Share-based Compensation

9 Months Ended

Sep. 24, 2013

(2) Share-based Compensation

On May 16, 2013, the Company’s stockholders approved the Texas Roadhouse, Inc. 2013 Long-Term Incentive Plan (the “Plan”). The Plan provides for the granting of incentive and non-qualified stock options to purchase shares of common stock, stock appreciation rights, and full value awards, including restricted stock, restricted stock units (“RSUs”), deferred stock units, performance stock and performance stock units. As a result of the approval of the Plan, no future awards will be made under the Texas Roadhouse, Inc. 2004 Equity Incentive Plan.

Beginning in 2008, we changed the method by which we provide share-based compensation to our employees by eliminating stock option grants and, instead, granting RSUs as a form of share-based compensation. An RSU is the conditional right to receive one share of common stock upon satisfaction of the vesting requirement.

The following table summarizes the share-based compensation recorded in the accompanying unaudited condensed consolidated statements of income and comprehensive income:

	13 Weeks Ended				39 Weeks Ended
	September 24, 2013		September 25, 2012		September 24, 2013		September 25, 2012

Labor expense	$	1,356	$	1,196	$	4,027	$	3,326
General and administrative expense	2,256		2,233		6,556		6,428
Total share-based compensation expense	$	3,612	$	3,429	$	10,583	$	9,754

Share-based compensation activity by type of grant as of September 24, 2013 and changes during the 39 weeks then ended are presented below.

Summary Details for Equity Incentive Plan Share Options

	Shares		Weighted- Average Exercise Price		Weighted-Average Remaining Contractual Term (years)	Aggregate Intrinsic Value

Outstanding at December 25, 2012	2,258,921		$	13.24
Granted	—		—
Forfeited	(25,719	)	12.55
Exercised	(976,659	)	13.31
Outstanding at September 24, 2013	1,256,543		$	13.20	2.33	$	15,781

Exercisable at September 24, 2013	1,256,543		$	13.20	2.33	$	15,781

The total intrinsic value of options exercised during the 13 weeks ended September 24, 2013 and September 25, 2012 was $1.7 million and $1.6 million, respectively. During the 39 weeks ended September 24, 2013 and September 25, 2012, the total intrinsic value of options exercised was $8.0 million and $8.2 million, respectively. No stock options vested during the 13 or 39 week periods ended September 24, 2013. The total grant date fair value of stock options vested for the 13 week period ended September 25, 2012 was immaterial. The total grant date fair value of stock options vested for the 39 week period ended September 25, 2012 was $0.1 million.

Summary Details for RSUs

	Shares		Weighted- Average Grant Date Fair Value		Weighted-Average Remaining Contractual Term (years)	Aggregate Intrinsic Value

Outstanding at December 25, 2012	1,803,514		$	15.73
Granted	418,870		22.53
Forfeited	(35,096	)	17.17
Vested	(832,467	)	15.92
Outstanding at September 24, 2013	1,354,821		$	17.68	8.65	$	34,900

As of September 24, 2013, with respect to unvested RSUs, there was $13.4 million of unrecognized compensation cost that is expected to be recognized over a weighted-average period of 1.3 years. The vesting terms of the RSUs range from 1.0 to 5.0 years. The total intrinsic value of RSUs vested for the 13 weeks ended September 24, 2013 and September 25, 2012 was $3.7 million and $1.8 million, respectively. For the 39 weeks ended September 24, 2013 and September 25, 2012, the total intrinsic value of RSUs vested was $16.9 million and $7.2 million, respectively.

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

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