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Stock Based Compensation
 3 Months Ended
Mar. 31, 2013
Notes to Financial Statements [Abstract]  
Stock-Based Compensation
4.
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
March 31,
 
2013
2012
Stock based compensation
$  12,977
$  9,954
Tax effect recognized in net income
4,542
3,484
Windfall tax benefit, net
4,312
7,415

Stock Options - In the quarter ended March 31, 2013, 447,850 options were granted with a weighted average fair value of $36.53 per option. During the same period in 2012, 383,600 options were granted with a weighted average fair value of $29.65 per option. 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 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 quarters using the Black-Scholes option-pricing model:

 
Three months ended March 31,
 
2013
 
2012
Fair value per share ($)
36.53
 
29.65
Risk-free interest rate (%)
0.80
 
0.82
Expected option life (years)
5.18
 
5.22
Expected volatility (%)
36.29
 
36.56
Expected dividend yield (%)
0.57
 
0.59

Cash received from option exercises for the three months ended March 31, 2013 and 2012 was $9.1 million and $16.9 million, respectively.

Restricted Stock Awards - During the quarter ended March 31, 2013, 261,390 restricted stock awards were granted with a weighted average fair value of $115.36 per restricted share. During the same period in 2012, 258,057 restricted stock awards were granted with a weighted average fair value of $93.62 per restricted share. All grants were issued at grant date fair value.

During the quarter ended March 31, 2013, 103,795 restricted awards vested with a weighted average grant date fair value of $57.64 per restricted share, and a weighted average vest date fair value of $120.14 per restricted share.

Employee Stock Purchase Plan - During the three month periods ended March 31, 2013 and 2012, participants of the employee stock purchase plan purchased 5,594 and 6,764 shares, respectively, of Roper's common stock for total consideration of $0.64 million and $0.60 million, respectively. All shares were purchased from Roper's treasury shares.