(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"). This Plan replaced the Texas Roadhouse, Inc. 2004 Equity Incentive Plan.

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



	13 Weeks Ended
	March 28, 2017		March 29, 2016
Labor expense	$	1,694	$	1,399
General and administrative expense		4,524		4,389
Total share-based compensation expense	$	6,218	$	5,788

Effective December 28, 2016, we adopted Accounting Standards Update No. 2016-09, Compensation – Stock Compensation ("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 principle to account for forfeitures as they occur and, as a result, we recorded a $0.1 million cumulative-effect reduction to retained earnings under the modified retrospective approach. We elected the prospective transition for the requirement to classify excess tax benefits as an operating activity. No prior periods have been adjusted. Additionally, as a result of the new guidance requirements, on a prospective basis, all excess tax benefits and tax deficiencies are recognized within the income tax provision in the income statement in the period in which the restricted shares vest or options are exercised. See note 4 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 two 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. Share-based compensation activity by type of grant as of March 28, 2017 and changes during the 13 weeks then ended are presented below.

Summary Details for RSUs


		Weighted-Average		Weighted-Average
		Grant Date Fair		Remaining Contractual	Aggregate
	Shares	Value		Term (years)	Intrinsic Value
Outstanding at December 27, 2016	919,463	$	37.06
Granted	131,627		42.82
Forfeited	(5,706)		39.40
Vested	(221,842)		36.29
Outstanding at March 28, 2017	823,542	$	38.10	1.3	$	36,362

As of March 28, 2017, with respect to unvested RSUs, there was $18.4 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 approximately 1.0 to 5.0 years. The total intrinsic value of RSUs vested during the 13 weeks ended March 28, 2017 and March 29, 2016 was $9.9 million and $8.1 million, respectively. The excess tax benefit, which was recognized within the income tax provision, associated with vested restricted stock units was $0.6 million for the 13 weeks ended March 28, 2017. The excess tax benefit for the 13 weeks ended March 29, 2016 was $0.3 million which was recorded in additional paid-in-capital in the unaudited condensed consolidated balance sheets.

Summary Details for PSUs

In 2015 and 2016, we granted PSUs to two of our executives subject to an approximate one-year vesting term and the achievement of certain earnings targets, which determine the number of units to vest at the end of the vesting period. 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 vest after meeting the performance and service conditions.

On November 19, 2015, we granted PSUs with a grant date fair value of approximately $3.9 million based on the grant date price per share of $34.11. On January 8, 2017, 188,237 shares vested related to this PSU grant and were distributed during the 13 weeks ended March 28, 2017. On November 9, 2016, we granted PSUs with a grant date fair value of $4.6 million based on a grant date price per share of $39.88. As of March 28, 2017, 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 10 months. The distribution of vested PSUs as common stock related to the November 9, 2016 grants will occur in the first quarter of 2018. For the 13 weeks ended March 28, 2017, the excess tax benefit, recognized within the income tax provision, associated with vested PSUs was $0.8 million. The excess tax loss realized from deductions associated with vested PSUs for the 13 weeks ended March 29, 2016 was $0.1 million which was recorded in additional paid-in-capital in the unaudited condensed consolidated balance sheets.

Summary Details for Stock Options


		Weighted-		Weighted-Average
		Average Exercise		Remaining Contractual	Aggregate
	Shares	Price		Term (years)	Intrinsic Value
Outstanding at December 27, 2016	118,073	$	13.57
Granted	—		—
Cancelled/Expired	(2,344)		15.74
Exercised	(38,186)		14.73
Outstanding at March 28, 2017	77,543	$	12.93	0.4	$	2,420
Exercisable at March 28, 2017	77,543	$	12.93	0.4	$	2,420

No stock options vested during the 13 weeks ended March 28, 2017 or March 29, 2016. For the 13 weeks ended March 28, 2017 and March 29, 2016, the total intrinsic value of options exercised was $1.1 million and $3.3 million, respectively.

For the 13 weeks ended March 28, 2017 and March 29, 2016, cash received before tax withholdings from options exercised was $0.6 million and $1.3 million, respectively. The excess tax benefit, recognized within the income tax provision, associated with options exercised was $0.2 million for the 13 weeks ended March 28, 2017. The excess tax benefit for the 13 weeks ended March 29, 2016 was $1.0 million which was recorded in additional paid-in-capital in the unaudited condensed consolidated balance sheets.