Stock Based Compensation

6 Months Ended

Jun. 30, 2011

Notes to Financial Statements [Abstract]

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, directors and consultants.

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 our stock based compensation expense (in millions):

	Three months ended June 30,				Six months ended June 30,
	2011		2010		2011		2010
Stock based compensation	$	7.7	$	6.1	$	15.8	$	13.1
Tax effect recognized in net income		2.7		2.1		5.5		4.6
Windfall tax benefit/(shortfall), net		0.9		1.8		3.7		2.9

Stock Options - In the six month period ended June 30, 2011, 652,000 options were granted with a weighted average fair value of $24.86 per option. During the same period in 2010, 573,350 options were granted with a weighted average fair value per share of $16.84. All options were issued at grant date fair value, which is defined by the Plan as the closing price of Roper 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:

	Six months ended June 30,
	2011	2010
Fair value per share ($)	24.86	16.84
Risk-free interest rate (%)	2.07	2.36
Expected option life (years)	5.33	5.38
Expected volatility (%)	35.17	34.54
Expected dividend yield (%)	0.59	0.72

Cash received from option exercises for the six months ended June 30, 2011 and 2010 was approximately $12.9 million and $8.5 million, respectively.

Restricted Stock Awards - During the six months ended June 30, 2011, 310,580 restricted stock awards were granted with a weighted average fair value per share of $74.76. During the same period in 2010, 250,243 awards were granted with a weighted average fair value per share of $52.55. All grants were issued at grant date fair value.

During the six months ended June 30, 2011, 211,101 restricted awards vested with a weighted average grant date fair value per share of $51.85, at a weighted average vest date fair value per share of $76.54.

Employee Stock Purchase Plan - During the six month periods ended June 30, 2011 and 2010, participants of the employee stock purchase plan purchased 13,356 and 14,538 shares, respectively, of Roper's common stock for total consideration of $1.06 million and $0.78 million, respectively. All shares were purchased from Roper's treasury shares.