
Released		(26	)		100.72
Forfeited		(1	)		99.92
Ending balance		303		$	122.07

The Company grants PSUs to certain eligible employees under its form PSU agreement that generally will vest subject to a market condition and a service condition through the performance period. The market condition associated with the awards is based on the Company's relative total shareholder return ("TSR") compared to the TSR generated by the other companies that comprise the S&P 400 Midcap Index over a three-year performance period. Performance at target will result in vesting and issuance of the number of PSUs granted, equal to 100% payout. Performance below or above target can result in an issuance of between 0% - 150% of the target number of PSUs granted. Expense is recognized based on the weighted average grant date fair value on a straight line basis over the service period, irrespective as to whether the market condition is achieved.

The fair value of the PSUs at the grant date was determined based upon a Monte Carlo valuation method. The assumptions used in the Monte Carlo method to value the PSUs granted, which includes the grant date fair value outcome from the Monte Carlo method, were as follows:


	December 31, 2024			December 31, 2023
Expected volatility		30.9	%		30.2	%
Risk free interest rate		4.1	%		4.5	%
Expected life	3 years			3 years
Grant date fair value	$	196.63		$	146.47

The PSUs granted receive dividend equivalent units; therefore, no discount was applied for Woodward’s dividends.

A summary of the activity for PSUs:


	Three Months Ended December 31, 2024
	Number of units		Weighted-Average Grant Date Fair Value
Beginning balance		62	$	146.47
Granted		44		196.63
Ending balance		106	$	167.31

Woodward recognizes stock-based compensation expense on a straight-line basis over the requisite service period. Pursuant to the form agreements used by the Company, with terms approved by the administrator of the applicable plan, the requisite service period can be less than the stated vesting period based on grantee’s retirement eligibility. As such, the recognition of stock-based compensation expense associated with some grants can be accelerated to a period of less than the stated vesting period, including immediate recognition of stock-based compensation expense on the date of grant.

At December 31, 2024, there was approximately $30,934 of total unrecognized compensation expense related to non-vested stock-based compensation arrangements, including stock options, RSUs, and PSUs. The pre-vesting forfeiture rates

for purposes of determining stock-based compensation expense recognized were estimated to be 0% for members of the Board and 7.4% for all others. The remaining unrecognized compensation cost is expected to be recognized over a weighted-average period of approximately 1.7 years.