(9) Incentive and Stock Option Plans

As of December 25, 2011, the Company had the following share-based compensation plans:

2000 Stock Option Plan

The Company established a stock option plan (the "2000 Stock Option Plan") which allowed the Company's Board of Directors to grant stock options to directors, officers, key employees, and other key individuals performing services for the Company. The 2000 Stock Option Plan authorized grants of options to purchase up to 1,765,981 shares of authorized but unissued shares of common stock. The Plan provided for granting of options to purchase shares of common stock at an exercise price not less than the fair value of the stock on the date of grant. Options are exercisable at various periods ranging from one to ten years from date of grant. Under the Company's 2000 Stock Option Plan, there are 45,502 shares of common stock issuable upon exercise of currently outstanding options at December 25, 2011. There are no shares available for future grants under the 2000 Stock Option Plan.

2005 Long-Term Equity Incentive Plan

In connection with the initial public offering, the Company adopted the Ruth's Chris Steak House, Inc. 2005 Long-Term Equity Incentive Plan (the "2005 Equity Incentive Plan"), which allows the Company's Board of Directors to grant stock options, restricted stock, restricted stock units, deferred stock units and other equity-based awards to directors, officers, key employees and other key individuals performing services for the Company. The 2005 Equity Incentive Plan provides for granting of options to purchase shares of common stock at an exercise price not less than the fair value of the stock on the date of grant. Options are exercisable, and restricted stock vests, at various periods ranging from one to five years from date of grant. Effective May 22, 2008, the 2005 Equity Incentive Plan was amended, with stockholder approval, to increase the number of shares authorized for issuance under the plan by 1,500,000 shares. Under the 2005 Equity Incentive Plan, as amended, there are 2,757,401 shares of common stock issuable upon exercise of currently outstanding options and restricted stock awards at December 25, 2011, and 487,313 shares available for future grants.

During the fiscal year 2010, the Company issued 830,000 shares of restricted stock to certain employees, executive officers and directors from available shares under its 2005 Equity Incentive Plan, as amended. The shares were issued with a grant date fair market value equal to $4.31 per restricted share. The restricted share price was equal to the closing price of the stock on the date of the grants. For the director grantees, one-third of the restricted stock grant vests on each of the three anniversary dates following the grant date. For the employee and executive officer grantees, the entire stock grant vests on the third anniversary of the grant.

During the fiscal year 2011, the Company issued 255,000 shares of restricted stock to certain employees and executive officers from available shares under its 2005 Equity Incentive Plan, as amended. The shares were issued with a grant date fair market value equal to the closing price of the stock on the date of the grants. The stock grants vest on the third anniversary of the grant date. The Company recorded $2.2, $2.2 and $2.5 million in total stock option and restricted stock compensation expense during fiscal years 2009, 2010 and 2011, respectively, that was classified primarily as general and administrative costs. The Company recognized $0.3, $0.2 and $0.8 million in income tax benefit related to stock-based compensation plans during fiscal years 2009, 2010 and 2011, respectively. As of December 25 2011, the Company had a $4.0 million Additional Paid In Capital (APIC) Pool balance. The APIC Pool balance represents the tax benefit of the cumulative excess of corporate income tax deductions over financial accounting compensation expense recognized for equity based compensation awards which have fully vested. The APIC Pool will increase or decrease each year, dependent upon both the vesting of restricted stock awards and the stock options exercised and/or cancelled. Shortfalls generated by the excess of compensation expense for financial accounting purposes over the corresponding corporate income tax deduction will be charged to the APIC Pool balance rather than income tax expense. Once the APIC pool is fully depleted, the tax effect of any excess of financial accounting expense over the corresponding corporate income tax deduction beyond that point will be treated as income tax expense in the consolidated statement of income.

The following table summarizes stock option activity for fiscal 2011 under all plans:


	December 25, 2011
	Shares			Weighted- Average Exercise Price		Weighted-Average Remaining Contractual Term		Aggregate Intrinsic Value ($000's)
Outstanding at beginning of year		1,855,246		$	7.75
Granted		—			—
Exercised		(26,212	)		1.65
Forfeited		(111,463	)		14.81

Outstanding at end of year		1,717,571		$	7.39		6.18	$	2,158

Options exercisable at year end		1,128,164		$	8.55		5.88	$	1,301

As of December 25, 2011, there was $1.3 million of total unrecognized compensation cost related to non-vested stock options. This cost is expected to be recognized over a weighted-average period of approximately 1.76 years. The total intrinsic value of options exercised in fiscal 2009, 2010 and 2011 was $0.1, $0.2 and $0.1 million, respectively.

During fiscal years 2009, 2010 and 2011, the Company received $24, $60 and $43, respectively, in cash related to the exercise of options and tax benefits of $0.2, $0.1 and $0.0 million, respectively. The exercise of shares were fulfilled from shares reserved for issue under the stock option plans and resulted in an increase in issued shares outstanding.

The weighted-average grant-date per share fair value in dollars of options granted in fiscal 2009 and 2010 was $1.62 and $3.04, respectively. No options were granted in fiscal 2011. The fair value of each option award is estimated on the date of grant using the Black-Scholes option valuation model with the weighted-average assumptions noted in the following table. The Black-Scholes option valuation model requires the input of highly subjective assumptions, including the expected life of the stock-based award. The assumptions listed below represent management's best estimates, but these estimates involve inherent uncertainties and the application of management's judgment. In addition, the Company is required to estimate the expected forfeiture rate and only recognizes expense for those shares expected to vest. If the actual forfeiture rate is materially different from the Company's estimate, the share-based compensation expense could be materially different.

The expected term of options granted is derived from historical data on employee exercise and post-vesting employment termination behavior. Options granted under the Company's 2000 Stock Option Plan and 2005 Equity Incentive Plan are subject to a five year vesting period and have a ten year maximum contractual term. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury constant maturities rate in effect at the time of grant. The Company utilized a blended rate for expected volatility based on the historical volatility of our stock and a representative peer group with a similar expected term of options granted.

The following weighted-average assumptions were used for stock option grants in each year:

		000000000			000000000			000000000
	2009			2010			2011
Expected life		5.2	yrs		5.3	yrs		NA
Risk-free interest rate		2.90	%		2.82	%		NA
Volatility		53.49	%		62.17	%		NA
Expected dividend yield		0.0	%		0.0	%		NA

A summary of the status of non-vested restricted stock as of December 25, 2011 and changes during fiscal 2011 is presented below.


	December 25, 2011
	Shares			Weighted-Average Grant-Date Fair Value Per Share
Non-vested shares at beginning of year		1,103,000		$	4.94
Granted		255,000			5.23
Vested		(142,668	)		6.05
Forfeited		(130,000	)		4.87

Non-vested shares at end of period		1,085,332		$	4.87

As of December 25, 2011, there was $5.3 million of total unrecognized compensation cost related to 1,085,332 shares of non-vested restricted stock. This cost is expected to be recognized over a weighted-average period of approximately 3.38 years. The total fair value of restricted stock vested in fiscal years 2009, 2010 and 2011 was $0.2, $0.5 and $0.8 million, respectively.