Note L - Share-based Employee Compensation

6 Months Ended

Dec. 02, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

NOTE L – SHARE-BASED EMPLOYEE COMPENSATION

We compensate our employees and directors using share-based compensation through the following plans:

The Ruby Tuesday, Inc. Stock Incentive Plan and the Ruby Tuesday, Inc. 1996 Stock Incentive Plan

A committee, appointed by the Board of Directors, administers the Ruby Tuesday, Inc. Stock Incentive Plan (“SIP”) and the Ruby Tuesday, Inc. 1996 Stock Incentive Plan (“1996 SIP”), and has full authority in its discretion to determine the key employees, officers, and non-employee directors to whom share-based incentives are granted and the terms and provisions of share-based incentives. Option grants under the SIP and 1996 SIP can have varying vesting provisions and exercise periods as determined by such committee. A majority of currently outstanding options granted under the SIP and 1996 SIP vest within three years following the date of grant and expire seven years after the date of grant. The SIP and 1996 SIP permit the committee to make awards of shares of common stock, awards of stock options or other derivative securities related to the value of the common stock, and certain cash awards to eligible persons. These discretionary awards may be made on an individual basis or for the benefit of a group of eligible persons. All options awarded under the SIP and 1996 SIP have been awarded with an exercise price equal to the fair market value at the time of grant.

At December 2, 2014, we had reserved a total of 4,356,000 shares of common stock for the SIP and 1996 SIP. Of the reserved shares at December 2, 2014, 2,457,000 were subject to options outstanding. Stock option exercises are settled with the issuance of new shares. Net shares of common stock available for issuance at December 2, 2014 were 1,899,000.

Stock Options

The following table summarizes the activity in options for the 26 weeks ended December 2, 2014 under these stock option plans (in thousands, except per-share data):

	Stock Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (years)		Aggregate Intrinsic Value
Service-based vesting:
Balance at June 3, 2014		1,953		$	8.66
Granted		855			5.92
Exercised		(37	)		6.18
Forfeited		(136	)		9.35
Balance at December 2, 2014		2,635		$	7.77		4.70	$	1,967
Exercisable		1,414		$	8.52		3.38	$	273
Market-based vesting:
Balance at June 3, 2014		735		$	8.82
Forfeited		(160	)		9.34
Balance at December 2, 2014		575		$	8.67		5.37	$	50
Exercisable		-		$	-		-	$	-

At December 2, 2014, there was approximately $2.4 million of unrecognized pre-tax compensation expense related to non-vested stock options. This cost is expected to be recognized over a weighted-average period of 1.5 years.

Restricted Stock

The following table summarizes our restricted stock activity for the 26 weeks ended December 2, 2014 (in thousands, except per-share data):

			Weighted-Average
	Restricted		Grant-Date
	Stock		Fair Value
Performance-based vesting:
Unvested at June 3, 2014		68	$	7.81
Granted		-		-
Vested		-		-
Forfeited		-		-
Unvested at December 2, 2014		68	$	7.81

				Weighted-Average
	Restricted			Grant-Date
	Stock			Fair Value
Service-based vesting:
Unvested at June 3, 2014		1,008		$	8.11
Granted		603			6.01
Vested		(204	)		7.78
Forfeited		(3	)		7.51
Unvested at December 2, 2014		1,404		$	7.26

The fair values of the restricted stock awards reflected above were based on the fair market value of our common stock at the time of grant. At December 2, 2014, unrecognized compensation expense related to restricted stock grants expected to vest totaled approximately $4.8 million and will be recognized over a weighted average vesting period of approximately 1.5 years.

Included within Selling, general, and administrative, net in our Condensed Consolidated Statements of Operations and Comprehensive Loss is share-based compensation expense of $2.0 million and $3.7 million for the 13 and 26 weeks ended December 2, 2014, respectively, and $2.3 million and $4.0 million for the 13 and 26 weeks ended December 3, 2013, respectively.