Share-based Compensation

3 Months Ended

Mar. 31, 2015

(2) Share-based Compensation

On May 16, 2013, our 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 (“PSUs”). 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 primarily 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
	March 31, 2015		April 1, 2014

Labor expense	$	1,515	$	1,368
General and administrative expense	3,389		2,253
Total share-based compensation expense	$	4,904	$	3,621

Share-based compensation activity by type of grant as of March 31, 2015 and changes during the 13 weeks then ended are presented below.

Summary Details for RSUs

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

Outstanding at December 30, 2014	978,124		$	22.52
Granted	419,018		35.51
Forfeited	(12,327	)	24.76
Vested	(391,002	)	18.69
Outstanding at March 31, 2015	993,813		$	29.46	1.41	$	36,223

As of March 31, 2015, with respect to unvested RSUs, there was $19.9 million of unrecognized compensation cost that is expected to be recognized over a weighted-average period of 1.4 years. The vesting terms of the RSUs range from approximately 1.0 to 5.0 years. The total intrinsic value of RSUs vested during the 13 weeks ended March 31, 2015 and April 1, 2014 was $13.4 million and $11.5 million, respectively.

Summary Details for PSUs

In 2015, we granted PSUs to two of our executives subject to a one-year vesting and the achievement of earnings targets. The number of units which vest at the end of the one-year vesting period is based on performance against the earnings target. Share-based compensation is recognized for the number of units expected to vest at the end of the period and is expensed beginning on the grant date and through the performance period. For each grant, PSUs meeting the performance criteria will vest as of the end of our fiscal year. The distribution of vested performance stock units as common stock will occur in the first quarter of 2016.

We granted 115,000 PSUs with a grant date fair value per share of $34.77. As of March 31, 2015, with respect to unvested PSUs, there was $3.1 million of unrecognized compensation cost that is expected to be recognized over a weighted-average period of 0.8 years.

Summary Details for Share Options

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

Outstanding at December 30, 2014	636,930		$	14.20
Granted	—		—
Forfeited	—		—
Exercised	(105,308	)	15.12
Outstanding at March 31, 2015	531,622		$	14.01	1.69	$	11,917

Exercisable at March 31, 2015	531,622		$	14.01	1.69	$	11,917

The total intrinsic value of options exercised during the 13 weeks ended March 31, 2015 and April 1, 2014 was $2.2 million and $1.5 million, respectively. No stock options vested during the 13 weeks ended March 31, 2015 and April 1, 2014.

- 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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