Texas Roadhouse, Inc. and SubsidiariesNotes to Consolidated Financial Statements(Tabular amounts in thousands, except share and per share data)F-25
cover the costs of the settlement including payments to opt-in members and class attorneys, as well as related settlement
administration costs. The pre-tax charge was recorded in general and administrative expenses in our consolidated
statements of income and comprehensive income.
Occasionally, we are a defendant in litigation arising in the ordinary course of business, including "slip and fall"
accidents, employment related claims, claims related to our service of alcohol, and claims from guests or employees
alleging illness, injury or food quality, health or operational concerns. None of these types of litigation, most of which
are covered by insurance, has had a material effect on us and, as of the date of this report, we are not party to any
litigation that we believe could have a material adverse effect on our business.
(14) 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"). This plan replaced the Texas
Roadhouse, Inc. 2004 Equity Incentive Plan.
The following table summarizes the share - based compensation recorded in the accompanying consolidated
statements of income and comprehensive income:
Fiscal Year Ended
December 25, December 26, December 27,
2018 2017 2016
Labor expense ................................. $ 8,463 $ 7,171 $ 6,124
General and administrative expense ............... 25,520 19,763 19,943
Total share-based compensation expense ........... $ 33,983 $ 26,934 $ 26,067Effective December 28, 2016, we adopted ASU 2016-09 which amends and simplifies the accounting for stock
compensation. As a result of the adoption of ASU 2016-09, we made a change in our accounting for forfeitures to
record as they occur and, as a result, we recorded a $0.1 million cumulative-effect reduction to retained earnings in the
year of adoption under the modified retrospective approach. We elected prospective transition for the requirement to
classify excess tax benefits as an operating activity in the consolidated statement of cash flows. No prior periods have
been adjusted As a result of this adoption, all excess tax benefits and tax deficiencies for restricted shares that vested or
options exercised have been recognized within the income tax provision in the consolidated statements of income and
comprehensive income for the years ended December 25, 2018 and December 26, 2017. See note 9 for further
discussion.
Beginning in 2008, we changed the method by which we provide share-based compensation to our employees by
granting RSUs as a form of share-based compensation. Prior to 2008, we issued stock options as share-based
compensation to our employees. Beginning in 2015, we began granting PSUs to certain of our executives. An RSU is
the conditional right to receive one share of common stock upon satisfaction of the vesting requirement. A PSU is the
conditional right to receive one share of common stock upon meeting a performance obligation along with the
satisfaction of the vesting requirement. In 2017, all remaining unexercised stock options expired leaving only RSUs and