Stock Based Compensation

9 Months Ended

Sep. 30, 2012

Notes to Financial Statements [Abstract]

Stock-Based Compensation

5. Stock Based Compensation

The Roper Industries, Inc. Amended and Restated 2006 Incentive Plan is a stock based compensation plan used to grant incentive stock options, nonqualified stock options, restricted stock, stock appreciation rights or equivalent instruments to Roper's employees, officers and directors.

Roper's stock purchase plan allows employees in the U.S. and Canada to designate up to 10% of eligible earnings to purchase Roper's common stock at a 5% discount to the average closing price of the stock at the beginning and end of a quarterly offering period. The common stock sold to the employees may be either treasury stock, stock purchased on the open market, or newly issued shares.

The following table provides information regarding the Company's stock based compensation expense (in thousands):

	Three months ended September 30,				Nine months endedSeptember 30,
	2012		2011		2012		2011
Stock based compensation	$	10,439	$	7,660	$	30,143	$	23,466
Tax effect recognized in net income		3,654		2,681		10,550		8,216
Windfall tax benefit, net		9,009		372		19,975		3,999

Stock Options - In the nine month period ended September 30, 2012, 531,100 options were granted with a weighted average fair value of $30.19 per option. During the same period in 2011, 753,500 options were granted with a weighted average fair value per share of $24.45. All options were issued at grant date fair value, which is defined by the Plan as the closing price of Roper's common stock on the date of grant.

Roper records compensation expense for employee stock options based on the estimated fair value of the options on the date of grant using the Black-Scholes option-pricing model. Historical data, among other factors, is used to estimate the expected price volatility, the expected dividend yield, the expected option life and the expected forfeiture rate. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for the estimated life of the option. The following weighted average assumptions were used to estimate the fair value of options granted during current and prior year periods using the Black-Scholes option-pricing model:

	Nine months ended September 30,
	2012	2011
Fair value per share ($)	30.19	24.45
Risk-free interest rate (%)	0.77	1.91
Expected option life (years)	5.24	5.34
Expected volatility (%)	36.51	35.26
Expected dividend yield (%)	0.58	0.60

Cash received from option exercises for the nine months ended September 30, 2012 and 2011 was $40.1 million and $14.5 million, respectively.

Restricted Stock Awards - During the nine months ended September 30, 2012, 358,807 restricted stock awards were granted with a weighted average fair value per share of $95.10. During the same period in 2011, 339,330 awards were granted with a weighted average fair value per share of $74.27. All grants were issued at grant date fair value.

During the nine months ended September 30, 2012, 205,405 restricted awards vested with a weighted average grant date fair value per share of $55.98, at a weighted average vest date fair value per share of $94.57.

Employee Stock Purchase Plan - During the nine month periods ended September 30, 2012 and 2011, participants of the employee stock purchase plan purchased 17,410 and 20,628 shares, respectively, of Roper's common stock for total consideration of $1.6 million and $1.6 million, respectively. All shares were purchased from Roper's treasury shares.