EMPLOYMENT AGREEMENT (W. Kent Taylor)

Exhibit 10.17

Execution Version

EMPLOYMENT AGREEMENT
(W. Kent Taylor)

        THIS EMPLOYMENT AGREEMENT (this " Agreement ") is entered into as of December 26, 2007 by and between TEXAS ROADHOUSE, INC., a Delaware corporation (the " Company "), and W. KENT TAYLOR, a resident of the Commonwealth of Kentucky (" Executive ").

RECITALS

        A.    The Executive is currently the Chairman of the Company.

        B.    The Company desires to continue the employment of Executive, and Executive wishes such employment, as Chairman of the Company, to be governed by the terms and conditions set forth in this Agreement.

AGREEMENT

        NOW, THEREFORE, in consideration of the foregoing premises and the respective agreements of the Company and Executive set forth below, the Company and Executive, intending to be legally bound, agree as follows:

•         1.     Effective Date.     The terms and conditions of Executive's employment hereunder shall become effective as of December 26, 2007 (the " Effective Date ").

          2.     Employment.     Subject to all the terms and conditions of this Agreement, Executive's period of employment under this Agreement shall be the period commencing on the Effective Date and ending on January 7, 2011, (the " Third Anniversary Date "), which term, unless otherwise agreed to by the parties, shall be extended on the Third Anniversary Date and on each anniversary of that date thereafter, for a period of one year thereafter (which term together with any such extensions, if any, shall be hereinafter defined as the " Term "), unless the Executive's employment terminates earlier in accordance with Section 9 hereof. Thereafter, if Executive continues in the employ of the Company, the employment relationship shall continue to be at will, terminable by either Executive or the Company at any time and for any reason, with or without cause, and subject to such terms and conditions established by the Company from time to time.

          3.     Position and Duties.     

          (a)     Employment with the Company.     While Executive is employed by the Company during the Term, Executive shall be employed as Chairman of the Company, and such other titles as the Company may designate, and shall perform such duties and responsibilities as the Company shall assign to him from time to time, including duties and responsibilities relating to the Company's wholly-owned and partially owned subsidiaries and other affiliates.

          (b)     Performance of Duties and Responsibilities.     Executive shall serve the Company faithfully and to the best of his ability and shall devote his full working time, attention and efforts to the business of the Company during his employment with the Company hereunder. While Executive is employed by the Company during the Term, Executive shall report to the Board of Directors of the Company (the " Board "). Executive hereby represents and confirms that he is under no contractual or legal commitments that would prevent him from fulfilling his duties and responsibilities as set forth in this Agreement. During his employment with the Company, Executive shall not accept other employment or engage in other material business activity, except as approved in writing by the Board. Executive may participate in charitable activities and personal investment activities to a reasonable extent, and he may serve as a director of business organizations as approved by the Board, so long as such activities and directorships do not interfere with the performance of his duties and responsibilities hereunder.

•         4.     Compensation.     

          (a)     Base Salary.     While Executive is employed by the Company during the Term, the Company shall pay to Executive a base salary at the rate of Three Hundred Thousand and no/100 Dollars ($300,000.00) per fiscal year, less deductions and withholdings, which base salary shall be paid in accordance with the Company's normal payroll policies and procedures. If the Executive's employment is extended beyond the Third Anniversary Date as provided in Section 2, then on or after the Third Anniversary Date, and annually thereafter, the Executive's base salary may be reviewed by the Compensation Committee of the Board to determine whether it should be increased.

          (b)     Incentive Bonus.     Commencing with the first full fiscal quarter of the Company's 2008 fiscal year and for each full fiscal quarter thereafter that Executive is employed by the Company during the Term, Executive shall be eligible for an annual incentive bonus, to be paid on a quarterly basis, based upon achievement of defined goals established by the Compensation Committee of the Board and in accordance with the terms of any incentive plan of the Company in effect from time to time (the " Incentive Bonus ").

  •           (i)  The level of achievement of the objectives each fiscal quarter and the amount payable as Incentive Bonus shall be determined in good faith by the Compensation Committee. Any Incentive Bonus earned for a fiscal quarter shall be paid to Executive on or before the 90 ^th  day following the last day of such fiscal quarter.

             (ii)  Subject to the achievement of the goals established by the Compensation Committee, as determined by the Compensation Committee, in fiscal year 2008, 2009, and 2010, Executive shall be eligible for an annual target incentive bonus of $200,000. If the Executive's employment is extended beyond the Third Anniversary Date as provided in Section 2, then on or after the Third Anniversary Date, and annually thereafter, the Executive's annual target incentive bonus may be reviewed by the Compensation Committee of the Board to determine whether it should be increased.

          (c)     Benefits.     While Executive is employed by the Company during the Term, Executive shall be entitled to participate in all employee benefit plans and programs of the Company that are available to executive officers generally to the extent that Executive meets the eligibility requirements for each individual plan or program. The Company provides no assurance as to the adoption or continuance of any particular employee benefit plan or program, and Executive's participation in any such plan or program shall be subject to the provisions, rules and regulations applicable thereto.

          (d)     Expenses.     While Executive is employed by the Company during the Term, the Company shall reimburse Executive for all reasonable and necessary out-of-pocket business, travel and entertainment expenses incurred by him in the performance of his duties and responsibilities hereunder, subject to the Company's normal policies and procedures for expense verification and documentation.

          5.     Affiliated Entities.     As used in this Agreement, " Company " shall include the Company and each corporation, limited liability company, partnership, or other entity that is controlled by the Company, or is under common control with the Company (in each case " control " meaning the direct or indirect ownership of 50% or more of all outstanding equity interests), provided, however , that the Executive's title need not be identical for each of the affiliated entities nor the same as that for the Company.

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•         6.     Confidential Information.     Except as required in the performance of Executive's duties as an employee of the Company or as authorized in writing by the Board, Executive shall not, either during Executive's employment with the Company or at any time thereafter, use, disclose or make accessible to any person any confidential information for any purpose. " Confidential Information " means information proprietary to the Company or its suppliers or prospective suppliers and not generally known (including trade secret information) about the Company's suppliers, products, services, personnel, customers, recipes, pricing, sales strategies, technology, computer software code, methods, processes, designs, research, development systems, techniques, finances, accounting, purchasing, and plans. All information disclosed to Executive or to which Executive obtains access, whether originated by Executive or by others, during the period of Executive's employment by the Company (whether before, during, or after the Term), shall be presumed to be Confidential Information if it is treated by the Company as being Confidential Information or if Executive has a reasonable basis to believe it to be Confidential Information. Executive acknowledges that the above-described knowledge and information constitutes a unique and valuable asset of the Company and represents a substantial investment of time and expense by the Company, and that any disclosure or other use of such knowledge or information other than for the sole benefit of the Company would be wrongful and would cause irreparable harm to the Company. During Executive's employment with the Company, Executive shall refrain from committing any acts that would materially reduce the value of such knowledge or information to the Company. The foregoing obligations of confidentiality shall not apply to any knowledge or information that (i) is now or subsequently becomes generally publicly known, or (ii) is required to be disclosed by law or legal process, other than as a direct or indirect result of the breach of this Agreement by Executive. Executive acknowledges that the obligations imposed by this Section 6 are in addition to, and not in place of, any obligations imposed by applicable statutory or common law.

          7.     Noncompetition Covenant.     

          (a)     Agreement Not to Compete.     During Executive's employment with the Company (whether before, during, or after the Term) and during the Restricted Period (as defined below), Executive shall not, directly or indirectly, on his own behalf or on behalf of any person or entity other than the Company, including without limitation as a proprietor, principal, agent, partner, officer, director, stockholder, employee, member of any association, consultant or otherwise, engage in any business that is directly competitive with the business of the Company, including without limitation any business that operates one or more full-service, casual dining steakhouse restaurants, within the 50 United States or any foreign country in which the Company is operating or in which the Executive knows the Company contemplates commencing operations during the Restricted Period. The provisions of this Section 7(a) shall also apply to any business which is directly competitive with any other business which the Company acquires or develops during Executive's employment with the Company.

          (b)     Agreement Not to Hire.     Except as required in the performance of Executive's duties as an employee of the Company, during Executive's employment with the Company (whether before, during, or after the Term) and during the Restricted Period, Executive shall not, directly or indirectly, hire, engage or solicit or induce or attempt to induce to cease working for the Company, any person who is then an employee of the Company or who was an employee of the Company during the six (6) month period immediately preceding Executive's termination of employment with the Company.

          (c)     Agreement Not to Solicit.     Except as required in the performance of Executive's duties as an employee of the Company, during Executive's employment with the Company (whether before, during, or after the Term) and during the Restricted Period, Executive shall not, directly or indirectly, solicit, request, advise, induce or attempt to induce any vendor, supplier or other business contact of the Company to cancel, curtail, cease doing business with, or otherwise adversely change its relationship with the Company.

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•         (d)     Restricted Period.     " Restricted Period " hereunder means the period commencing on the last day of Executive's employment with the Company and ending on the date that is two years following the last day of the Term.

  •           (i)  In the event the Executive's employment is terminated by the Company without Cause following a Change in Control as defined in this Agreement, and before the end of the Term of this Agreement the Restricted Period will begin on the last day of the Executive's employment with the Company and end on the date the last payment of the current base salary is made to the Executive pursuant to paragraph 10(c).

          (e)     Acknowledgment.     Executive hereby acknowledges that the provisions of this Section 7 are reasonable and necessary to protect the legitimate interests of the Company and that any violation of this Section 7 by Executive shall cause substantial and irreparable harm to the Company to such an extent that monetary damages alone would be an inadequate remedy therefor. Therefore, in the event that Executive violates any provision of this Section 7, the Company shall be entitled to an injunction, in addition to all the other remedies it may have, restraining Executive from violating or continuing to violate such provision.

          (f)     Blue Pencil Doctrine.     If the duration of, the scope of or any business activity covered by any provision of this Section 7 is in excess of what is determined to be valid and enforceable under applicable law, such provision shall be construed to cover only that duration, scope or activity that is determined to be valid and enforceable. Executive hereby acknowledges that this Section 7 shall be given the construction that renders its provisions valid and enforceable to the maximum extent, not exceeding its express terms, possible under applicable law.

          (g)     Permitted Equity Ownership.     Ownership by Executive, as a passive investment, of less than 2.5% of the outstanding shares of capital stock of any corporation listed on a national securities exchange or publicly traded in the over-the-counter market shall not constitute a breach of this Section 7.

          8.     Intellectual Property.     

          (a)     Disclosure and Assignment.