10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

______________

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended: December 2, 2014

OR

o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from __________ to _________

Commission file number 1-12454

______________

RUBY TUESDAY, INC.

(Exact name of registrant as specified in its charter)

GEORGIA	63-0475239
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

150 West Church Avenue, Maryville, Tennessee 37801

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (865) 379-5700

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o	Accelerated filer x
Non-accelerated filer o (Do not check if a smaller reporting company)	Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

62,037,516

(Number of shares of common stock, $0.01 par value, outstanding as of January 5, 2015)

RUBY TUESDAY, INC.

INDEX

	Page
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
CONDENSED CONSOLIDATED BALANCE SHEETS AS OF
DECEMBER 2, 2014 AND JUNE 3, 2014	4
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE LOSS FOR THE THIRTEEN AND TWENTY-SIX
WEEKS ENDED DECEMBER 2, 2014 AND DECEMBER 3, 2013	5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE TWENTY-SIX WEEKS ENDED
DECEMBER 2, 2014 AND DECEMBER 3, 2013	6
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS	7-30
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS	31-48
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK	48
ITEM 4. CONTROLS AND PROCEDURES	49
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS	49
ITEM 1A. RISK FACTORS	49
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	49
ITEM 3. DEFAULTS UPON SENIOR SECURITIES	50
ITEM 4. MINE SAFETY DISCLOSURES	50
ITEM 5. OTHER INFORMATION	50
ITEM 6. EXHIBITS	50
SIGNATURES	51

2

Special Note Regarding Forward-Looking Information

This Quarterly Report on Form 10-Q contains various forward-looking statements, which represent our expectations or beliefs concerning future events, including one or more of the following:  future financial performance (including our estimates of growth in same-restaurant sales, average sales per restaurant, operating margins, expenses, and other items), future capital expenditures, the effect of strategic initiatives (including statements relating to cost savings initiatives and the benefits of our television marketing), the opening or closing of restaurants by us or our franchisees, sales of our real estate or purchases of new real estate, future borrowings and repayments of debt, availability of financing on terms attractive to the Company, compliance with financial covenants in our debt instruments, payment of dividends, stock and bond repurchases, restaurant acquisitions, and changes in senior management and in the Board of Directors.  We caution the reader that a number of important factors and uncertainties could, individually or in the aggregate, cause our actual results to differ materially from those included in the forward-looking statements, including, without limitation, the following:

·   general economic conditions;

·   changes in promotional, couponing and advertising strategies;

·   changes in our customers’ disposable income;

·   consumer spending trends and habits;

·   increased competition in the restaurant market;

·   governmental laws and regulations, including those affecting labor and employee benefit costs, such as further potential increases in state and federally mandated minimum wages, and healthcare reform;

·   the impact of pending litigation;

·   customers’ acceptance of changes in menu items;

·   changes in the availability and cost of capital;

·   potential limitations imposed by debt covenants under our debt instruments;

·   weather conditions in the regions in which Company-owned and franchised restaurants are operated;

·   costs and availability of food and beverage inventory, including supply and delivery shortages or interruptions;

·   significant fluctuations in energy prices;

·   security breaches of our customers’ or employees’ confidential information or personal data or the failure of our information technology and computer systems;

·   our ability to attract and retain qualified managers, franchisees and team members;

·   impact of adoption of new accounting standards;

·   impact of food-borne illnesses resulting from an outbreak at either one of our restaurant concepts or other competing restaurant concepts;

·   effects of actual or threatened future terrorist attacks in the United States; and

·   other risk factors discussed in our Annual Report on Form 10-K for the year ended June 3, 2014 in Part I, Item 1A. Risk Factors.

3

PART I — FINANCIAL INFORMATION

ITEM 1.

RUBY TUESDAY, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS EXCEPT PER-SHARE DATA)

(UNAUDITED)

	DECEMBER 2,			JUNE 3,
	2014			2014
Assets	(NOTE A)
Current assets:
Cash and cash equivalents	$	48,170		$	51,326
Accounts receivable		5,631			4,861
Inventories:
Merchandise		18,893			12,924
China, silver and supplies		7,827			8,250
Income tax receivable		3,174			2,133
Deferred income taxes		–			3,397
Prepaid rent and other expenses		12,659			12,216
Assets held for sale		7,075			4,683
Total current assets		103,429			99,790
Property and equipment, net		771,826			794,846
Other assets		59,460			61,791
Total assets	$	934,715		$	956,427
Liabilities & Shareholders’ Equity
Current liabilities:
Accounts payable	$	26,965		$	26,201
Accrued liabilities:
Taxes, other than income and payroll		10,597			11,221
Payroll and related costs		21,586			22,637
Insurance		6,324			5,962
Deferred revenue – gift cards		16,067			16,584
Rent and other		22,897			26,402
Current portion of long-term debt, including capital leases		4,506			4,816
Deferred income taxes		58			–
Total current liabilities		109,000			113,823
Long-term debt and capital leases, less current maturities		247,915			253,875
Deferred income taxes		2,224			3,500
Deferred escalating minimum rent		49,742			48,827
Other deferred liabilities		66,503			75,193
Total liabilities		475,384			495,218
Commitments and contingencies (Note N)
Shareholders’ equity:
Common stock, $0.01 par value; (authorized: 100,000 shares;
issued and outstanding: 62,072 shares at 12/02/14; 61,442 shares at 6/03/14)		621			614
Capital in excess of par value		80,165			76,269
Retained earnings		388,518			395,226
Deferred compensation liability payable in
Company stock		591			622
Company stock held by Deferred Compensation Plan		(591	)		(622	)
Accumulated other comprehensive loss		(9,973	)		(10,900	)
Total shareholders’ equity		459,331			461,209
Total liabilities & shareholders’ equity	$	934,715		$	956,427

                   The accompanying notes are an integral part of the condensed consolidated financial statements.

4

RUBY TUESDAY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE LOSS

(IN THOUSANDS EXCEPT PER-SHARE DATA)

(UNAUDITED)

	THIRTEEN WEEKS ENDED						TWENTY-SIX WEEKS ENDED
		DECEMBER 2,			DECEMBER 3,			DECEMBER 2,			DECEMBER 3,
		2014			2013			2014			2013
		(NOTE A)						(NOTE A)
Revenue:
Restaurant sales and operating revenue	$	261,206		$	274,719		$	540,663		$	562,811
Franchise revenue		1,453			1,490			3,178			3,072
		262,659			276,209			543,841			565,883
Operating costs and expenses:
Cost of goods sold		71,646			77,669			146,793			157,607
Payroll and related costs		93,964			97,517			189,806			200,250
Other restaurant operating costs		60,097			65,289			119,896			132,823
Depreciation		12,538			13,915			25,196			28,124
Selling, general and administrative, net		27,292			37,031			58,193			74,046
Closures and impairments, net		1,075			14,143			2,557			22,176
Interest expense, net		5,915			6,620			11,337			13,373
Loss on extinguishment of debt		–			672			–			1,183
		272,527			312,856			553,778			629,582
Loss from continuing operations before
income taxes		(9,868	)		(36,647	)		(9,937	)		(63,699	)
Benefit for income taxes from continuing
operations		(595	)		(1,910	)		(3,229	)		(7,063	)
Loss from continuing operations		(9,273	)		(34,737	)		(6,708	)		(56,636	)
Income from discontinued operations, net of tax		–			354			–			11
Net loss	$	(9,273	)	$	(34,383	)	$	(6,708	)	$	(56,625	)
Other comprehensive income:
Pension liability reclassification		464			477			927			955
Total comprehensive loss	$	(8,809	)	$	(33,906	)	$	(5,781	)	$	(55,670	)
Basic loss per share:
Loss from continuing operations	$	(0.15	)	$	(0.58	)	$	(0.11	)	$	(0.94	)
Income from discontinued operations		–			0.01			–			–
Net loss per share	$	(0.15	)	$	(0.57	)	$	(0.11	)	$	(0.94	)
Diluted loss per share:
Loss from continuing operations	$	(0.15	)	$	(0.58	)	$	(0.11	)	$	(0.94	)
Income from discontinued operations		–			0.01			–			–
Net loss per share	$	(0.15	)	$	(0.57	)	$	(0.11	)	$	(0.94	)
Weighted average shares:
Basic		60,534			60,196			60,476			60,111
Diluted		60,534			60,196			60,476			60,111

                 The accompanying notes are an integral part of the condensed consolidated financial statements.

5

RUBY TUESDAY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(IN THOUSANDS)

(UNAUDITED)

	TWENTY-SIX WEEKS ENDED
	DECEMBER 2, 2014		DECEMBER 3, 2013
	(NOTE A)
Operating activities:
Net loss	$      (6,708	)	$    (56,625	)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation	25,196		28,124
Amortization of intangibles	1,162		1,370
Deferred income taxes	(2,863	)	(259	)
Loss on impairments, including disposition of assets	3,359		17,746
Loss on extinguishment of debt	–		1,183
Share-based compensation expense	3,720		4,049
Excess tax benefits from share-based compensation	(22	)	(283	)
Lease reserve adjustments	761		4,205
Deferred escalating minimum rent	1,298		1,397
Other, net	793		1,847
Changes in operating assets and liabilities:
Receivables	(842	)	(937	)
Inventories	(5,546	)	3,457
Income taxes	(1,041	)	(3,443	)
Prepaid and other assets	(737	)	(1,187	)
Accounts payable, accrued and other liabilities	(8,573	)	(216	)
Net cash provided by operating activities	9,957		428
Investing activities:
Purchases of property and equipment	(13,821	)	(17,697	)
Proceeds from sale-leaseback transactions, net	–		5,637
Proceeds from disposal of assets	5,604		8,457
Insurance proceeds from property claims	135		218
Reductions in Deferred Compensation Plan assets	392		115
Other, net	754		(146	)
Net cash used by investing activities	(6,936	)	(3,416	)
Financing activities:
Principal payments on long-term debt and capital leases	(6,266	)	(25,806	)
Stock repurchases	(55	)	(540	)
Payments for debt issuance costs	(75	)	(1,718	)
Proceeds from exercise of stock options	197		1,480
Excess tax benefits from share-based compensation	22		283
Net cash used by financing activities	(6,177	)	(26,301	)
Decrease in cash and cash equivalents	(3,156	)	(29,289	)
Cash and cash equivalents:
Beginning of year	51,326		52,907
End of quarter	$    48,170		$     23,618
Supplemental disclosure of cash flow information:
Cash paid for:
Interest, net of amount capitalized	$    10,358		$     11,813
Income taxes, net	$      1,402		$          477
Significant non-cash investing and financing activities:
Retirement of fully depreciated assets	$      8,243		$     11,292
Reclassification of properties to assets held for sale	$      4,746		$       3,816
Property and equipment purchases included in accounts payable	$             –		$       1,210

                 The accompanying notes are an integral part of the condensed consolidated financial statements.

6

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE A – BASIS OF PRESENTATION

Ruby Tuesday, Inc., including its wholly-owned subsidiaries (“RTI,” the “Company,” “we,” and/or “our”), owns and operates Ruby Tuesday® casual dining and Lime Fresh Mexican Grill® (“Lime Fresh”) fast casual restaurants.  We also franchise the Ruby Tuesday and Lime Fresh concepts in selected domestic and international markets.  The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”).  Accordingly, they do notinclude all of the information and footnotes required by U.S. generally accepted accounting principles (“GAAP”) for complete financial statements.  In the opinion of management, all adjustments (consisting only of normal recurring entries) considered necessary for a fair presentation have been included.  The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes.  Actual results could differ from those estimates.  Operating results for the 13- and 26-week periods ended December 2, 2014 are not necessarily indicative of results that may be expected for the 52-week year ending June 2, 2015.

The Condensed Consolidated Balance Sheet at June 3, 2014 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by GAAP.

For further information, refer to the consolidated financial statements and footnotes thereto included in RTI’s Annual Report on Form 10-K for the fiscal year ended June 3, 2014.

NOTE B – LOSS PER SHARE AND STOCK REPURCHASES

Basic loss per share is computed by dividing net loss by the weighted average number of common shares outstanding during each period presented.  Diluted loss per share gives effect to stock options and restricted stock outstanding during the applicable periods, if dilutive.  The following table reflects the calculation of weighted-average common and dilutive potential common shares outstanding as presented in the accompanying Condensed Consolidated Statements of Operations and Comprehensive Loss (in thousands, except per share data):

	Thirteen weeks ended				Twenty-six weeks ended
	December 2,     2014		December 3,   2013		December 2,     2014		December 3,     2013
Loss from continuing operations	$	(9,273)	$	(34,737)	$	(6,708)	$	(56,636)
Income from discontinued operations, net of tax		–		354		–		11
Net loss	$	(9,273)	$	(34,383)	$	(6,708)	$	(56,625)
Weighted-average common
shares outstanding		60,534		60,196		60,476		60,111
Dilutive effect of stock
options and restricted stock		–		–		–		–
Weighted average common
and dilutive potential
common shares outstanding		60,534		60,196		60,476		60,111
Loss per share – Basic
Loss from continuing operations	$	(0.15)	$	(0.58)	$	(0.11)	$	(0.94)
Income from discontinued operations		–		0.01		–		–
Net loss per share	$	(0.15)	$	(0.57)	$	(0.11)	$	(0.94)
Loss per share – Diluted
Loss from continuing operations	$	(0.15)	$	(0.58)	$	(0.11)	$	(0.94)
Income from discontinued operations		–		0.01		–		–
Net loss per share	$	(0.15)	$	(0.57)	$	(0.11)	$	(0.94)

7

Stock options with an exercise price greater than the average market price of our common stock and certain options and restricted shares with unrecognized compensation expense do not impact the computation of diluted loss per share because the effect would be anti-dilutive.  The following table summarizes stock options and restricted shares that did not impact the computation of diluted loss per share because their inclusion would have had an anti-dilutive effect (in thousands):

	Thirteen weeks ended				Twenty-six weeks ended
	December 2,  2014		December 3,  2013		December 2,  2014		December 3,  2013
Stock options	3,301	*	2,839	*	3,102	*	2,977	*
Restricted shares	1,468	*	1,074	*	1,319	*	1,160	*
Total	4,769		3,913		4,421		4,137

*Due to a net loss from continuing operations for the 13 and 26 weeks ended December 2, 2014 and December 3, 2013, all outstanding share-based awards were excluded from the computation of diluted loss per share.

During the first two quarters of fiscal year 2015, we repurchased an insignificant number of shares of our common stock at a cost of $0.1 million.  As of December 2, 2014, the total number of remaining shares authorized by our Board of Directors to be repurchased was 11.8 million.  All shares repurchased during the first two quarters were cancelled as of December 2, 2014.

NOTE C – FRANCHISE PROGRAMS

As of December 2, 2014, our domestic and international franchisees collectively operated 81 Ruby Tuesday restaurants and eight Lime Fresh restaurants.  We do not own any equity interest in our franchisees.

Under the terms of the franchise operating agreements, we charge a royalty fee (generally 4.0% of monthly gross sales for our Ruby Tuesday concept franchisees and 5.25% of monthly gross sales for our Lime Fresh concept franchisees) and require all domestic franchisees to contribute a percentage, 1.5% as of December 2, 2014, of monthly gross sales to a national advertising fund formed to cover their pro rata portion of the production and airing costs associated with our national advertising campaign.  Under the terms of those agreements, we can charge up to 3.0% of monthly gross sales for this national advertising fund.

Advertising amounts received from domestic franchisees are considered by RTI to be reimbursements, recorded on an accrual basis as earned, and have been netted against Selling, general and administrative, net in the Condensed Consolidated Statements of Operations and Comprehensive Loss.

In addition to the advertising fee discussed above, our Ruby Tuesday concept franchise agreements allow us to charge up to a 2.0% support service fee and a 1.5% marketing and purchasing fee.  For the 13 and 26 weeks ended December 2, 2014, we recorded $0.2 million and $0.7 million, respectively, and for the 13 and 26 weeks ended December 3, 2013, we recorded $0.3 million and $0.5 million, respectively, in support service and marketing and purchasing fees, which were an offset to Selling, general and administrative, net in our Condensed Consolidated Statements of Operations and Comprehensive Loss.

8

NOTE D – DISCONTINUED OPERATIONS

In an effort to focus primarily on the sales turnaround of our core Ruby Tuesday concept and secondly, to improve the financial performance of our Lime Fresh concept, we completed the closure of our Marlin & Ray’s, Wok Hay, and Truffles restaurants during the fourth quarter of fiscal year 2013.  We have classified the results of operations of our Company-owned Marlin & Ray’s, Wok Hay, and Truffles concepts as discontinued operations for the 13 and 26 weeks ended December 3, 2013.  The results of operations of our discontinued operations are as follows (in thousands):

	Thirteen  weeks ended	Twenty-six  weeks ended
	December 3, 2013	December 3,  2013
Restaurant sales and operating revenue	$              –	$              –
Gain/(loss) before income taxes	$          453	$          (75)
Provision/(benefit) for income taxes	99	(86)
Income from discontinued operations	$          354	$             11

NOTE E – ACCOUNTS RECEIVABLE

Accounts receivable – current consist of the following (in thousands):

	December 2, 2014		June 3, 2014
Rebates receivable	$	706	$	930
Amounts due from franchisees		1,725		1,281
Third-party gift card sales		1,555		1,636
Other receivables		1,645		1,014
	$	5,631	$	4,861

We negotiate purchase arrangements, including price terms, with designated and approved suppliers on behalf of us and our franchise system.  We receive various volume discounts and rebates based on purchases for our Company-owned restaurants from numerous suppliers.

Amounts due from franchisees consist of royalties, license and other miscellaneous fees, a substantial portion of which represents current and recently-invoiced billings.

As of December 2, 2014 and June 3, 2014, Other receivables consisted primarily of amounts due from our distributor ($0.8 million and $0.4 million, respectively), sales and other miscellaneous tax refunds ($0.2 million for each period), and, as of December 2, 2014, settlement proceeds from a lawsuit in which we were a class member ($0.2 million).

NOTE F – INVENTORIES

Our merchandise inventory was $18.9 million and $12.9 million as of December 2, 2014 and June 3, 2014, respectively.  In order to ensure adequate supply and competitive pricing, we sometimes purchase lobster in advance of our needs and store it in third-party facilities prior to our distributor taking possession of the inventory.  The increase in our merchandise inventory from the end of the prior fiscal year is due primarily to advance purchases of lobster during the second quarter of fiscal year 2015.

9

NOTE G – PROPERTY, EQUIPMENT, ASSETS HELD FOR SALE, OPERATING LEASES, AND SALE-LEASEBACK TRANSACTIONS

Property and equipment, net, is comprised of the following (in thousands):

	December 2, 2014		June 3, 2014
Land	$	212,282	$	214,277
Buildings		426,800		430,988
Improvements		364,520		365,599
Restaurant equipment		249,436		248,852
Other equipment		86,658		84,876
Construction in progress and other*		17,998		22,246
		1,357,694		1,366,838
Less accumulated depreciation		585,868		571,992
	$	771,826	$	794,846

* Included in Construction in progress and other as of December 2, 2014 and June 3, 2014 are $14.7 million and $18.4 million, respectively, of assets held for sale that are not classified as such in the Condensed Consolidated Balance Sheets as we do not expect to sell these assets within the next 12 months.  These assets primarily consist of parcels of land upon which we have no intention to build restaurants and closed properties which include a building.

Included within the current assets section of our Condensed Consolidated Balance Sheets at December 2, 2014 and June 3, 2014 are amounts classified as held for sale totaling $7.1 million and $4.7 million, respectively.  Assets held for sale primarily consist of parcels of land upon which we have no intention to build restaurants, land and buildings of closed restaurants, and various liquor licenses.  During the 13 and 26 weeks ended December 2, 2014, we sold surplus properties with carrying values of $4.5 million for both periods, at net gains of $0.8 million and $1.1 million, respectively.  Cash proceeds, net of broker fees, from these sales during the 13 and 26 weeks ended December 2, 2014 totaled $5.3 million and $5.6 million, respectively.  During the 13 and 26 weeks ended December 3, 2013, we sold surplus properties with carrying values of $5.6 million and $8.2 million, respectively, at net gains of $0.3 million and $0.2 million, respectively.  Cash proceeds, net of broker fees, from these sales during the 13 and 26 weeks ended December 3, 2013 totaled $5.8 million and $8.4 million, respectively.

Approximately 56% of our 683 Company-owned restaurants are located on leased properties.  Of these, approximately 68% are land leases only; the other 32% are for both land and building.  The initial terms of these leases expire at various dates over the next 22 years.  These leases may also contain required increases in minimum rent at varying times during the lease term and have options to extend the terms of the leases at a rate that is included in the original lease agreement.  Most of our leases require the payment of additional (contingent) rent that is based upon a percentage of restaurant sales above agreed upon sales levels for the year.  These sales levels vary for each restaurant and are established in the lease agreements.  We recognize contingent rental expense (in annual as well as interim periods) prior to the achievement of the specified target that triggers the contingent rental expense, provided that achievement of that target is considered probable.

During the 26 weeks ended December 3, 2013, we completed sale-leaseback transactions of the land and building for three Company-owned Ruby Tuesday concept restaurants for gross cash proceeds of $5.9 million, exclusive of transaction costs of approximately $0.3 million.  Equipment was not included.  The carrying value of the properties sold was $4.8 million.  None of these sale-leaseback transactions occurred during the 13 weeks ended December 3, 2013.  The leases have been classified as operating leases and have initial terms of 15 years, with renewal options of up to 20 years following a rent reset based on fair market value at the end of the initial term.  Net proceeds from fiscal year 2014’s sale-leaseback transactions were used for general corporate purposes, including debt payments and the repurchase of shares of our common stock.

10

We realized gains on these transactions during the 26 weeks ended December 3, 2013 of $0.8 million, which have been deferred and are being recognized on a straight-line basis over the initial terms of the leases.  The current portion of the deferred gains on all sale-leaseback transactions was $1.1 million as of each of December 2, 2014 and June 3, 2014, and is included in Accrued liabilities – Rent and other in our Condensed Consolidated Balance Sheets.  The long-term portion of the deferred gains on all sale-leaseback transactions was $12.4 million and $13.0 million as of December 2, 2014 and June 3, 2014, respectively, and is included in Other deferred liabilities in our Condensed Consolidated Balance Sheets.  Amortization of the deferred gains of $0.3 million and $0.5 million for each of the 13- and 26-week periods ended December 2, 2014 and December 3, 2013, respectively, is included within Other restaurant operating costs in our Condensed Consolidated Statements of Operations and Comprehensive Loss.

NOTE H – LONG-TERM DEBT AND CAPITAL LEASES

Long-term debt and capital lease obligations consist of the following (in thousands):

	December 2, 2014		June 3, 2014
Senior unsecured notes	$	215,000	$	215,000
Unamortized discount		(2,336)		(2,503)
Senior unsecured notes less unamortized discount		212,664		212,497
Revolving credit facility		–		–
Mortgage loan obligations		39,002		45,252
Unamortized premium on mortgage loan obligations		570		741
Capital lease obligations		185		201
		252,421		258,691
Less current maturities		4,506		4,816
	$	247,915	$	253,875

On May 14, 2012, we entered into an indenture (the “Indenture”) among the Company, certain subsidiaries of the Company as guarantors and Wells Fargo Bank, National Association as trustee, governing the Company’s $250.0 million aggregate principal amount of 7.625% senior notes due 2020 (the “Senior Notes”).  The Senior Notes were issued at a discount of $3.7 million, which is being amortized using the effective interest method over the eight-year term of the notes.

The Senior Notes are guaranteed on a senior unsecured basis by our existing and future domestic restricted subsidiaries, subject to certain exceptions.  They rank equal in right of payment with our existing and future senior indebtedness and senior in right of payment to any of our future subordinated indebtedness.  The Senior Notes are effectively subordinated to all of our secured debt, including borrowings outstanding under our revolving credit facility, to the extent of the value of the assets securing such debt and structurally subordinated to all of the liabilities of our existing and future subsidiaries that do not guarantee the Senior Notes.

Interest on the Senior Notes is calculated at 7.625% per annum, payable semiannually on each May 15 and November 15 to holders of record on the May 1 or November 1 immediately preceding the interest payment date.  Accrued interest on the Senior Notes and our other long-term debt and capital lease obligations is included in Accrued liabilities – Rent and other in our Condensed Consolidated Balance Sheets.  The Senior Notes mature on May 15, 2020.

At any time prior to May 15, 2016, we may redeem the Senior Notes, in whole or in part, at a redemption price equal to 100% of the principal amount, plus an applicable “make-whole” premium and accrued and unpaid interest.  At any time on or after May 15, 2016, we may redeem the Senior Notes, in whole or in part, at the redemption prices specified in the Indenture plus accrued and unpaid interest.  At any time prior to May 15, 2015, we may redeem up to 35% of the Senior Notes from the proceeds of certain equity offerings.  There is no sinking fund for the Senior Notes.

The Indenture contains covenants that limit, among other things, our ability and the ability of certain of our subsidiaries to (i) incur or guarantee additional indebtedness; (ii) declare or pay dividends, redeem stock or make other distributions to stockholders; (iii) make certain investments; (iv) create liens or use assets as security in other transactions; (v) merge or consolidate, or sell, transfer, lease or dispose of substantially all of their assets; (vi) enter into transactions with affiliates; and (vii) sell or transfer certain assets.  These

11

covenants are subject to a number of important exceptions and qualifications, as described in the Indenture, and certain covenants will not apply at any time when the Senior Notes are rated investment grade by the Rating Agencies, as defined in the Indenture.  The Indenture also provides for events of default, which, if any of them occurs, would permit or require the principal, premium, if any, interest and any other monetary obligations on all the then outstanding Senior Notes to be due and payable immediately.

Under the terms of our December 2013 four-year revolving credit agreement discussed below (the “Senior Credit Facility”) we are allowed, under certain circumstances, to repurchase up to $20.0 million of the Senior Notes in any fiscal year.  We did not repurchase any Senior Notes during the first two quarters of fiscal year 2015.  The balance on the Senior Notes was $215.0 million at December 2, 2014.

On December 3, 2013, we entered into the Senior Credit Facility under which we may borrow up to $50.0 million with the option, subject to certain conditions, to increase the facility by up to $35.0 million.  The Senior Credit Facility, which was obtained to provide access to capital for general corporate purposes, replaced a previous five-year $200.0 million credit facility that was set to expire in December 2015.  The terms of the Senior Credit Facility provide for a $25.0 million sublimit for the issuance of standby letters of credit.

Under the terms of the Senior Credit Facility, interest rates charged on borrowings can vary depending on the interest rate option we choose to utilize.  Our options for the rate are a Base Rate or LIBOR, plus an applicable margin.  The Base Rate is defined as the highest of the issuing bank’s prime rate, the Federal Funds rate plus 0.50%, or the Adjusted LIBO rate (as defined in the Senior Credit Facility) plus 1.0%.  The applicable margin for the LIBOR rate-based option is a percentage ranging from 2.50% to 3.50% and for the Base Rate option is a percentage ranging from 1.50% to 2.50%.  We pay commitment fees quarterly ranging from 0.40% to 0.75% on the unused portion of the Senior Credit Facility.

As security for the Senior Credit Facility, we granted the lenders liens and security interests in substantially all of the shares of capital stock of the Company and each of our present and future subsidiaries, substantially all of the personal property of the Company and each of our present and future subsidiaries, and the real property, improvements, and fixtures of 49 Ruby Tuesday restaurants.  The real property, improvements, and fixtures of the 49 restaurants pledged as collateral appraised at $101.4 million at the time of the transaction and have a December 2, 2014 net book value of $80.0 million.

Under the Senior Credit Facility, we had no borrowings outstanding at December 2, 2014.  After consideration of letters of credit outstanding, we had $37.5 million available under the Senior Credit Facility as of December 2, 2014.

The Senior Credit Facility contains a number of customary affirmative and negative covenants that, among other things, limit or restrict our ability to incur liens, engage in mergers or other fundamental changes, make acquisitions, investments, loans and advances, pay dividends or other distributions, sell or otherwise dispose of certain assets, engage in certain transactions with affiliates, enter into burdensome agreements or certain hedging agreements, amend organizational documents, change accounting practices, incur additional indebtedness and prepay other indebtedness.  In addition, under the Senior Credit Facility, we are required to comply with financial covenants relating to the maintenance of a maximum leverage ratio and a minimum fixed charge coverage ratio.  The terms of the Senior Credit Facility require us to maintain a maximum leverage ratio of no more than 4.85 to 1.0 and a minimum fixed charge coverage ratio of 1.35 to 1.0 for the quarter ended December 2, 2014.  The minimum required ratios fluctuate thereafter as provided in the Senior Credit Facility.

The Senior Credit Facility terminates no later than December 3, 2017.  Upon the occurrence of an event of default, the lenders may terminate the loan commitments, accelerate all loans and exercise any of their rights under the Senior Credit Facility and any ancillary loan documents.

On December 3, 2013, in connection with our entry into the Senior Credit Facility, the Company and certain of its subsidiaries entered into loan modification agreements (the “Loan Modification Agreements”) with certain mortgage lenders to, among other things, provide waivers and consents under certain of our mortgage loan obligations to enter into the Senior Credit Facility.  The Loan Modification Agreements also, among other things, amend certain financial reporting requirements under the specified loans and modify and/or provide for certain financial covenants for the specified loans, including the minimum consolidated

fixed charge coverage ratio and the minimum adjusted total debt to EBITDAR ratio.

12

Our $39.0 million in mortgage loan obligations as of December 2, 2014 consists of various loans acquired upon franchise acquisitions.  These loans, which mature between January 2015 and November 2022, have balances which range from negligible to $7.5 million and interest rates of 7.60% to 10.92%.  Many of the properties acquired from franchisees collateralize the loans outstanding.

During the 13 weeks ended December 2, 2014, we prepaid and retired three mortgage loan obligations with an aggregate balance of $3.9 million using cash on hand.  Additionally, we paid $0.4 million in prepayment premiums in connection with the retirement of these obligations.

NOTE I – CLOSURES AND IMPAIRMENTS EXPENSE

Closures and impairments expense includes the following for the 13 and 26 weeks ended December 2, 2014 and December 3, 2013 (in thousands):

	Thirteen weeks ended		Twenty-six weeks ended
	December 2,  2014	December 3,  2013	December 2,  2014	December 3,  2013
Closures and impairments from
continuing operations:
Property impairments	$ 1,216	$ 12,318	$ 2,272	$ 17,248
Closed restaurant lease reserves	295	1,702	761	4,297
Other closing costs	395	110	628	578
(Gain)/loss on sale of surplus properties	(831)	13	(1,104)	53
Closures and impairments, net	$ 1,075	$ 14,143	$ 2,557	$ 22,176
Closures and impairments from
discontinued operations		$ (453)		$ 65

A rollforward of our reserve for future lease obligations associated with closed properties is as follows (in thousands):

	Reserve for Lease Obligations
Balance at June 3, 2014	$	10,873
Closing expense including rent and other lease charges		761
Payments		(2,309	)
Other		(340	)
Balance at December 2, 2014	$	8,985

The amounts comprising future lease obligations in the table above are estimated using certain assumptions, including the period of time it will take to settle the lease with the landlord or find a suitable sublease tenant, and the amount of actual future cash payments could differ from our recorded lease obligations.  Of the total future lease obligations included in the table above, $8.8 million and $10.5 million are included within the Accrued liabilities – Rent and other caption in our Consolidated Balance Sheets as of December 2, 2014 and June 3, 2014, respectively.  The actual amount of any cash payments made by the Company for lease contract termination costs will be dependent upon ongoing negotiations with the landlords of the leased restaurant properties.

NOTE J – EMPLOYEE POST-EMPLOYMENT BENEFITS

We sponsor three defined benefit pension plans for active employees and offer certain postretirement benefits for retirees.  A summary of each of these is presented below.

Retirement Plan

RTI sponsors the Morrison Restaurants Inc. Retirement Plan (the “Retirement Plan”).  Effective December 31, 1987, the Retirement Plan was amended so that no additional benefits would accrue and no new participants may enter the Retirement Plan after that date.  Participants receive benefits based upon salary and length of service.

13

Minimum funding for the Retirement Plan is determined in accordance with the guidelines set forth in employee benefit and tax laws.  From time to time we may contribute additional amounts as we deem appropriate.  We estimate that we will be required to make contributions totaling $0.3 million to the Retirement Plan during the remainder of fiscal year 2015.

Executive Supplemental Pension Plan and Management Retirement Plan

Under these unfunded defined benefit pension plans, eligible employees earn supplemental retirement income based upon salary and length of service, reduced by social security benefits and amounts otherwise receivable under other specified Company retirement plans.  Effective June 1, 2001, the Management Retirement Plan was amended so that no additional benefits would accrue and no new participants may enter the plan after that date.

Included in our Condensed Consolidated Balance Sheets as of December 2, 2014 and June 3, 2014 are amounts within Accrued liabilities: Payroll and related costs of $3.3 million as of both dates and amounts within Other deferred liabilities of $32.3 million and $32.5 million, respectively, relating to our three defined benefit pension plans.

Postretirement Medical and Life Benefits

Our Postretirement Medical and Life Benefits plans provide medical and life insurance benefits to certain retirees.  The medical plan requires retiree cost sharing provisions that are more substantial for employees who retire after January 1, 1990.

The following tables detail the components of net periodic benefit costs and the amounts recognized in our Condensed Consolidated Financial Statements for the Retirement Plan, Management Retirement Plan, and the Executive Supplemental Pension Plan (collectively, the “Pension Plans”) and the Postretirement Medical and Life Benefits plans (in thousands):

	Pension Benefits
	Thirteen weeks ended						Twenty-six weeks ended
	December 2,			December 3,			December 2,			December 3,
	2014			2013			2014			2013
Service cost	$	75		$	89		$	150		$	178
Interest cost		444			434			887			868
Expected return on plan assets		(125	)		(111	)		(249	)		(222	)
Recognized actuarial loss		430			428			860			856
Net periodic benefit cost	$	824		$	840		$	1,648		$	1,680
	Postretirement Medical and Life Benefits
	Thirteen weeks ended						Twenty-six weeks ended
	December 2,			December 3,			December 2,			December 3,
	2014			2013			2014			2013
Service cost	$	1		$	3		$	2		$	6
Interest cost		11			17			23			34
Amortization of prior service cost (a)		–			(11	)		–			(22	)
Recognized actuarial loss		34			61			67			122
Net periodic benefit cost	$	46		$	70		$	92		$	140

(a)   Prior service costs are amortized on a straight-line basis over the average remaining service period of employees expected to receive benefits.

14

During the 13 and 26 weeks ended December 2, 2014 and December 3, 2013, we reclassified recognized actuarial losses and amortized prior service costs out of accumulated other comprehensive loss and into pension expense, which is included in Selling, general and administrative, net within our Condensed Consolidated Statements of Operations and Comprehensive Loss, as follows (in thousands):

	Thirteen weeks ended					Twenty-six weeks ended
	December 2, 2014		December 3, 2013			December 2, 2014		December 3, 2013
Recognized actuarial loss	$	464	$	488		$	927	$	977
Amortization of prior service cost		–		(11	)		–		(22	)
Pension liability reclassification	$	464	$	477		$	927	$	955

The following table is a rollforward of accumulated other comprehensive loss for the 26 weeks ended December 2, 2014 (in thousands):

	Accumulated Other Comprehensive Loss
Balance at June 3, 2014	$	(10,900	)
Pension liability reclassification		927
Balance at December 2, 2014	$	(9,973	)

We also sponsor two defined contribution retirement savings plans. Information regarding these plans is included in our Annual Report on Form 10-K for the fiscal year ended June 3, 2014.

Executive Separations

On June 26, 2014, our then Executive Vice President, Chief Financial Officer left the Company.  Additionally, our Senior Vice President, Chief Development Officer also left the Company on July 24, 2014.  During the 26 weeks ended December 2, 2014, we recorded severance expense and made severance payments of $0.3 million in connection with the separation agreements for these former executives.

As of December 2, 2014, liabilities of $0.3 million, representing unpaid obligations in connection with the employee separations, were included within Accrued liabilities: Payroll and related costs in our Condensed Consolidated Balance Sheet.  A rollforward of our obligations in connection with employee separations is as follows (in thousands):

Balance at June 3, 2014	$	1,055
Employee severance and unused vacation accruals		934
Cash payments		(1,651	)
Balance at December 2, 2014	$	338

See Note L to the Condensed Consolidated Financial Statements for discussion of the impact of executive separations to our share-based employee compensation costs.

NOTE K – INCOME TAXES

In July 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (“ASU 2013-11”).  The guidance requires an entity to present its deferred tax asset for a net operating loss carryforward, similar tax loss, or a tax credit carryforward net of unrecognized tax benefits when settlement in this manner is available under the tax law, which would be based on facts and circumstances as of the balance sheet reporting date and would not consider future events.  Gross presentation of an unrecognized tax benefit will still be required in the notes to the financial statements.  We adopted ASU 2013-11 on a prospective basis during the first quarter of fiscal year 2015.  The adoption of this standard in the first quarter of fiscal year 2015 resulted in a reclassification of $5.0 million of our liability for unrecognized tax benefits against our deferred tax assets.

Under Accounting Standards Codification 740 (“ASC 740”), companies are required to apply their estimated annual tax rate on a year-to-date basis in each interim period.  Under ASC 740, companies should not apply the estimated annual tax rate to interim financial results if the estimated annual tax rate is not

15

reliably predictable.  In this situation, the interim tax rate should be based on the actual year-to-date results.  Due to changes in our projections, which have fluctuated as we work through our brand repositioning, a reliable projection of our annual effective rate has been difficult to determine.  As such, we recorded a tax provision for the 26 weeks ended December 2, 2014 based on the actual year-to-date results, in accordance with ASC 740.

We regularly evaluate the need for a valuation allowance for deferred tax assets by assessing whether it is more likely than not that we will realize the deferred tax assets in the future.  A valuation allowance assessment is performed each reporting period, with any additions or adjustments reflected in earnings in the period of assessment.  In assessing the need for a valuation allowance, we consider both positive and negative evidence related to the likelihood of realization of the deferred tax assets for each jurisdiction.

Prior to the fourth quarter of fiscal year 2013, we concluded that objective and subjective positive evidence outweighed negative evidence, and it was more likely than not that we would realize all of our federal and most of our state deferred tax assets, except for loss carryforwards in certain states that have had cumulative losses and/or relatively short carryforward periods and annual limits of loss carryforward that is available for use to offset future taxable income.   During the fourth quarter of fiscal year 2013, we recorded a valuation allowance following the conclusion that the negative evidence outweighed the positive evidence. 

We recorded a tax benefit from continuing operations of $0.6 million and $3.2 million for the 13 and 26 weeks ended December 2, 2014, respectively, compared to a tax benefit from continuing operations of $1.9 million and $7.1 million for the 13 and 26 weeks ended December 3, 2013, respectively.  Included in our $3.2 million tax benefit from continuing operations for the 26 weeks ended December 2, 2014 was a benefit of $3.2 million recorded during the first quarter of fiscal year 2015 representing an immaterial prior period correction to our deferred tax asset valuation allowance.

Our valuation allowance for deferred tax assets totaled $57.6 million and $54.6 million as of December 2, 2014 and June 3, 2014, respectively.

We had a gross liability for unrecognized tax benefits, exclusive of accrued interest and penalties, of $4.4 million and $7.0 million as of December 2, 2014 and June 3, 2014, respectively.  As of December 2, 2014 and June 3, 2014, the total amount of unrecognized tax benefits that, if recognized, would impact our effective tax rate was $2.5 million and $2.6 million, respectively.  The liability for unrecognized tax benefits as of December 2, 2014 includes $0.3 million related to tax positions for which it is reasonably possible that the total amounts could change within the next twelve months based on the outcome of examinations and negotiations with tax authorities.

Interest and penalties related to unrecognized tax benefits are recognized as components of income tax expense.  As of December 2, 2014 and June 3, 2014, we had accrued $0.4 million and $0.5 million, respectively, for the payment of interest and penalties.  During the first 26 weeks of fiscal year 2015, accrued interest and penalties decreased by $0.1 million.

At December 2, 2014, we are no longer subject to U.S. federal income tax examinations by tax authorities for fiscal years prior to 2011, and with few exceptions, state and local examinations by tax authorities prior to fiscal year 2011.

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

16

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

17

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.

NOTE M – SEGMENT REPORTING

Our President and Chief Executive Officer, who is our chief operating decision maker, with the assistance of our senior management, reviews discrete financial information for both the Ruby Tuesday and Lime Fresh restaurant concepts to assess performance and allocate resources.  We consider the Ruby Tuesday and Lime Fresh concepts to be our reportable segments as we do not believe they have similar economic and other characteristics to be aggregated into a single reportable segment.  Financial results by reportable segment for the 13 and 26 weeks ended December 2, 2014 and December 3, 2013 are as follows (in thousands):

	Thirteen weeks ended						Twenty-six weeks ended
	December 2, 2014			December 3, 2013			December 2, 2014			December 3, 2013
Revenues:
Ruby Tuesday concept	$	257,814		$	270,741		$	533,857		$	554,763
Lime Fresh concept		4,845			5,468			9,984			11,120
Total revenues	$	262,659		$	276,209		$	543,841		$	565,883
Segment profit/(loss):
Ruby Tuesday concept	$	20,504		$	870		$	50,845		$	10,721
Lime Fresh concept		(1,304	)		(1,783	)		(1,480	)		(4,237	)
Total segment profit/(loss)	$	19,200		$	(913	)	$	49,365		$	6,484
Depreciation and amortization:
Ruby Tuesday concept	$	12,153		$	13,456		$	24,416		$	27,248
Lime Fresh concept		437			545			860			1,044
Support center and other		530			597			1,082			1,180
Total depreciation and amortization	$	13,120		$	14,598		$	26,358		$	29,472
Capital expenditures:
Ruby Tuesday concept							$	12,963		$	14,114
Lime Fresh concept								87			2,699
Support center and other								771			884
Total capital expenditures							$	13,821		$	17,697

Total assets by reportable segment as of December 2, 2014 and June 3, 2014 are as follows (in thousands):

	December 2, 2014		June 3, 2014
Total assets:
Ruby Tuesday concept	$	812,660	$	824,293
Lime Fresh concept		13,224		15,203
Support center and other		108,831		116,931
Total assets	$	934,715	$	956,427

18

The following is a reconciliation of segment profit/(loss) to loss from continuing operations before taxes for the 13 and 26 weeks ended December 2, 2014 and December 3, 2013 (in thousands):

	Thirteen weeks ended						Twenty-six weeks ended
	December 2, 2014			December 3, 2013			December 2, 2014			December 3, 2013
Segment profit/(loss)	$	19,200		$	(913	)	$	49,365		$	6,484
Less:
Depreciation and amortization		(13,120	)		(14,598	)		(26,358	)		(29,472	)
Unallocated general and
administrative expenses		(9,823	)		(13,760	)		(20,785	)		(25,657	)
Preopening expenses		(162	)		(41	)		(203	)		(395	)
Interest expense, net		(5,915	)		(6,620	)		(11,337	)		(13,373	)
Other expense, net		(48	)		(715	)		(619	)		(1,286	)
Loss from continuing operations
before income taxes	$	(9,868	)	$	(36,647	)	$	(9,937	)	$	(63,699	)

NOTE N – COMMITMENTS AND CONTINGENCIES

Litigation

We are presently, and from time to time, subject to pending claims and lawsuits arising in the ordinary course of business.  We provide reserves for such claims when payment is probable and estimable in accordance with GAAP.  At this time, in the opinion of management, the ultimate resolution of pending legal proceedings, including the matter referred to below, will not have a material adverse effect on our operations, financial position, or cash flows.

On April 17, 2012, a wage and hour case styled Guttentag, et al vs. Ruby Tuesday, Inc. was filed in the United States District Court, Southern District of New York.  The named plaintiffs, and five additional former employees who have joined the suit as opt-in plaintiffs, alleged that the Company violated the Fair Labor Standards Act and state wage and hour laws in New York and Florida.  Plaintiffs filed their motion for conditional certification on March 8, 2013, which sought a nationwide putative class of all current and former servers, bartenders, and food runners who worked for the Company for the three-year period prior to the filing of the lawsuit.  On June 11, 2013, the court entered an order granting conditional certification of the nationwide class requested by plaintiffs, but for the time frame of June 11, 2010 to the present.  Notice of the lawsuit and the right to opt-in was mailed to the putative class members in November 2013, and approximately 5%, or about 4,170 of the putative class members, filed consents to opt-in.  The parties engaged in mediation and reached a preliminary settlement agreement that, upon court approval, would resolve the lawsuit and result in its dismissal with prejudice.  The total settlement sum is $3.0 million, and would cover the claims of all named and opt-in plaintiffs, including plaintiffs’ claims for costs and attorneys’ fees.

On October 2, 2014, the court granted the motion to approve the settlement without modification.  Now that the thirty-day appeals period has run without the filing of any appeals, the settlement agreement has become effective, final, and binding.  The Company funded $1.3 million of the total settlement sum on November 24, 2014, and subsequently funded the balance due on December 23, 2014, once taxes required to be withheld from the wage portion of the settlement were calculated and deducted.  Accordingly, included within Accrued liabilities – Rent and other in our December 2, 2014 Condensed Consolidated Balance Sheet is a $1.7 million accrual in connection with this case.  Per the court’s approval order, the case has now been dismissed with prejudice, subject to the court retaining jurisdiction to enforce the terms of the settlement agreement.

19

NOTE O – FAIR VALUE MEASUREMENTS

The following table presents the fair value of financial assets and liabilities measured on a recurring basis and the level within the fair value hierarchy in which the measurements fall (in thousands):

	Level	December 2,  2014			June 3, 2014
Deferred compensation plan: other investments – Assets	1	$	8,732		$	8,930
Deferred compensation plan: other investments – Liabilities	1		(8,732	)		(8,930	)
Deferred compensation plan: RTI common stock – Equity	1		591			622
Deferred compensation plan: RTI common stock – Equity	1		(591	)		(622	)
Total		$	–		$	–

There were no transfers among levels within the fair value hierarchy during the 26 weeks ended December 2, 2014.

The Ruby Tuesday, Inc. 2005 Deferred Compensation Plan (the “Deferred Compensation Plan”) and the Ruby Tuesday, Inc. Restated Deferred Compensation Plan (the “Predecessor Plan”) are unfunded, non-qualified deferred compensation plans for eligible employees.  Assets earmarked to pay benefits under the Deferred Compensation Plan and Predecessor Plan are held by a rabbi trust.  We report the accounts of the rabbi trust in our Condensed Consolidated Financial Statements.  The investments held by these plans are reported at fair value based on third-party broker statements.  The realized and unrealized holding gains and losses related to these investments, as well as the offsetting compensation expense, is recorded in Selling, general and administrative expense in the Condensed Consolidated Financial Statements.

The following table presents the fair value of assets measured on a non-recurring basis during the 13 weeks ended December 2, 2014 and the level within the fair value hierarchy in which the measurements fall (in thousands):

	Fair Value Measurements
	Level	December 2, 2014
Long-lived assets held for sale	2	$	1,770
Long-lived assets held for use	2		67
Total		$	1,837

The following table presents the losses recognized during the 13 and 26 weeks ended December 2, 2014 and December 3, 2013 resulting from non-recurring fair value measurements.  The losses associated with continuing operations are included in Closures and impairments, net and the losses associated with discontinued operations are included in Income from discontinued operations, net of tax in our Condensed Consolidated Statements of Operations and Comprehensive Loss (in thousands):

	Thirteen weeks ended		Twenty-six weeks ended
	December 2,     2014	December 3,     2013	December 2,     2014	December 3,     2013
Included within continuing operations
Long-lived assets held for sale	$       203	$         315	$       802	$         584
Long-lived assets held for use	1,013	12,003	1,470	16,664
	$    1,216	$    12,318	$    2,272	$    17,248
Included within discontinued operations		$            –		$        153

Long-lived assets held for sale are valued using Level 2 inputs, primarily representing information obtained through broker listings and sales agreements.  Costs to market and/or sell the assets are factored into the estimates of fair value for those assets included in Assets held for sale on our Condensed Consolidated Balance Sheets.

We review our long-lived assets (primarily property, equipment, and, as appropriate, reacquired franchise rights and favorable leases) related to each restaurant to be held and used in the business, whenever events or changes in circumstances indicate that the carrying amount of the long-lived asset may not be recoverable.

20

Long-lived assets held for use presented in the table above include restaurants or groups of restaurants that we have impaired.  From time to time, this will also include closed restaurants or surplus sites that do not meet the held for sale criteria that we have offered for sale at a price less than carrying value.

The Level 2 fair values of our long-lived assets held for use are based on broker estimates of the value of the land, building, leasehold improvements, and other residual assets.

Our financial instruments at December 2, 2014 and June 3, 2014 consisted of cash and cash equivalents, accounts receivable and payable, long-term debt, and letters of credit.  The fair value of cash and cash equivalents and accounts receivable and payable approximated carrying value due to the short-term nature of these instruments.  The carrying value and fair value of our other financial instruments not measured at fair value on a recurring basis, however subject to fair value disclosures, are as follows (in thousands):

	December 2, 2014		June 3, 2014
	Carrying Value	Fair Value  (Level 2)	Carrying Value	Fair Value (Level 2)
Long-term debt	$  252,236	$  257,278	$  258,490	$  262,985

We estimated the fair value of debt using market quotes and calculations based on market rates.

NOTE P – SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL STATEMENTS

As discussed in Note H to the Condensed Consolidated Financial Statements, the Senior Notes held by Ruby Tuesday, Inc. (the “Parent”) are guaranteed on a senior unsecured basis by our existing and future domestic restricted subsidiaries, subject to certain exceptions (the “Guarantors”).  Each of the Guarantors is wholly-owned by Ruby Tuesday, Inc.  None of the few remaining subsidiaries of Ruby Tuesday, Inc., which were primarily created to hold liquor license assets, guarantee the Senior Notes (the “Non-Guarantors”).  Our Non-Guarantor subsidiaries are immaterial and are aggregated within the Parent information disclosed below.

The following condensed consolidating financial information, which has been prepared in accordance with the requirements for presentation of Rule 3-10(f) of Regulation S-X promulgated by the Securities and Exchange Commission, presents the condensed consolidating financial information separately for the Parent, the Guarantors, and elimination entries necessary to consolidate the Parent and Guarantors.  Investments in wholly-owned subsidiaries are accounted for using the equity method for purposes of the consolidated presentation.  The principal elimination entries eliminate investments in subsidiaries and intercompany balances and transactions.

21

Condensed Consolidating Balance Sheet

As of December 2, 2014

(In thousands)

	Parent			Guarantors			Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	47,866		$	304		$	–		$	48,170
Accounts receivable		2,088			3,543			–			5,631
Inventories		18,762			7,958			–			26,720
Income tax receivable		143,164			–			(139,990	)		3,174
Other current assets		16,694			3,040			–			19,734
Total current assets		228,574			14,845			(139,990	)		103,429
Property and equipment, net		570,506			201,320			–			771,826
Investment in subsidiaries		134,430			–			(134,430	)		–
Due from/(to) subsidiaries		79,676			220,055			(299,731	)		–
Other assets		47,471			11,989			–			59,460
Total assets	$	1,060,657		$	448,209		$	(574,151	)	$	934,715
Liabilities & Shareholders’ Equity
Current liabilities:
Accounts payable	$	21,339		$	5,626		$	–		$	26,965
Accrued and other current liabilities		43,125			34,346			–			77,471
Current maturities of long-term debt,
including capital leases		(354	)		4,860			–			4,506
Deferred income taxes		3,062			(3,004	)		–			58
Income tax payable		–			139,990			(139,990	)		–
Total current liabilities		67,172			181,818			(139,990	)		109,000
Long-term debt and capital leases,
less current maturities		213,204			34,711			–			247,915
Deferred income taxes		(1,867	)		4,091			–			2,224
Due to/(from) subsidiaries		220,055			79,676			(299,731	)		–
Other deferred liabilities		102,762			13,483			–			116,245
Total liabilities		601,326			313,779			(439,721	)		475,384
Shareholders’ equity:
Common stock		621			–			–			621
Capital in excess of par value		80,165			–			–			80,165
Retained earnings		388,518			134,430			(134,430	)		388,518
Accumulated other comprehensive loss		(9,973	)		–			–			(9,973	)
Total shareholders’ equity		459,331			134,430			(134,430	)		459,331
Total liabilities & shareholders’ equity	$	1,060,657		$	448,209		$	(574,151	)	$	934,715

22

Condensed Consolidating Balance Sheet

As of June 3, 2014

(In thousands)

	Parent			Guarantors		Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	51,012		$	314	$	–		$	51,326
Accounts receivable		1,725			3,136		–			4,861
Inventories		15,114			6,060		–			21,174
Income tax receivable		138,524			–		(136,391	)		2,133
Deferred income taxes		(548	)		3,945		–			3,397
Other current assets		14,610			2,289		–			16,899
Total current assets		220,437			15,744		(136,391	)		99,790
Property and equipment, net		587,783			207,063		–			794,846
Investment in subsidiaries		158,266			–		(158,266	)		–
Due from/(to) subsidiaries		78,612			243,665		(322,277	)		–
Other assets		48,780			13,011		–			61,791
Total assets	$	1,093,878		$	479,483	$	(616,934	)	$	956,427
Liabilities & Shareholders’ Equity
Current liabilities:
Accounts payable	$	20,545		$	5,656	$	–		$	26,201
Accrued and other current liabilities		46,450			36,356		–			82,806
Current maturities of long-term debt,
including capital leases		(341	)		5,157					4,816
Income tax payable		–			136,391		(136,391	)		–
Total current liabilities		66,654			183,560		(136,391	)		113,823
Long-term debt and capital leases,
less current maturities		213,039			40,836		–			253,875
Deferred income taxes		(445	)		3,945		–			3,500
Due to/(from) subsidiaries		243,665			78,612		(322,277	)		–
Other deferred liabilities		109,756			14,264		–			124,020
Total liabilities		632,669			321,217		(458,668	)		495,218
Shareholders’ equity:
Common stock		614			–		–			614
Capital in excess of par value		76,269			–		–			76,269
Retained earnings		395,226			158,266		(158,266	)		395,226
Accumulated other comprehensive loss		(10,900	)		–		–			(10,900	)
Total shareholders’ equity		461,209			158,266		(158,266	)		461,209
Total liabilities & shareholders’ equity	$	1,093,878		$	479,483	$	(616,934	)	$	956,427

23

Condensed Consolidating Statement of Operations and

Comprehensive Loss

For the Thirteen Weeks Ended December 2, 2014

(In thousands)

	Parent			Guarantors			Eliminations				Consolidated
Revenue:
Restaurant sales and operating revenue	$	188,572		$	72,634		$	–		$	261,206
Franchise revenue		38			1,415			–			1,453
		188,610			74,049			–			262,659
Operating costs and expenses:
Cost of goods sold		51,718			19,928			–			71,646
Payroll and related costs		66,348			27,616			–			93,964
Other restaurant operating costs		43,496			16,601			–			60,097
Depreciation		9,344			3,194			–			12,538
Selling, general, and administrative		16,548			10,744			–			27,292
Intercompany selling, general, and
administrative allocations		10,473			(10,473	)		–			–
Closures and impairments		1,073			2			–			1,075
Equity in earnings of subsidiaries		(4,326	)		–			4,326			–
Interest expense, net		4,736			1,179			–			5,915
Intercompany interest expense/(income)		2,998			(2,998	)		–			–
		202,408			65,793			4,326			272,527
(Loss)/income before income taxes		(13,798	)		8,256			(4,326	)		(9,868	)
(Benefit)/provision for income taxes		(4,525	)		3,930			–			(595	)
Net loss	$	(9,273	)	$	4,326		$	(4,326	)	$	(9,273	)
Other comprehensive loss:
Pension liability reclassification, net of tax		464			–			–			464
Total comprehensive loss	$	(8,809	)	$	4,326		$	(4,326	)	$	(8,809	)

24

Condensed Consolidating Statement of Operations and

Comprehensive Loss

For the Twenty-Six Weeks Ended December 2, 2014

(In thousands)

	Parent			Guarantor			Eliminations			Consolidated
Revenue:
Restaurant sales and operating revenue	$	391,123		$	149,540		$	–		$	540,663
Franchise revenue		184			2,994			–			3,178
		391,307			152,534			–			543,841
Operating costs and expenses:
Cost of goods sold		106,248			40,545			–			146,793
Payroll and related costs		134,390			55,416			–			189,806
Other restaurant operating costs		86,908			32,988			–			119,896
Depreciation		18,731			6,465			–			25,196
Selling, general, and administrative		36,769			21,424			–			58,193
Intercompany selling, general, and
administrative allocations		21,615			(21,615	)		–			–
Closures and impairments		2,304			253			–			2,557
Equity in earnings of subsidiaries		(12,107	)		–			12,107			–
Interest expense, net		9,247			2,090			–			11,337
Intercompany interest expense/(income)		5,890			(5,890	)		–			–
		409,995			131,676			12,107			553,778
(Loss)/income before income taxes		(18,688	)		20,858			(12,107	)		(9,937	)
(Benefit)/provision for income taxes		(11,980	)		8,751			–			(3,229	)
Net loss	$	(6,708	)	$	12,107		$	(12,107	)	$	(6,708	)
Other comprehensive loss:
Pension liability reclassification, net of tax		927			–			–			927
Total comprehensive loss	$	(5,781	)		$ 12,107		$	(12,107	)	$ (5,781		)

25

Condensed Consolidating Statement of Operations and

Comprehensive (Loss)/Income

For the Thirteen Weeks Ended December 3, 2013

(In thousands)

	Parent			Guarantors			Eliminations			Consolidated
Revenue:
Restaurant sales and operating revenue	$	198,850		$	75,869		$	–		$	274,719
Franchise revenue		98			1,392			–			1,490
		198,948			77,261			–			276,209
Operating costs and expenses:
Cost of goods sold		56,320			21,349			–			77,669
Payroll and related costs		69,365			28,152			–			97,517
Other restaurant operating costs		46,493			18,796			–			65,289
Depreciation		10,208			3,707			–			13,915
Selling, general, and administrative		25,724			11,307			–			37,031
Intercompany selling, general, and
administrative allocations		14,008			(14,008	)		–			–
Closures and impairments		8,058			6,085			–			14,143
Equity in losses of subsidiaries		104			–			(104	)		–
Interest expense, net		5,171			1,449			–			6,620
Intercompany interest expense/(income)		3,229			(3,229	)		–			–
Loss on extinguishment of debt		672			–			–			672
		239,352			73,608			(104	)		312,856
(Loss)/income from continuing operations
before income taxes		(40,404	)		3,653			104			(36,647	)
(Benefit)/provision for income taxes from
continuing operations		(5,667	)		3,757			–			(1,910	)
(Loss)/income from continuing operations		(34,737	)		(104	)		104			(34,737	)
Income from discontinued operations, net of tax		354			–			–			354
Net (loss)/income	$	(34,383	)	$	(104	)	$	104		$	(34,383	)
Other comprehensive income:
Pension liability reclassification, net of tax		477			–			–			477
Total comprehensive (loss)/income	$	(33,906	)	$	(104	)	$	104		$	(33,906	)

26

Condensed Consolidating Statement of Operations and

Comprehensive (Loss)/Income

For the Twenty-Six Weeks Ended December 3, 2013

(In thousands)

	Parent			Guarantors			Eliminations			Consolidated
Revenue:
Restaurant sales and operating revenue	$	408,932		$	153,879		$	–		$	562,811
Franchise revenue		119			2,953			–			3,072
		409,051			156,832			–			565,883
Operating costs and expenses:
Cost of goods sold		114,847			42,760			–			157,607
Payroll and related costs		142,891			57,359			–			200,250
Other restaurant operating costs		94,895			37,928			–			132,823
Depreciation		20,572			7,552			–			28,124
Selling, general, and administrative		51,718			22,328			–			74,046
Intercompany selling, general, and
administrative allocations		28,771			(28,771	)		–			–
Closures and impairments		13,223			8,953			–			22,176
Equity in earnings of subsidiaries		(4,421	)		–			4,421			–
Interest expense, net		10,231			3,142			–			13,373
Intercompany interest expense/(income)		6,414			(6,414	)		–			–
Loss on extinguishment of debt		1,183			–			–			1,183
		480,324			144,837			4,421			629,582
(Loss)/income from continuing operations
before income taxes		(71,273	)		11,995			(4,421	)		(63,699	)
(Benefit)/provision for income taxes from
continuing operations		(14,637	)		7,574			–			(7,063	)
(Loss)/income from continuing operations		(56,636	)		4,421			(4,421	)		(56,636	)
Income from discontinued operations, net of tax		11			–			–			11
Net (loss)/income	$	(56,625	)	$	4,421		$	(4,421	)	$	(56,625	)
Other comprehensive income:
Pension liability reclassification, net of tax		955			–			–			955
Total comprehensive (loss)/income	$	(55,670	)	$	4,421		$	(4,421	)	$	(55,670	)

27

Condensed Consolidating Statement of Cash Flows

For the Twenty-Six Weeks Ended December 2, 2014

(In thousands)

	Parent			Guarantors			Eliminations				Consolidated
Net cash provided by operating activities	$	25,640		$	43,870		$	(59,553	)	$	9,957
Investing activities:
Purchases of property and equipment		(11,002	)		(2,819	)		–			(13,821	)
Proceeds from disposal of assets		4,607			997			–			5,604
Other, net		1,146			135			–			1,281
Net cash used by investing activities		(5,249	)		(1,687	)		–			(6,936	)
Financing activities:
Principal payments on long-term debt		(16	)		(6,250	)		–			(6,266	)
Stock repurchases		(55	)		–			–			(55	)
Payments for debt issuance costs		(75	)		–			–			(75	)
Proceeds from exercise of stock options		197			–			–			197
Excess tax benefits from share-based
compensation		22			–			–			22
Intercompany transactions		(23,610	)		(35,943	)		59,553			–
Net cash used by financing activities		(23,537	)		(42,193	)		59,553			(6,177	)
Decrease in cash and cash equivalents		(3,146	)		(10	)		–			(3,156	)
Cash and cash equivalents:
Beginning of year		51,012			314			–			51,326
End of quarter	$	47,866		$	304		$	–		$	48,170

28

Condensed Consolidating Statement of Cash Flows

For the Twenty-Six Weeks Ended December 3, 2013

(In thousands)

	Parent			Guarantors			Eliminations			Consolidated
Net cash (used)/provided by operating activities	$	(22,630	)	$	36,648		$	(13,590	)	$	428
Investing activities:
Purchases of property and equipment		(12,902	)		(4,795	)		–			(17,697	)
Proceeds from sale-leaseback transactions, net		5,637			–			–			5,637
Proceeds from disposal of assets		7,434			1,023			–			8,457
Other, net		187			–			–			187
Net cash provided/(used) by investing activities		356			(3,772	)		–			(3,416	)
Financing activities:
Principal payments on long-term debt		(12,968	)		(12,838	)		–			(25,806	)
Stock repurchases		(540	)		–			–			(540	)
Payments for debt issuance costs		(1,718	)		–			–			(1,718	)
Proceeds from exercise of stock options		1,480			–			–			1,480
Excess tax benefits from share-based
compensation		283			–			–			283
Intercompany transactions		6,415			(20,005	)		13,590			–
Net cash used by financing activities		(7,048	)		(32,843	)		13,590			(26,301	)
(Decrease)/increase in cash and cash equivalents		(29,322	)		33			–			(29,289	)
Cash and cash equivalents:
Beginning of year		52,635			272			–			52,907
End of quarter	$	23,313		$	305		$	–		$	23,618

29

NOTE Q – RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

Accounting Pronouncements Adopted During Fiscal Year 2015

As discussed further in Note K to the Condensed Consolidated Financial Statements, we adopted ASU 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists during the first quarter of fiscal year 2015.

Accounting Pronouncements Not Yet Adopted

In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements – Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASU 2014-15”).  The guidance requires an entity to evaluate whether there are conditions or events, in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued (or within one year after the financial statements are available to be issued when applicable) and to provide related footnote disclosures in certain circumstances.  The guidance is effective for the annual period ending after December 15, 2016, and for annual and interim periods thereafter (our fiscal year 2017).  Early application is permitted.  We do not believe the adoption of this guidance will have a significant impact on our Condensed Consolidated Financial Statements.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”).  ASU 2014-09 is a jointly converged standard between the FASB and the International Accounting Standards Board, and will replace almost all existing revenue recognition guidance, including industry specific guidance, upon its effective date. The standard’s core principle is for companies to recognize revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration to which the company expects to be entitled in exchange for those goods and services. ASU 2014-09 also enhances disclosures about revenue, provides guidance for transactions that were not addressed comprehensively in previous guidance, and improves guidance for multiple-element arrangements.  The standard permits the use of either the retrospective or cumulative effect transition method.  The guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016 (the first quarter of our fiscal year 2018).  We have not yet selected a transition method and are currently evaluating the impact of this guidance on our Condensed Consolidated Financial Statements.

30

ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

The discussion and analysis below for the Company should be read in conjunction with the unaudited Condensed Consolidated Financial Statements and the notes to such financial statements included elsewhere in this Quarterly Report on Form 10-Q.  The discussion below contains forward-looking statements which should be read in conjunction with the “Special Note Regarding Forward-Looking Information” included elsewhere in this Quarterly Report on Form 10-Q.

General:

Ruby Tuesday, Inc., including its wholly-owned subsidiaries (“RTI,” the “Company,” “we” and/or “our”), owns and operates Ruby Tuesday® casual dining and Lime Fresh Mexican Grill® (“Lime Fresh”) fast casual restaurants.  As of December 2, 2014, we owned and operated 663, and franchised 81, Ruby Tuesday restaurants.  Ruby Tuesday restaurants can be found in 44 states, 13 foreign countries, and Guam.

As of December 2, 2014, there were 20 Company-owned and operated Lime Fresh restaurants, as well as eight domestic Lime Fresh restaurants operated by franchisees.

Overview and Strategies

The bar and grill segment of the casual dining industry in which we primarily operate is intensely competitive with respect to prices, services, convenience, locations, employees, advertising and promotion, and the types and quality of food.  We compete with other food service operations, including locally-owned restaurants, and other national and regional restaurant chains that offer similar types of services and products as we do.  We continue to believe there are opportunities to grow our business, strengthen our competitive position, enhance our profitability, and create value through the execution of the following strategies:

Enhance Sales and Margins Through Repositioning of Our Core Brand

We are in the process of executing a strategic brand transformation of the Ruby Tuesday concept which is designed to make our brand more energetic, affordable, and broadly appealing.  We believe the execution of this strategy provides opportunities for increased customer counts, same-restaurant sales growth, and increased shareholder value.  Our brand transformation is supported by four key pillars: core menu transformation, service and atmosphere enhancements, and communication.  As part of our transformation strategy, we have taken what we believe to be meaningful steps to improve our food, customer experience, organizational capabilities, and business model.  We have worked to transform our menu and, through successive menu launches throughout the last 18 months, we introduced new menu platforms and offerings that provide a compelling value throughout the menu at a wide-range of price points.  Enhancing our service and atmosphere are also critical components of our brand transformation strategy.  As we introduced new menu and culinary platforms, we also simplified recipes and operational processes which we believe resulted in better and more consistent food and service execution.  We recently introduced more casual and colorful new team uniforms and have a new menu design, both of which better reflect our brand personality.  We believe these changes have combined to deliver improved customer service and create a more energetic dining atmosphere for our customers.  The fourth pillar of our brand transformation strategy is our communication and marketing programs.  Historically our marketing strategy has primarily focused on print promotions, digital media and local marketing programs, with a minimal amount spent on television.  Over the past year, we have deployed what we believe to be a more balanced marketing program comprised of a mixture of national cable television advertising supported with direct mail and other print and electronic promotions.  Our television advertising is designed to reshape consumer perceptions of the Ruby Tuesday brand, by showcasing our brand personality in a fresh and energetic way, featuring compelling new food products, highlighting the freshness and variety of our Garden Bar, and effectively communicating value and affordability.  The four key areas of menu, service, atmosphere, and communication will continue to be foundational drivers of our brand transformation and key to building a stronger business model.

Enhancing Our Business Model

Over the past year, we made significant progress towards lowering our overall cost structure with identified reductions in cost of goods sold and selling, general, and administrative expenses.  We are in the process of implementing enhanced business processes and capabilities, such as new platforms for guest count

31

forecasting, labor management, and food waste management that should benefit our business model and result in a better guest experience and improved profitability.  We believe there is opportunity to further improve our business model with a continued focus on improving our restaurant-level returns and through a continued focus on lowering our overall cost structure through the implementation of business technology platforms.

Strengthen our Balance Sheet to Facilitate Growth and Value Creation

During the second quarter of fiscal year 2014, we entered into a four-year $50.0 million revolving credit agreement (the “Senior Credit Facility”).  Our Senior Credit Facility, which is secured by substantially all of the shares of capital stock of the Company’s subsidiaries, real property, improvements and fixtures of 49 Ruby Tuesday restaurants, and substantially all of the personal property of the Company and each of its present and future subsidiaries, was obtained to provide access to capital for general corporate purposes and provides us with more covenant flexibility than our previous revolving credit facility.  The Senior Credit Facility has a $35.0 million accordion feature which provides us with additional liquidity if needed.  Aside from the $12.5 million allocated to letters of credit issued primarily in conjunction with our insurance programs, the $50.0 million revolving Senior Credit Facility has remained undrawn.

Our objective over the next several years is to grow our net cash provided by operating activities which will provide us with funds that can be used to invest in our restaurants as we deem necessary and to continue to reduce outstanding debt levels in order to lower our leverage.  Our success in the key strategic initiatives outlined above should enable us to improve both our return on assets and return on equity, and to create additional shareholder value.

Our Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is based upon our Condensed Consolidated Financial Statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America.  The preparation of these financial statements requires us to make subjective or complex judgments that may affect the reported financial condition and results of operations.  We base our estimates on historical experience and other assumptions that we believe to be reasonable in the circumstances, the results of which form the basis for making judgments about carrying values of assets and liabilities that are not readily apparent from other sources.  Actual results may differ from these estimates under different assumptions or conditions.  We continually evaluate the information used to make these estimates as our business and the economic environment changes.

Results of Operations:

The following is an overview of our results of operations for the 13- and 26-week periods ended December 2, 2014:

Net loss was $9.3 million for the 13 weeks ended December 2, 2014 compared to a net loss of $34.4 million for the same quarter of the previous year.  Diluted loss per share for the fiscal quarter ended December 2, 2014 was $0.15 compared to a diluted loss per share of $0.57 for the corresponding period of the prior fiscal year as a result of the decrease in net loss as discussed below.

During the 13 weeks ended December 2, 2014:

·   Same-restaurant sales* at Company-owned Ruby Tuesday restaurants decreased 1.0%, while same-restaurant sales at domestic franchise Ruby Tuesday restaurants increased 6.5%;

·   One Company-owned Ruby Tuesday restaurant was opened and four were closed;

·   One franchised Ruby Tuesday restaurant was opened and three were closed; and

·   One franchised Lime Fresh restaurant was opened. 

Net loss was $6.7 million for the 26 weeks ended December 2, 2014 compared to a net loss of $56.6 million for the same period of the previous fiscal year.  Diluted loss per share for the 26 weeks ended December 2, 2014 was $0.11 compared to a diluted loss per share of $0.94 for the corresponding period of the prior fiscal year as a result of the decrease in net loss as discussed below.

32

During the 26 weeks ended December 2, 2014:

·   Same-restaurant sales* at Company-owned Ruby Tuesday restaurants increased 0.1%, while same-restaurant sales at domestic franchise Ruby Tuesday restaurants increased 6.9%;

·   One Company-owned Ruby Tuesday restaurants was opened and six were closed;

·   Five franchised Ruby Tuesday restaurants were opened and three were closed;

·   Two franchised Lime Fresh restaurants were opened;

·   Michael O. Moore stepped down as our Chief Financial Officer on June 26, 2014 and Jill M. Golder was appointed Executive Vice President, Chief Financial Officer, and Treasurer on the same date.  Mr. Moore left the Company on August 4, 2014; and

·   Jeffrey C. Wood, our former Senior Vice President and Chief Development Officer, left the Company on July 24, 2014.

* We define same-restaurant sales as a year-over-year comparison of sales volumes for restaurants that, in the current year have been open at least 18 months, in order to remove the impact of new openings in comparing the operations of existing restaurants.

The following table sets forth selected restaurant operating data as a percentage of total revenue, except where otherwise noted, for the periods indicated.  All information is derived from our Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.

	Thirteen weeks ended				Twenty-six weeks ended
	December 2,		December 3,		December 2,		December 3,
	2014		2013		2014		2013
Revenue:
Restaurant sales and operating revenue	99	.4%	99	.5%	99	.4%	99	.5%
Franchise revenue	0	.6	0	.5	0	.6	0	.5
Total revenue	100	.0	100	.0	100	.0	100	.0
Operating costs and expenses:
Cost of goods sold (1)	27	.4	28	.3	27	.2	28	.0
Payroll and related costs (1)	36	.0	35	.5	35	.1	35	.6
Other restaurant operating costs (1)	23	.0	23	.8	22	.2	23	.6
Depreciation (1)	4	.8	5	.1	4	.7	5	.0
Selling, general and administrative, net	10	.4	13	.4	10	.7	13	.1
Closures and impairments, net	0	.4	5	.1	0	.5	3	.9
Interest expense, net	2	.3	2	.4	2	.1	2	.4
Loss on extinguishment of debt		–	0	.2		–	0	.2
Loss from continuing operations before
income taxes	(3	.8)	(13	.3)	(1	.8)	(11	.3)
Benefit for income taxes from continuing
operations	(0	.2)	(0	.7)	(0	.6)	(1	.2)
Loss from continuing operations	(3	.5)	(12	.6)	(1	.2)	(10	.0)
Income from discontinued operations, net of tax		–	0	.1		–	0	.0
Net loss	(3	.5)%	(12	.4)%	(1	.2)%	(10	.0)%

(1)     As a percentage of restaurant sales and operating revenue.

33

The following table shows Company-owned Ruby Tuesday and Lime Fresh concept restaurant activity for the 13- and 26-week periods ended December 2, 2014 and December 3, 2013.

	Ruby  Tuesday		Lime Fresh		Total
13 weeks ended December 2, 2014
Beginning number	666		20		686
Opened	1		–		1
Closed	(4)	)	–		(4)	)
Ending number	663		20		683
26 weeks ended December 2, 2014
Beginning number	668		20		688
Opened	1		–		1
Closed	(6)	)	–		(6)	)
Ending number	663		20		683
13 weeks ended December 3, 2013
Beginning number	703		21		724
Opened	–		1		1
Closed	–		(1)	)	(1)	)
Ending number	703		21		724
26 weeks ended December 3, 2013
Beginning number	706		18		724
Opened	–		4		4
Closed	(3)	)	(1)	)	(4)	)
Ending number	703		21		724

The following table shows franchised Ruby Tuesday and Lime Fresh concept restaurant activity for the 13- and 26-week periods ended December 2, 2014 and December 3, 2013.

	Thirteen weeks ended		Twenty-six weeks ended
	December 2,  2014	December 3, 2013	December 2, 2014	December 3, 2013
Ruby Tuesday
Beginning number	83	75	79	77
Opened	1	2	5	2
Closed	(3)	(1)	(3)	(3)
Ending number	81	76	81	76

Lime Fresh
Beginning number	7	8	6	6
Opened	1	–	2	2
Closed	–	–	–	–
Ending number	8	8	8	8

34

Revenue

Total revenue by reportable segment for the 13 and 26 weeks ended December 2, 2014 and December 3, 2013 are as follows (in thousands):

	Thirteen weeks ended				Twenty-six weeks ended
	December 2, 2014		December 3, 2013		December 2, 2014		December 3, 2013
Revenues:
Ruby Tuesday concept	$	257,814	$	270,741	$	533,857	$	554,763
Lime Fresh concept		4,845		5,468		9,984		11,120
Total revenues	$	262,659	$	276,209	$	543,841	$	565,883

The Ruby Tuesday concept restaurant sales and operating revenue for the 13 weeks ended December 2, 2014 decreased 4.8% to $257.8 million compared to the same quarter of the prior fiscal year.  This decrease is primarily a result of restaurant closings since the same quarter of the prior fiscal year coupled with a 1.0% decrease in same-restaurant sales at Company-owned Ruby Tuesday restaurants.  The decrease in Ruby Tuesday concept same-restaurant sales is attributable to a 1.3% decrease in customer traffic offset by a slight increase in net check.

Franchise revenue for the 13 weeks ended December 2, 2014 decreased 2.5% to $1.5 million compared to the same quarter of the prior fiscal year.  Franchise revenue is predominately comprised of domestic and international franchise royalties, which totaled $1.4 million for both 13-week periods ended December 2, 2014 and December 3, 2013.  The decrease in franchise revenue for the 13 weeks ended December 2, 2014 was due to a $0.1 million decrease in international franchise license fees as compared to the same quarter of the prior fiscal year.

The Lime Fresh concept restaurant sales and operating revenue for the 13 weeks ended December 2, 2014 decreased 11.4% to $4.8 million compared to the same quarter of the prior fiscal year.  This decrease is due in part to restaurant closings since the same quarter of the prior fiscal year coupled with lower sales at four open Lime Fresh restaurants which have been impaired.

The Ruby Tuesday concept restaurant sales and operating revenue for the 26 weeks ended December 2, 2014 decreased 3.8% to $533.9 million compared to the same period of the prior fiscal year.  This decrease is primarily a result of restaurant closings since the same period of the prior fiscal year partially offset by a 0.1% increase in same-restaurant sales at Company-owned Ruby Tuesday restaurants.  The increase in Ruby Tuesday concept same-restaurant sales is attributable to a 0.1% increase in customer traffic.

Franchise revenue for the 26 weeks ended December 2, 2014 increased 3.5% to $3.2 million compared to the same quarter of the prior fiscal year.  Franchise revenue is predominately comprised of domestic and international franchise royalties, which totaled $3.0 million for both 26-week periods ended December 2, 2014 and December 3, 2013.  The increase in franchise revenue for the 26 weeks ended December 2, 2014 was due primarily to a $0.1 million increase in international franchise license fees as compared to the same period of the prior fiscal year.

The Lime Fresh concept restaurant sales and operating revenue for the 26 weeks ended December 2, 2014 decreased 10.2% to $10.0 million compared to the same period of the prior fiscal year.  This decrease is due in part to restaurant closings since the same period of the prior fiscal year coupled with lower sales at four open Lime Fresh restaurants which have been impaired.

35

Segment Profit/(Loss)

Our President and Chief Executive Officer, who is our chief operating decision maker, with the assistance of our senior management, reviews discrete financial information for both the Ruby Tuesday and Lime Fresh restaurant concepts to assess performance and allocate resources.  We consider the Ruby Tuesday and Lime Fresh concepts to be our reportable segments as we do not believe they have similar economic and other characteristics to be aggregated into a single reportable segment.  Segment profit/(loss) by reportable segment for the 13 and 26 weeks ended December 2, 2014 and December 3, 2013 are as follows (in thousands):

	Thirteen weeks ended						Twenty-six weeks ended
	December 2, 2014			December 3, 2013			December 2, 2014			December 3, 2013
Segment profit/(loss):
Ruby Tuesday concept	$	20,504		$	870		$	50,845		$	10,721
Lime Fresh concept		(1,304	)		(1,783	)		(1,480	)		(4,237	)
Total segment profit/(loss)	$	19,200		$	(913	)	$	49,365		$	6,484

Segment profit for the 13 weeks ended December 2, 2014 for the Ruby Tuesday concept increased $19.6 million to $20.5 million compared to the second quarter of fiscal year 2014 due primarily to decreases in cost of goods sold and other restaurant operating costs due to initiatives discussed later within this MD&A, and decreases in closures and impairments expense of $12.7 million and advertising expense of $6.8 million, which were partially offset by a 1.0% decrease in same-restaurant sales at Company-owned Ruby Tuesday restaurants discussed above.  The reduction in closures and impairments expense compared to the same quarter of the prior fiscal year is primarily attributable to a decrease of impairments in connection with open restaurants with deteriorating operational performance ($5.7 million), early restaurant closures ($4.4 million), and upcoming lease terminations ($0.9 million) as prior fiscal year same-restaurant sales were down 7.8% and we were announcing a plan to close approximately 30 Ruby Tuesday concept restaurants by the end of fiscal year 2014.  The reduction in advertising spending relates to reduced television advertising.

Segment losses for the 13 weeks ended December 2, 2014 for the Lime Fresh concept decreased $0.5 million compared to the second quarter of fiscal year 2014 to $1.3 million due primarily to decreases in closures and impairments expense of $0.4 million as the prior fiscal year Lime Fresh segment losses included a lease reserve charge related to a Lime Fresh restaurant contracted to be sold.

Segment profit for the 26 weeks ended December 2, 2014 for the Ruby Tuesday concept increased $40.1 million to $50.8 million compared to the same period of fiscal year 2014 due primarily to improvements in cost of goods sold, payroll and related costs, and other restaurant operating costs due to initiatives discussed later within this MD&A, and decreases in closures and impairments expense of $18.0 million and advertising expense of $10.9 million.  The reduction in closures and impairments expense compared to the same period of the prior fiscal year is primarily attributable to a decrease of impairments in connection with open restaurants with deteriorating operational performance ($10.3 million), early restaurant closures ($4.4 million), and upcoming lease terminations ($0.9 million) as prior fiscal year same-restaurant sales were down 9.7% and we were announcing a plan to close 30 Ruby Tuesday concept restaurants, as discussed above.  The reduction in advertising spending relates to reduced cable and television advertising.

Segment losses for the 26 weeks ended December 2, 2014 for the Lime Fresh concept decreased $2.8 million compared to the same period of fiscal year 2014 to $1.5 million due primarily to decreases in closures and impairments expense of $2.2 million as the prior fiscal year Lime Fresh segment losses included lease reserve charges related to four undeveloped sites for which a management decision was reached to forego restaurant development and a lease reserve charge on a Lime Fresh restaurant contracted to be sold.

36

The following is a reconciliation of segment profit/(loss) to loss from continuing operations before taxes for the 13 and 26 weeks ended December 2, 2014 and December 3, 2013 (in thousands):

	Thirteen weeks ended						Twenty-six weeks ended
	December 2, 2014			December 3, 2013			December 2, 2014			December 3, 2013
Segment profit/(loss)	$	19,200		$	(913	)	$	49,365		$	6,484
Less:
Depreciation and amortization		(13,120	)		(14,598	)		(26,358	)		(29,472	)
Unallocated general and
administrative expenses		(9,823	)		(13,760	)		(20,785	)		(25,657	)
Preopening expenses		(162	)		(41	)		(203	)		(395	)
Interest expense, net		(5,915	)		(6,620	)		(11,337	)		(13,373	)
Other expense, net		(48	)		(715	)		(619	)		(1,286	)
Loss from continuing operations
before income taxes	$	(9,868	)	$	(36,647	)	$	(9,937	)	$	(63,699	)

Pre-tax Loss from Continuing Operations

Pre-tax loss from continuing operations was $9.9 million for the 13 weeks ended December 2, 2014 compared to $36.6 million for the corresponding quarter of the prior fiscal year.  The decrease in pre-tax loss is due to lower closures and impairments expense ($13.1 million) and interest expense ($0.7 million), and decreases, as a percentage of restaurant sales and operating revenue or total revenue, as appropriate, of cost of goods sold, other restaurant operating costs, depreciation, and selling general, and administrative, net.  These were partially offset by a decrease in same-restaurant sales of 1.0% at Company-owned Ruby Tuesday restaurants and an increase as a percentage of restaurant sales and operating revenue, of payroll and related costs.

Pre-tax loss from continuing operations was $9.9 million for the 26 weeks ended December 2, 2014 compared to $63.7 million for the corresponding period of the prior fiscal year.  The decrease in pre-tax loss is due to lower closures and impairments expense ($19.6 million) and interest expense ($2.0 million), an increase in same-restaurant sales of 0.1% at Company-owned Ruby Tuesday restaurants, and decreases, as a percentage of restaurant sales and operating revenue or total revenue, as appropriate, of cost of goods sold, payroll and related costs, other restaurant operating costs, depreciation, and selling general, and administrative, net.

In the paragraphs that follow, we discuss in more detail the components of the decrease in pre-tax loss from continuing operations for the 13- and 26-week periods ended December 2, 2014, as compared to the comparable periods in the prior fiscal year.  Because a significant portion of the costs recorded in the cost of goods sold, payroll and related costs, other restaurant operating costs, and depreciation categories are either variable or highly correlative with the number of restaurants we operate, we evaluate our trends by comparing the costs as a percentage of restaurant sales and operating revenue, as well as the absolute dollar change, to the comparable prior fiscal year period.

Cost of Goods Sold

Cost of goods sold decreased $6.0 million (7.8%) to $71.6 million for the 13 weeks ended December 2, 2014, over the corresponding period of the prior fiscal year.  As a percentage of restaurant sales and operating revenue, cost of goods sold decreased from 28.3% to 27.4%.

Cost of goods sold decreased $10.8 million (6.9%) to $146.8 million for the 26 weeks ended December 2, 2014, over the corresponding period of the prior fiscal year.  As a percentage of restaurant sales and operating revenue, cost of goods sold decreased from 28.0% to 27.2%.

The absolute dollar decrease in cost of goods sold for the 13- and 26-week periods ended December 2, 2014 was the result of restaurant closures and cost savings on certain products as a result of renegotiated contracts with certain vendors since the same periods of fiscal year 2014.  These were partially offset by price increases on seafood, dairy, and certain other products since the same periods of the prior fiscal year.

As a percentage of restaurant sales and operating revenue, the decrease in cost of goods sold for the 13- and 26-week periods ended December 2, 2014 is primarily the result of renegotiated contracts with certain vendors since the same periods of fiscal year 2014.

37

Payroll and Related Costs

Payroll and related costs decreased $3.6 million (3.6%) to $94.0 million for the 13 weeks ended December 2, 2014, as compared to the corresponding period in the prior fiscal year.  As a percentage of restaurant sales and operating revenue, payroll and related costs increased from 35.5% to 36.0%.

Payroll and related costs decreased $10.4 million (5.2%) to $189.8 million for the 26 weeks ended December 2, 2014, as compared to the corresponding period in the prior fiscal year.  As a percentage of restaurant sales and operating revenue, payroll and related costs decreased from 35.6% to 35.1%.

The absolute dollar decrease in payroll and related costs for the 13- and 26-week periods ended December 2, 2014 was due to restaurant closures, decreases in hourly labor as a result of scheduling improvements with the rollout of a new labor forecasting system in our restaurants, and lower management labor, which were partially offset by higher health insurance costs as a result of unfavorable claims experience and higher bonus expense as more restaurants achieved the performance goals as compared to the same periods of the prior fiscal year.

As a percentage of restaurant sales and operating revenue, the increase in payroll and related costs for the 13 weeks ended December 2, 2014 was primarily the result of increased health insurance costs as discussed above.

As a percentage of restaurant sales and operating revenue, the decrease in payroll and related costs for the 26 weeks ended December 2, 2014 was primarily the result of decreased hourly and management labor due to reasons as discussed above, offset by higher health insurance costs.

Other Restaurant Operating Costs

Other restaurant operating costs decreased $5.2 million (8.0%) to $60.1 million for the 13-week period ended December 2, 2014, as compared to the corresponding period in the prior fiscal year.  As a percentage of restaurant sales and operating revenue, these costs decreased from 23.8% to 23.0%.

For the 13 weeks ended December 2, 2014, the decrease in other restaurant operating costs related to the following (in thousands):

Repairs	$    3,869
Utilities	732
Rent and leasing	703
Other decreases, net	792
Legal	(904	)
Net decrease	$    5,192

In both absolute dollars and as a percentage of restaurant sales and operating revenue for the 13-week period ended December 2, 2014, the decrease was a result of reduced building repairs, utilities, and rent and leasing due primarily to restaurant closures since the same quarter of the prior fiscal year.  These were partially offset by higher legal costs related to pending litigation.

Other restaurant operating costs decreased $12.9 million (9.7%) to $119.9 million for the 26-week period ended December 2, 2014, as compared to the corresponding period in the prior fiscal year.  As a percentage of restaurant sales and operating revenue, these costs decreased from 23.6% to 22.2%.

For the 26 weeks ended December 2, 2014, the decrease in other restaurant operating costs related to the following (in thousands):

Repairs	$    5,961
Utilities	1,807
Rent and leasing	1,720
Business interruption recoveries	1,050
Other decreases, net	2,389
Net decrease	$   12,927

38

In both absolute dollars and as a percentage of restaurant sales and operating revenue for the 26-week period ended December 2, 2014, the decrease was a result of reduced building repairs, utilities, and rent and leasing due primarily to restaurant closures since the same period of the prior fiscal year, and business interruption recoveries related to claims collected for certain of our restaurants in the Gulf Coast area.

Depreciation

Depreciation expense decreased $1.4 million (9.9%) to $12.5 million for the 13-week period ended December 2, 2014, as compared to the corresponding period in the prior fiscal year.  As a percentage of restaurant sales and operating revenue, depreciation expense decreased from 5.1% to 4.8%.

Depreciation expense decreased $2.9 million (10.4%) to $25.2 million for the 26-week period ended December 2, 2014, as compared to the corresponding period in the prior fiscal year.  As a percentage of restaurant sales and operating revenue, depreciation expense decreased from 5.0% to 4.7%.

In terms of absolute dollars and as a percentage of restaurant sales and operating revenue, the decrease for the 13- and 26-week periods ended December 2, 2014 is due primarily to assets that became fully depreciated since the same periods of the prior fiscal year coupled with restaurant closures.

Selling, General and Administrative Expenses, Net

Selling, general and administrative expenses, net decreased $9.7 million (26.3%) to $27.3 million for the 13-week period ended December 2, 2014, as compared to the corresponding period in the prior fiscal year.

Selling, general and administrative expenses, net decreased $15.9 million (21.4%) to $58.2 million for the 26-week period ended December 2, 2014, as compared to the corresponding period in the prior fiscal year.

The decrease for the 13- and 26-week periods ended December 2, 2014 is due to lower advertising costs ($6.8 million and $11.1 million, respectively), primarily as a result of decreased television advertising, and a reduction in general and administrative costs ($2.9 million and $4.8 million, respectively) due to lower management labor from reductions in staffing and lower legal fees, which were partially offset by higher accruals for support center bonus.

Closures and Impairments

Closures and impairments decreased $13.1 million to $1.1 million for the 13-week period ended December 2, 2014, as compared to the corresponding period of the prior fiscal year.  The decrease for the 13-week period ended December 2, 2014 is primarily due to lower property impairment charges ($11.1 million), decreased closed restaurant lease reserve expense ($1.4 million), and higher gains on the sale of surplus properties ($0.8 million), which were partially offset by increased other closing costs ($0.2 million).

Closures and impairments decreased $19.6 million to $2.6 million for the 26-week period ended December 2, 2014, as compared to the corresponding period of the prior fiscal year.  The decrease for the 26-week period ended December 2, 2014 is primarily due to lower property impairment charges ($15.0 million), decreased closed restaurant lease reserve expense ($3.5 million), and higher gains on the sale of surplus properties ($1.2 million), which were partially offset by increased other closing costs ($0.1 million).

The decrease for both the 13- and 26-week periods ended December 2, 2014 is primarily due to lower property impairment charges as the same periods of the prior fiscal year included, among other charges, impairments of $5.7 million and $10.3 million, respectively, in connection with open Ruby Tuesday concept restaurants with deteriorating operational performance, and $4.4 million related to early restaurant closures.  Prior fiscal year same-restaurant sales for Ruby Tuesday concept restaurants were down 7.8% and 9.7% for the 13 and 26 weeks ended December 3, 2013, respectively.  The prior fiscal year charges were also due to a plan we announced to close approximately 30 Ruby Tuesday concept restaurants by the end of fiscal year 2014.  See Note I to our Condensed Consolidated Financial Statements for further information on our closures and impairment charges recorded during the first two quarters of fiscal years 2015 and 2014.

At December 2, 2014, we had 45 restaurants that had been open for more than six full quarters with rolling 12-month negative cash flows of which 30 have been impaired to salvage value.  Of the 15 which remained, we reviewed the plans to improve cash flows at each of the restaurants and determined that no

39

impairment was necessary.  The remaining net book value of these 15 restaurants, five of which are located on owned properties, was $15.5 million at December 2, 2014.

Should cash flows at these restaurants not improve within a reasonable period of time, further impairment charges are possible.  Considerable management judgment is necessary to estimate future cash flows, including cash flows from continuing use, terminal value, closure costs, salvage value, and sublease income.  Accordingly, actual results could vary significantly from our estimates.

Interest Expense, Net

Interest expense, net decreased $0.7 million to $5.9 million for the 13 weeks ended December 2, 2014, as compared to the corresponding period in the prior fiscal year, primarily due to lower interest expense on our Senior Notes due to repurchases and the early payoff of certain mortgage loans since the second quarter of fiscal year 2014.  Interest expense, net decreased $2.0 million to $11.3 million for the 26-week period ended December 2, 2014, as compared to the corresponding period in the prior fiscal year, primarily for the same reasons mentioned above.

Benefit for Income Taxes from Continuing Operations

Under Accounting Standards Codification 740 (“ASC 740”), companies are required to apply their estimated annual tax rate on a year-to-date basis in each interim period.  Under ASC 740, companies should not apply the estimated annual tax rate to interim financial results if the estimated annual tax rate is not reliably predictable.  In this situation, the interim tax rate should be based on the actual year-to-date results.  Due to changes in our projections, which have fluctuated as we work through our brand repositioning, a reliable projection of our annual effective rate has been difficult to determine.  As such, we recorded a tax provision for the first two quarters of fiscal year 2015 based on the actual year-to-date results, in accordance with ASC 740.

We regularly evaluate the need for a valuation allowance for deferred tax assets by assessing whether it is more likely than not that we will realize the deferred tax assets in the future.  A valuation allowance assessment is performed each reporting period, with any additions or adjustments reflected in earnings in the period of assessment.  In assessing the need for a valuation allowance, we consider both positive and negative evidence related to the likelihood of realization of the deferred tax assets for each jurisdiction.

Prior to the fourth quarter of fiscal year 2013, we concluded that objective and subjective positive evidence outweighed negative evidence, and it was more likely than not that we would realize all of our federal and most of our state deferred tax assets, except for loss carryforwards in certain states that have had cumulative losses and/or relatively short carryforward periods and annual limits of loss carryforward that is available for use to offset future taxable income.   During the fourth quarter of fiscal year 2013, we recorded a valuation allowance following the conclusion that the negative evidence outweighed the positive evidence. 

We recorded a tax benefit from continuing operations of $0.6 million and $3.2 million during the 13- and 26-week periods ended December 2, 2014, respectively, compared to a tax benefit from continuing operations of $1.9 million and $7.1 million during the 13- and 26-week periods ended December 3, 2013, respectively.  Included in our $3.2 million tax benefit from continuing operations for the 26-week period ended December 2, 2014 was a benefit of $3.2 million recorded during the first quarter of fiscal year 2015 representing an immaterial prior period correction to our deferred tax asset valuation allowance.

40

Discontinued Operations

In an effort to focus primarily on the sales turnaround of our core Ruby Tuesday concept and secondly, to improve the financial performance of our Lime Fresh concept, we completed the closure of our Marlin & Ray’s, Wok Hay, and Truffles restaurants during the fourth quarter of fiscal year 2013.  We have classified the results of operations of our Company-owned Marlin & Ray’s, Wok Hay, and Truffles concepts as discontinued operations for the 13 and 26 weeks ended December 3, 2013.  The results of operations of our discontinued operations are as follows (in thousands):

	Thirteen  weeks ended		Twenty-six  weeks ended
	December 3,  2013		December 3,  2013
Restaurant sales and operating revenue	$	–	$	–
Gain/(loss) before income taxes	$	453	$	(75	)
Provision/(benefit) for income taxes		99		(86	)
Income from discontinued operations	$	354	$	11

Liquidity and Capital Resources:

Cash and cash equivalents decreased by $3.2 million and $29.3 million during the first 26 weeks of fiscal years 2015 and 2014, respectively.  The change in cash and cash equivalents is as follows (in thousands):

	Twenty-six weeks ended
	December 2,			December 3,
	2014			2013
Cash provided by operating activities	$	9,957		$	428
Cash used by investing activities		(6,936	)		(3,416	)
Cash used by financing activities		(6,177	)		(26,301	)
Decrease in cash and cash equivalents	$	(3,156	)	$	(29,289	)

Operating Activities

Our cash provided by operations is generally derived from cash receipts generated by our restaurant customers and franchisees.  Substantially all of the $540.7 million and $562.8 million of restaurant sales and operating revenue disclosed in our Condensed Consolidated Statements of Operations and Comprehensive Loss for the 26 weeks ended December 2, 2014 and December 3, 2013, respectively, was received in cash either at the point of sale or within two to four days (when our customers paid with debit or credit cards).  Our primary uses of cash for operating activities are food and beverage purchases, payroll and benefit costs, restaurant operating costs, general and administrative expenses, and marketing, a significant portion of which are incurred and paid in the same period.

Cash provided by operating activities for the first 26 weeks of fiscal year 2015 increased $9.5 million from the corresponding period in the prior fiscal year to $10.0 million.  The increase is primarily the result of higher Earnings Before Interest, Taxes, Depreciation, and Amortization (“EBITDA”) due in part to a 0.1% increase in same-restaurant sales at Company-owned Ruby Tuesday concept restaurants, coupled with restaurant-level cost improvements, reductions in amounts spent on media advertising (approximately $5.0 million), and lower cash paid for interest ($1.5 million) due to the prepayment of certain of our mortgage obligations and other principal payments on our debt since the same quarter of the prior fiscal year.  These were partially offset by decreases in accounts payable, accrued, and other liabilities due to the timing of payments (approximately $10.2 million) and higher amounts spent to acquire inventory (approximately $9.0 million) due primarily to the bulk purchase of lobster during our second quarter of fiscal year 2015.

Our working capital deficiency and current ratio as of December 2, 2014 were $5.6 million and 0.9:1, respectively.  As is common in the restaurant industry, we typically carry current liabilities in excess of current assets because cash (a current asset) generated from operating activities is reinvested in capital

41

expenditures (a long-term asset), debt reduction (a long-term liability), or stock repurchases (thereby reducing equity), and receivable and inventory levels are generally not significant.

Investing Activities

We require capital principally for the maintenance and upkeep of our existing restaurants, limited new restaurant construction, investments in technology, equipment, remodeling of existing restaurants, and on occasion for the acquisition of franchisees or other restaurant concepts.  Property and equipment expenditures purchased with internally generated cash flows and/or proceeds from sale-leaseback transactions for the 26 weeks ended December 2, 2014 and December 3, 2013 were $13.8 million and $17.7 million, respectively.

During the 26 weeks ended December 3, 2013, we completed sale-leaseback transactions of the land and buildings for three Company-owned Ruby Tuesday concept restaurants for gross cash proceeds of $5.9 million, exclusive of transaction costs of approximately $0.3 million.  Equipment was not included.  Net proceeds from the sale-leaseback transactions were used for general corporate purposes, including debt payments.

Capital expenditures for the remainder of the fiscal year are projected to be approximately $14.2 million to $18.2 million.  We intend to fund our investing activities with cash currently on hand, cash provided by operations, or borrowings on the Senior Credit Facility.

Financing Activities

Historically our primary sources of cash have been operating activities and refranchising transactions.  When these alone have not provided sufficient funds for both our capital and other needs, we have obtained funds through the issuance of indebtedness or through the issuance of additional shares of common stock.  Our current borrowings and credit facilities are described below.

On May 14, 2012, we entered into an indenture (the “Indenture”) among the Company, certain subsidiaries of the Company as guarantors and Wells Fargo Bank, National Association as trustee, governing the Company’s $250.0 million aggregate principal amount of 7.625% senior notes due 2020 (the “Senior Notes”).  The Senior Notes were issued at a discount of $3.7 million, which is being amortized using the effective interest method over the eight-year term of the notes.

The Senior Notes are guaranteed on a senior unsecured basis by our existing and future domestic restricted subsidiaries, subject to certain exceptions.  They rank equal in right of payment with our existing and future senior indebtedness and senior in right of payment to any of our future subordinated indebtedness.  The Senior Notes are effectively subordinated to all of our secured debt, including borrowings outstanding under our revolving credit facility, to the extent of the value of the assets securing such debt and structurally subordinated to all of the liabilities of our existing and future subsidiaries that do not guarantee the Senior Notes.

Interest on the Senior Notes is calculated at 7.625% per annum, payable semiannually on each May 15 and November 15 to holders of record on the May 1 or November 1 immediately preceding the interest payment date.  Accrued interest on the Senior Notes and our other long-term debt and capital lease obligations is included in Accrued liabilities – Rent and other in our Condensed Consolidated Balance Sheets.  The Senior Notes mature on May 15, 2020.

At any time prior to May 15, 2016, we may redeem the Senior Notes, in whole or in part, at a redemption price equal to 100% of the principal amount, plus an applicable “make-whole” premium and accrued and unpaid interest.  At any time on or after May 15, 2016, we may redeem the Senior Notes, in whole or in part, at the redemption prices specified in the Indenture plus accrued and unpaid interest.  At any time prior to May 15, 2015, we may redeem up to 35% of the Senior Notes from the proceeds of certain equity offerings.  There is no sinking fund for the Senior Notes.

The Indenture contains covenants that limit, among other things, our ability and the ability of certain of our subsidiaries to (i) incur or guarantee additional indebtedness; (ii) declare or pay dividends, redeem stock or make other distributions to stockholders; (iii) make certain investments; (iv) create liens or use assets as security in other transactions; (v) merge or consolidate, or sell, transfer, lease or dispose of substantially all of their assets; (vi) enter into transactions with affiliates; and (vii) sell or transfer certain assets.  These

42

covenants are subject to a number of important exceptions and qualifications, as described in the Indenture, and certain covenants will not apply at any time when the Senior Notes are rated investment grade by the Rating Agencies, as defined in the Indenture.  The Indenture also provides for events of default, which, if any of them occurs, would permit or require the principal, premium, if any, interest and any other monetary obligations on all the then outstanding Senior Notes to be due and payable immediately.

Under the terms of our December 2013 four-year revolving credit agreement discussed below (the “Senior Credit Facility”) we are allowed, under certain circumstances, to repurchase up to $20.0 million of the Senior Notes in any fiscal year.  We did not repurchase any of the Senior Notes during the first two quarters of fiscal year 2015.  The balance on the Senior Notes was $215.0 million at December 2, 2014.

On December 3, 2013, we entered into the Senior Credit Facility under which we may borrow up to $50.0 million with the option, subject to certain conditions, to increase the facility by up to $35.0 million.  The Senior Credit Facility, which was obtained to provide access to capital for general corporate purposes, replaced a previous five-year $200.0 million credit facility that was set to expire in December 2015.  The terms of the Senior Credit Facility provide for a $25.0 million sublimit for the issuance of standby letters of credit.

Under the terms of the Senior Credit Facility, interest rates charged on borrowings can vary depending on the interest rate option we choose to utilize.  Our options for the rate are a Base Rate or LIBOR, plus an applicable margin.  The Base Rate is defined as the highest of the issuing bank’s prime rate, the Federal Funds rate plus 0.50%, or the Adjusted LIBO rate (as defined in the Senior Credit Facility) plus 1.0%.  The applicable margin for the LIBOR rate-based option is a percentage ranging from 2.50% to 3.50% and for the Base Rate option is a percentage ranging from 1.50% to 2.50%.  We pay commitment fees quarterly ranging from 0.40% to 0.75% on the unused portion of the Senior Credit Facility.

As security for the Senior Credit Facility, we granted the lenders liens and security interests in substantially all of the shares of capital stock of the Company and each of our present and future subsidiaries, substantially all of the personal property of the Company and each of our present and future subsidiaries, and the real property, improvements, and fixtures of 49 Ruby Tuesday restaurants.  The real property, improvements, and fixtures of the 49 restaurants pledged as collateral appraised at $101.4 million at the time of the transaction and have a December 2, 2014 net book value of $80.0 million.

Under the Senior Credit Facility, we had no borrowings outstanding at December 2, 2014.  After consideration of letters of credit outstanding, we had $37.5 million available under the Senior Credit Facility as of December 2, 2014.

The Senior Credit Facility contains a number of customary affirmative and negative covenants that, among other things, limit or restrict our ability to incur liens, engage in mergers or other fundamental changes, make acquisitions, investments, loans and advances, pay dividends or other distributions, sell or otherwise dispose of certain assets, engage in certain transactions with affiliates, enter into burdensome agreements or certain hedging agreements, amend organizational documents, change accounting practices, incur additional indebtedness and prepay other indebtedness.  In addition, under the Senior Credit Facility, we are required to comply with financial covenants relating to the maintenance of a maximum leverage ratio and a minimum fixed charge coverage ratio.  The terms of the Senior Credit Facility require us to maintain a maximum leverage ratio of no more than 4.85 to 1.0 and a minimum fixed charge coverage ratio of 1.35 to 1.0 for the quarter ended December 2, 2014.  The minimum required ratios fluctuate thereafter as provided in the Senior Credit Facility.

The Senior Credit Facility terminates no later than December 3, 2017.  Upon the occurrence of an event of default, the lenders may terminate the loan commitments, accelerate all loans and exercise any of their rights under the Senior Credit Facility and any ancillary loan documents.

On December 3, 2013, in connection with our entry into the Senior Credit Facility, the Company and certain of its subsidiaries entered into loan modification agreements (the “Loan Modification Agreements”) with certain mortgage lenders to, among other things, provide waivers and consents under certain of our mortgage loan obligations to enter into the Senior Credit Facility.  The Loan Modification Agreements also, among other things, amend certain financial reporting requirements under the specified loans and modify and/or provide for certain financial covenants for the specified loans, including the minimum consolidated fixed charge coverage ratio and the minimum adjusted total debt to EBITDAR ratio.

43

Our $39.0 million in mortgage loan obligations as of December 2, 2014 consists of various loans acquired upon franchise acquisitions.  These loans, which mature between January 2015 and November 2022, have balances which range from negligible to $7.5 million and interest rates of 7.60% to 10.92%.  Many of the properties acquired from franchisees collateralize the loans outstanding.

During the 26 weeks ended December 2, 2014, we prepaid and retired three mortgage loan obligations with an aggregate balance of $3.9 million using cash on hand.  Additionally, we paid $0.4 million in prepayment premiums in connection with the retirement of these obligations.

During the 26 weeks ended December 2, 2014, we repurchased an insignificant number of shares of our common stock at a cost of $0.1 million.  As of December 2, 2014, the total number of remaining shares authorized to be repurchased was 11.8 million.  We spent $0.5 million to repurchase 0.1 million shares of RTI common stock during the 26 weeks ended December 3, 2013.

During the remainder of fiscal year 2015, we expect to fund operations, capital expansion, and any other investments from cash currently on hand, operating cash flows, or our Senior Credit Facility.

Covenant Compliance

Under the terms of the Senior Credit Facility, we are required to satisfy and maintain specified financial ratios and other financial condition tests and covenants.  The financial ratios include maximum funded debt and minimum fixed charge coverage covenants.  While as of December 2, 2014 we were in compliance with the financial ratios contained in our Senior Credit Facility, our continued ability to meet those financial ratios, tests, and covenants can be affected by events beyond our control, and we cannot assure you that we will meet those ratios, tests, and covenants.

Maximum Funded Debt Covenant

Our maximum funded debt covenant is an Adjusted Total Debt to Consolidated EBITDAR ratio.  Adjusted Total Debt, as defined in our covenants, includes items both on-balance sheet (debt and capital lease obligations) and off-balance sheet (such as the present value of leases, letters of credit and guarantees).  Consolidated EBITDAR is consolidated net loss (for the Company and its majority-owned subsidiaries) plus interest charges, income tax, depreciation, amortization, rent and other non-cash charges.  Among other charges, we have reflected share-based compensation, asset impairment and bad debt expense, as non-cash.

Consolidated EBITDAR and Adjusted Total Debt are not presentations made in accordance with U.S. generally accepted accounting principles (“GAAP”), and, as such, should not be considered a measure of financial performance or condition, liquidity or profitability.  They also should not be considered alternatives to GAAP-based net income or balance sheet amounts or operating cash flows or indicators of the amount of free cash flow available for discretionary use by management, as Consolidated EBITDAR does not consider certain cash requirements such as interest payments, tax payments or debt service requirements and Adjusted Total Debt includes certain off-balance sheet items.  Further, because not all companies use identical calculations, amounts reflected by RTI as Consolidated EBITDAR or Adjusted Total Debt may not be comparable to similarly titled measures of other companies.  We believe the information shown below is relevant as it presents the amounts used to calculate covenants which are provided to our lenders.  Non-compliance with our debt covenants could result in the requirement to immediately repay all amounts outstanding under such agreements.

The following is a reconciliation of our total long-term debt and capital leases, which are GAAP-based, to Adjusted Total Debt as defined in our bank covenants (in thousands):

	December 2, 2014
Current portion of long-term debt, including capital leases	$	4,506
Long-term debt and capital leases, less current maturities		247,915
Total long-term debt and capital leases		252,421
Present value of operating leases*		208,386
Letters of credit*		12,502
Unrestricted cash in excess of $10.0 million		(37,692	)
Unamortized discount of senior unsecured notes		2,336
Unamortized premium of mortgage loan obligations		(570	)
Adjusted Total Debt	$	437,383

44

 * Non-GAAP measure.  See below for discussion regarding reconciliation to GAAP-based amounts.

The following is a reconciliation of net loss, which is a GAAP-based measure of our operating results, to Consolidated EBITDAR as defined in our bank covenants (in thousands):

	Twelve Months
	Ended
	December 2, 2014
Net loss	$	(14,429	)
Income taxes		(851	)
Rent expense		53,357
Depreciation		51,900
Interest expense		22,956
Asset impairments		10,240
Share-based compensation expense		7,250
Restaurant closing costs		2,729
Amortization of intangibles		2,333
Restructuring costs		1,089
Non-cash accruals		1,071
Other		971
Consolidated EBITDAR	$	138,616
Adjusted Total Debt to Consolidated EBITDAR – Actual		3.16x
Maximum allowed per covenant (1)		4.85x

(1) For the remainder of fiscal year 2015, the Senior Credit Facility requires us to maintain quarterly maximum Adjusted Total Debt to EBITDAR ratios of less than or equal to 4.85x (for our third fiscal quarter) and 4.75x (for our fourth fiscal quarter). For fiscal year 2016 and thereafter, the maximum Adjusted Total Debt to EBITDAR ratio fluctuates as provided in Article VII of the Senior Credit Facility.

Minimum Fixed Charge Coverage

Our fixed charge coverage ratio compares Consolidated EBITDAR (as discussed above) to interest and cash-based rents.

The following shows our computation of our fixed charge coverage ratio (in thousands):

	Twelve Months
	Ended
	December 2, 2014
Consolidated EBITDAR	$	138,616
Interest*	$	20,585
Cash rents*		51,823
Total	$	72,408

* Non-GAAP measure.  See below for discussion regarding reconciliation to GAAP-based amounts.

Fixed Charge Covenant – Actual	1.91x
Minimum allowed per covenant (2)	1.35x

(2) For the remainder of fiscal year 2015, the Senior Credit Facility requires us to maintain quarterly minimum fixed charge coverage ratios of greater than or equal to 1.35x (for our third fiscal quarter) and 1.40x (for our fourth fiscal quarter). For fiscal year 2016 and thereafter, the minimum fixed charge coverage ratio fluctuates as provided in Article VII of the Senior Credit Facility.

Non-GAAP Amounts Used in Debt Covenant Calculations

As previously discussed, we use various non-GAAP amounts in our Adjusted Total Debt, Consolidated EBITDAR, and Fixed Charge covenant calculations.  Two of the amounts presented in the Adjusted Total Debt calculation, the present value of operating leases and letters of credit, are off-balance sheet and there is no corresponding amount presented in our Condensed Consolidated Balance Sheets.

45

Our Minimum Fixed Charge Coverage ratio requires interest to be included in the denominator.  The amount we reflect for interest in the denominator of this calculation ($20.6 million on a rolling 12 month basis) differs from interest expense determined in accordance with GAAP ($23.0 million) because of three adjustments we make.  As shown below, we exclude brokerage fees, prepayment penalties, and the amortization of loan fees and fair market value adjustments.  While these items are reflected as interest expense in our Condensed Consolidated Statements of Operations and Comprehensive Loss, they do not require on-going cash payments for servicing and therefore are not impacted by future Consolidated EBITDAR.  The table below reconciles debt covenant interest for the preceding 12 months to GAAP interest for the same time period (amounts in thousands):

Interest	$	20,585
Brokerage fees		1,729
Prepayment penalties		714
Amortization of loan fees and fair market
value adjustments		(72	)
GAAP-based interest expense	$	22,956

Our Minimum Fixed Charge Coverage ratio also allows for recurring cash rents to be included in the denominator.  Cash rents ($51.8 million on a rolling 12 month basis) differ from rents determined in accordance with GAAP ($54.2 million) by the following (amounts in thousands):

Cash rents	$	51,823
Change in rent accruals		873
Rent settlement payments		1,473
GAAP-based rent expense	$	54,169

Significant Contractual Obligations and Commercial Commitments

Long-term financial obligations were as follows as of December 2, 2014 (in thousands):

	Payments Due By Period
			Less than		1-3		3-5		More than 5
	Total		1 year		years		years		years
Notes payable and other    long-term debt, including
current maturities (a)	$	39,187	$	4,660	$	18,737	$	10,424	$	5,366
Senior unsecured notes (a)		215,000		–		–		–		215,000
Interest (b)		101,174		19,426		37,047		34,619		10,082
Operating leases (c)		359,926		47,160		85,589		71,922		155,255
Purchase obligations (d)		89,686		54,528		29,037		4,285		1,836
Pension obligations (e)		32,079		3,319		4,941		4,741		19,078
Total (f)	$	837,052	$	129,093	$	175,351	$	125,991	$	406,617

(a)   See Note H to the Condensed Consolidated Financial Statements for more information.

(b)   Amounts represent contractual interest payments on our fixed-rate debt instruments.  Interest payments on our variable-rate notes payable with balances of $1.4 million as of December 2, 2014 have been excluded from the amounts shown above, primarily because the balances outstanding can fluctuate monthly.  Additionally, the amounts shown above include interest payments on the Senior Notes at the current interest rate of 7.625%.

(c)   This amount includes operating leases totaling $2.3 million for which sublease income from franchisees or others is expected.  Certain of these leases obligate us to pay maintenance costs, utilities, real estate taxes, and insurance, which are excluded from the amounts shown above.  See Note G to the Condensed Consolidated Financial Statements for more information.

(d)   The amounts for purchase obligations include cash commitments under contract for food items and supplies, advertising, utility contracts, and other miscellaneous commitments.

(e)   See Note J to the Condensed Consolidated Financial Statements for more information.

(f)   This amount excludes $4.4 million of gross unrecognized tax benefits due to the uncertainty regarding the timing of future cash outflows associated with such obligations.

46

Commercial Commitments as of December 2, 2014 (in thousands):

	Payments Due By Period
			Less than		1-3		3-5		More than 5
	Total		1 year		years		years		years
Letters of credit	$	12,502	$	12,217	$	285	$	–	$	–
Divestiture guarantees		5,822		934		1,912		1,733		1,243
Lease guarantees		1,498		268		542		482		206
Total	$	19,822	$	13,419	$	2,739	$	2,215	$	1,449

At December 2, 2014, we had divestiture guarantees, which arose in fiscal 1996, when our shareholders approved the distribution of our family dining restaurant business (Morrison Fresh Cooking, Inc., “MFC”) and our health care food and nutrition services business (Morrison Health Care, Inc., “MHC”). Subsequent to that date Piccadilly Cafeterias, Inc. (“Piccadilly”) acquired MFC and Compass Group (“Compass”) acquired MHC. As agreed upon at the time of the distribution, we have been contingently liable for payments to MFC and MHC employees retiring under MFC’s and MHC’s versions of the Management Retirement Plan and the Executive Supplemental Pension Plan (the two non-qualified defined benefit plans) for the accrued benefits earned by those participants as of March 1996.

We estimated our divestiture guarantees at December 2, 2014 to be $5.4 million for employee benefit plans (all of which resides with MHC following Piccadilly’s bankruptcy in fiscal year 2004).  We believe the likelihood of being required to make payments for MHC’s portion to be remote due to the size and financial strength of MHC and Compass.

As of December 2, 2014, we are the guarantor of two third-party leases associated with closed concept restaurants.  Lease guarantee amounts in the table above represent lease payments for which we are contingently liable.  While we believe that the likelihood of being required to make these lease payments is remote, we recorded a guarantee liability of $0.1 million in our Condensed Consolidated Balance Sheets at both December 2, 2014 and June 3, 2014.

Accounting Pronouncements Adopted During Fiscal Year 2015

In July 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (“ASU 2013-11”).  The guidance requires an entity to present its deferred tax asset for a net operating loss carryforward, similar tax loss, or a tax credit carryforward net of unrecognized tax benefits when settlement in this manner is available under the tax law, which would be based on facts and circumstances as of the balance sheet reporting date and would not consider future events.  Gross presentation of an unrecognized tax benefit will still be required in the notes to the financial statements.  We adopted ASU 2013-11 on a prospective basis during the first quarter of fiscal year 2015.  The adoption of this standard in the first quarter of fiscal year 2015 resulted in a reclasification of $5.0 million of our liability for unrecognized tax benefits against our deferred tax assets.

Accounting Pronouncements Not Yet Adopted

In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements – Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASU 2014-15”).  The guidance requires an entity to evaluate whether there are conditions or events, in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued (or within one year after the financial statements are available to be issued when applicable) and to provide related footnote disclosures in certain circumstances.  The guidance is effective for the annual period ending after December 15, 2016, and for annual and interim periods thereafter (our fiscal year 2017).  Early application is permitted.  We do not believe the adoption of this guidance will have a significant impact on our Condensed Consolidated Financial Statements.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”).  ASU 2014-09 is a jointly converged standard between the FASB and the International Accounting Standards Board, and will replace almost all existing revenue recognition guidance, including industry specific guidance, upon its effective date. The standard’s core principle is for companies to recognize revenue to depict the transfer of goods or services to customers in amounts that reflect the

47

consideration to which the company expects to be entitled in exchange for those goods and services. ASU 2014-09 also enhances disclosures about revenue, provides guidance for transactions that were not addressed comprehensively in previous guidance, and improves guidance for multiple-element arrangements.  The standard permits the use of either the retrospective or cumulative effect transition method.  The guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016 (the first quarter of our fiscal year 2018).  We have not yet selected a transition method and are currently evaluating the impact of this guidance on our Condensed Consolidated Financial Statements.

Known Events, Uncertainties and Trends:

Financial Strategy and Stock Repurchase Plan

Our financial strategy is to utilize a prudent amount of debt, including operating leases, letters of credit, and any guarantees, to minimize the weighted average cost of capital while allowing financial flexibility.  This strategy has periodically allowed us to repurchase our common stock.  During the first two quarters of fiscal year 2015, we repurchased an insignificant number of shares of our common stock at an aggregate cost of $0.1 million.  As of December 2, 2014, the total number of remaining shares authorized to be repurchased was 11.8 million.  To the extent not funded with cash on hand or cash from operating activities, additional repurchases, if any, may be funded by borrowings on the Senior Credit Facility.  The repurchase of shares in any particular future period and the actual amount thereof remain at the discretion of the Board of Directors, and no assurance can be given that shares will be repurchased in the future.

Mortgage Loan Payoffs and Repurchases of Senior Notes

During the 13 weeks ended December 2, 2014, we prepaid and retired three mortgage loan obligations with an aggregate balance of $3.9 million using cash on hand.  Additionally, we paid $0.4 million in prepayment premiums in connection with the retirement of these obligations.

We are allowed under the terms of the Senior Credit Facility to prepay up to $20.0 million of indebtedness in any fiscal year to various holders of the Senior Notes.  We did not repurchase any of the Senior Notes during the 26 weeks ended December 2, 2014.  As of the date of this filing, we may repurchase $20.0 million of the Senior Notes during the remainder of fiscal year 2015.  Any future repurchases of the Senior Notes, if any, will be funded with available cash on hand.

Dividends

During fiscal 1997, our Board of Directors approved a dividend policy as an additional means of returning capital to our shareholders.  No dividends were declared or paid during the 26 weeks ended December 2, 2014 or December 3, 2013.  Thepayment of a dividend in any particular period and the actual amount thereof remain at the discretion of the Board of Directors, and no assurance can be given that dividends will be paid in the future.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Disclosures about Market Risk

We are exposed to market risk from fluctuations in interest rates and changes in commodity prices. The interest rate charged on our Senior Credit Facility can vary based on the interest rate option we choose to utilize. Our options for the rate are LIBOR or a Base Rate plus an applicable margin. The Base Rate is defined as the highest of the issuing bank’s prime rate, the Federal Funds rate plus 0.50%, or the Adjusted LIBO rate (as defined in the Senior Credit Facility) plus 1.0%. The applicable margin for the LIBOR rate-based option is a percentage ranging from 2.50% to 3.50% and for the Base Rate option is a percentage ranging from 1.50% to 2.50%.  As of December 2, 2014, the total amount of outstanding debt subject to interest rate fluctuations was $1.4 million. A hypothetical 100 basis point change in short-term interest rates would result in an increase or decrease in interest expense of an insignificant amount per year, assuming a consistent capital structure.

Many of the ingredients used in the products we sell in our restaurants are commodities that are subject to unpredictable price volatility.  This volatility may be due to factors outside our control such as weather and seasonality.  We attempt to minimize the effect of price volatility by negotiating fixed price contracts for the supply of key ingredients.  Historically, and subject to competitive market conditions, we have been able to mitigate the negative impact of price volatility through adjustments to average check or menu mix.

48

ITEM 4.  CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management, with the participation and under the supervision of the Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report.  The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms.  Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.  Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.  Based on the evaluation, the Chief Executive Officer and the Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of December 2, 2014.

Changes in Internal Control

During the fiscal quarter ended December 2, 2014, there were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II — OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

We are presently, and from time to time, subject to pending claims and lawsuits arising in the ordinary course of business, including claims relating to injury or wrongful death under “dram shop” laws, workers’ compensation and employment matters, claims relating to lease and contractual obligations, and claims from customers alleging illness or injury.  We provide reserves for such claims when payment is probable and estimable in accordance with U.S. generally accepted accounting principles.  At this time, in the opinion of management, the ultimate resolution of pending legal proceedings will not have a material adverse effect on our consolidated operations, financial position, or cash flows.  See Note N to the Condensed Consolidated Financial Statements for further information about our legal proceedings as of December 2, 2014.

ITEM 1A.  RISK FACTORS

Information regarding risk factors appears in our Annual Report on Form 10-K for the year ended June 3, 2014 in Part I, Item 1A. Risk Factors.  There have been no material changes from the risk factors previously disclosed in our Annual Report on Form 10-K.

ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

From time to time, our Board of Directors has authorized the repurchase of shares of our common stock as a means to return excess capital to our shareholders.  The timing, price, quantity, and manner of the purchases to be made are at the discretion of management upon instruction from the Board of Directors, depending upon market conditions.  Although 11.8 million shares remained available for purchase under existing programs, which consists of 1.8 million shares remaining under a July 11, 2007 authorization by the Board of Directors to repurchase 6.5 million shares and a January 8, 2013 authorization by the Board of Directors, not yet begun, to repurchase 10.0 million shares, we did not repurchase any shares of our common stock during the 13 weeks ended December 2, 2014.  The repurchase of shares in any particular future period and the actual amount thereof remain at the discretion of the Board of Directors, and no assurance can be given that shares will be repurchased in the future.

49

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.  MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5.  OTHER INFORMATION

None.

ITEM 6. EXHIBITS

The following exhibits are filed as part of this report:

 Exhibit No.

10	.1	Indenture, dated January 7, 2015, to the Ruby Tuesday, Inc. Salary Deferral Plan.
10	.2	Indenture, dated January 7, 2015, to the Morrison Retirement Plan.
12	.1	Statement regarding computation of Consolidated Ratio of Earnings to Fixed Charges.
31	.1	Certification of  Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31	.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32	.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
		Section 906 of the Sarbanes-Oxley Act of 2002.
32	.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
		Section 906 of the Sarbanes-Oxley Act of 2002.
10	1.INS	XBRL Instance Document.
10	1.SCH	XBRL Schema Document.
10	1.CAL	XBRL Calculation Linkbase Document.
10	1.DEF	XBRL Definition Linkbase Document.
10	1.LAB	XBRL Labels Linkbase Document.
10	1.PRE	XBRL Presentation Linkbase Document.

50

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

RUBY TUESDAY, INC.

(Registrant)

Date: January 12, 2015  BY: /s/ JILL M. GOLDER —————————————— Jill M. Golder Executive Vice President – Chief Financial Officer, Treasurer, and Assistant Secretary (Principal Financial Officer)

Date: January 12, 2015  BY: /s/ FRANKLIN E. SOUTHALL, JR. ————————————————— Franklin E. Southall, Jr. Vice President – Corporate Controller and Principal Accounting Officer (Principal Accounting Officer)

51

EX-10.1

RUBY TUESDAY, INC.

SALARY DEFERRAL PLAN

THIS INDENTURE is made on the 7th day of January, 2015, by Ruby Tuesday, Inc., a corporation duly organized and existing under the laws of the State of Georgia (hereinafter called the “Primary Sponsor”).

W I T N E S S E T H:

WHEREAS, the Primary Sponsor established by indenture dated June 1, 1968, the Morrison Employees Retirement Savings Trust (the “Plan”), which was first amended and restated, as the Morrison Restaurants Inc. Salary Deferral Plan, by indenture dated December 31, 1993, and which was further amended and restated, as the Ruby Tuesday, Inc. Salary Deferral Plan, by indenture dated April 8, 2001, and subsequently amended by the First through Seventh Amendments thereto and which was subsequently further amended and restated by indenture dated October 7, 2009 and subsequent amended by the First and Second Amendments thereto; and

WHEREAS, the Primary Sponsor now wishes to amend and restate the Plan primarily to consolidate changes made to the Plan that are required for resubmitting the Plan to the Internal Revenue Service for an updated favorable determination letter as a Cycle D filer; and

WHEREAS, the Plan is intended to be a profit sharing plan within the meaning of Treasury Regulations Section 1.401-1(b)(1)(ii) and also contains a cash or deferred arrangement as described in Section 401(k) of the Internal Revenue Code of 1986; and

WHEREAS, the provisions of the Plan, as amended and restated herein, shall apply to Plan Years beginning on or after January 1, 2015, except to the extent the provisions are required to apply at an earlier date or to any other members to comply with applicable law;

NOW, THEREFORE, the Primary Sponsor does hereby amend and restate the Plan in its entirety, generally effective as of January 1, 2015, except as otherwise provided herein, to read as follows:

RUBY TUESDAY, INC.

SALARY DEFERRAL PLAN

		PAGE
SECTION 1	DEFINITIONS	1
SECTION 2	ELIGIBILITY	13
SECTION 3	CONTRIBUTIONS	14
SECTION 4	ALLOCATIONS	19
SECTION 5	INVESTMENT FUNDS AND INVESTMENTS OF TRUST ASSETS	20
SECTION 6	PLAN LOANS	21
SECTION 7	IN-SERVICE WITHDRAWALS	24
SECTION 8	PAYMENT OF BENEFITS ON TERMINATION OF EMPLOYMENT	27
SECTION 9	PAYMENT OF BENEFITS ON RETIREMENT	30
SECTION 10	DEATH BENEFITS	31
SECTION 11	GENERAL RULES ON DISTRIBUTIONS	32
SECTION 12	ADMINISTRATION OF THE PLAN	33
SECTION 13	CLAIMS REVIEW PROCEDURE	36
SECTION 14	MISCELLANEOUS	39
SECTION 15	PROHIBITION AGAINST DIVERSION	41
SECTION 16	LIMITATION OF RIGHTS	41
SECTION 17	AMENDMENT TO OR TERMINATION OF THE PLAN AND THE TRUST	42
SECTION 18	ADOPTION OF PLAN BY AFFILIATES	43
SECTION 19	QUALIFICATION AND RETURN OF CONTRIBUTIONS	44
SECTION 20	SECTION 16 OF SECURITIES EXCHANGE ACT OF 1934	44
SECTION 21	INCORPORATION OF SPECIAL LIMITATIONS	45
APPENDIX A	LIMITATION ON ALLOCATIONS	A-1
APPENDIX B	TOP-HEAVY PROVISIONS	B-1
APPENDIX C	SPECIAL NONDISCRIMINATION RULES	C-1
APPENDIX D	MINIMUM DISTRIBUTION REQUIREMENTS	D-1

SECTION 1

DEFINITIONS

Wherever used herein, the masculine pronoun shall be deemed to include the feminine, and the singular to include the plural, unless the context clearly indicates otherwise and the following words and phrases shall, when used herein, have the meanings set forth below:

1.1            “Account” means a Participant’s aggregate balance in the following accounts, as adjusted pursuant to the Plan as of any given date:

  (a)   “Employee Deferred Account” which shall reflect a Participant’s interest in contributions made by a Plan Sponsor under Plan Section 3.1.

  (b)   “Company Matching Account” which shall be divided into the following two subaccounts:

    (1)           the “Pre-2007 Company Matching Subaccount” which reflects a Participant’s interest in matching contributions made by a Plan Sponsor under Plan Section 3.2 for Plan Years beginning prior to January 1, 2007; and

    (2)           the “Post-2006 Company Matching Subaccount” which reflects a Participant’s interest in matching contributions made by a Plan Sponsor under Plan Section 3.2 for Plan Years beginning after December 31, 2006.

 (c)     “Voluntary Contribution Account” which shall reflect a Participant’s interest in Voluntary Contributions made by a Participant to the Fund pursuant to Plan Section 3.3.

 (d)    “Rollover Account” which shall reflect a Participant’s interest in Rollover Amounts.

In addition, the Plan Administrator shall allocate the interest of a Participant in any funds transferred to the Plan in a trust-to-trust transfer (other than Rollover Amounts) or pursuant to the merger of another tax-qualified retirement plan with the Plan among the above accounts as the Plan Administrator determines best reflects the interest of the Participant or among such other accounts as the Plan Administrator may establish from time to time.

1.2“Affiliate” means (a) any corporation which is a member of the same controlled group of corporations (within the meaning of Code Section 414(b)) as is a Plan Sponsor, (b) any other trade or business (whether or not incorporated) under common control (within the meaning of Code Section 414(c)) with a Plan Sponsor, (c) any other corporation, partnership or other organization which is a member of an affiliated service group (within the meaning of Code Section 414(m)) with a Plan Sponsor, and (d) any other entity required to be aggregated

-1-

with a Plan Sponsor pursuant to regulations under Code Section 414(o).  Notwithstanding the foregoing, for purposes of applying the limitations set forth in Appendix A and for purposes of determining Annual Compensation under Appendix A, the references to Code Sections 414(b) and (c) above shall be as modified by Code Section 415(h).

1.3“Annual Compensation” means an Employee’s wages, salaries, fees for professional services, and other amounts received (without regard to whether or not an amount is paid in cash) for personal services actually rendered in the course of employment with a Plan Sponsor and its Affiliates during a Plan Year to the extent that the amounts are includible in gross income (to the extent contemplated by Treasury Regulations Section 1.415-2(b), but limited to the extent contemplated by Treasury Regulations Section 1.415-2(c) (including amounts realized from the exercise of non-qualified stock options)), to the extent not in excess of the Annual Compensation Limit for all purposes under the Plan except for purposes of determining who are Highly Compensated Employees.  Notwithstanding the above, Annual Compensation shall be determined as follows:

(a)      Annual Compensation shall only include amounts received for the portion of the Plan Year during which the Employee was a Participant for purposes of (1) determining, with respect to each Plan Sponsor, the amount of contributions made by or on behalf of an Employee under Plan Section 3 and allocations under Plan Section 4, and (2) applying the provisions of Appendix C hereto for such Plan Years as the Secretary of the Treasury may allow;

(b)for all purposes under the Plan, Annual Compensation shall not include reimbursements or other expense allowances, fringe benefits (cash and noncash), moving expenses, deferred compensation, and welfare benefits;

(c)     in determining the amount of contributions under Plan Section 3 and allocations under Plan Section 4 made by or on behalf of an Employee, Annual Compensation shall include tip income only to the extent of the greater of (1) the amount actually reported by the Employee to the Plan Sponsor, or (2) the amount the Plan Sponsor is required to report in accordance with Code Section 6053(c);

(d)     for all purposes under the Plan, Annual Compensation shall include any amount which would have been paid during a Plan Year, but was contributed by a Plan Sponsor on behalf of an Employee pursuant to a salary reduction agreement which is not includable in the gross income of the Employee under Code Section 125, 132(f)(4), 402(g)(3), or 457;

(e)     in accordance with Code Section 414(u)(12), Annual Compensation shall include any differential wage payment (within the meaning of Code Section 3401(h)(2)) made by a Plan Sponsor to an individual who does not currently perform services for the Plan Sponsor by reason of qualified military service (within the meaning of Code

-2-

 Section 414(u)(5)) to the extent those payments do not exceed the amounts the individual would have received if the individual had continued to perform services for the Plan Sponsor; and

(f)     for purposes of applying the annual addition limits in Appendix A, Annual Compensation:

(1)           shall be measured by the limitation year;

(2)           shall include compensation paid to the Participant by the later of (A) 2½ months after the Participant’s severance from employment with the Plan Sponsor, or (B) the end of the limitation year that includes the date of the Participant’s severance from employment with the Plan Sponsor, if such compensation is regular compensation for services during the Participant’s regular working hours, or compensation for services outside the Participant’s regular working hours (such as overtime and shift differential), commissions, bonuses, or other similar payments, and the compensation would have been paid to the Participant prior to a severance from employment if the Participant had continued in employment with the Plan Sponsor; and

(3)           shall not include any other post-Termination of Employment compensation.

1.4“Annual Compensation Limit” means $265,000 (for 2015), which amount may be adjusted in subsequent Plan Years based on changes in the cost of living as announced by the Secretary of the Treasury.

1.5“Appeals Fiduciary” means an individual or group of individuals appointed to review appeals of claims for benefits payable due to a Participant’s Disability made pursuant to Plan Section 13.4.

1.6“Beneficiary” means the person or trust that a Participant designated most recently in writing to the Plan Administrator; provided, however, that if the Participant has failed to make a designation, no person designated is alive, no trust has been established, or no successor Beneficiary has been designated who is alive, the term “Beneficiary” means (a) the Participant’s spouse or (b) if no spouse is alive, the Participant’s surviving children, or (c) if no children are alive, the Participant’s parent or parents, or (d) if no parent is alive, the Participant’s estate.  Notwithstanding the preceding sentence, the spouse of a married Participant shall be his Beneficiary unless that spouse has consented in writing to the designation by the Participant of some other person or trust and the spouse’s consent acknowledges the effect of the designation and is witnessed by a notary public or a Plan representative.  A Participant may change his designation at any time.  However, a Participant may not change his designation without further consent of his spouse under the terms of the preceding sentence unless the spouse’s consent permits designation of another person or trust

-3-

without further spousal consent and acknowledges that the spouse has the right to limit consent to a specific beneficiary and that the spouse voluntarily relinquishes this right.  Notwithstanding the above, the spouse’s consent shall not be required if the Participant establishes to the satisfaction of the Plan Administrator that the spouse cannot be located, if the Participant has a court order indicating that he is legally separated or has been abandoned (within the meaning of local law) unless a “qualified domestic relations order” (as defined in Code Section 414(p)) provides otherwise, or if there are other circumstances as the Secretary of the Treasury prescribes.  If the spouse is legally incompetent to give consent, consent by the spouse’s legal guardian shall be deemed to be consent by the spouse.  If, subsequent to the death of a Participant, the Participant’s Beneficiary dies while entitled to receive benefits under the Plan, the successor Beneficiary, if any, or the Beneficiary listed under Subsection (a) or, if no spouse is alive, Subsection (d) shall be the Beneficiary.

1.7“Board of Directors” means the Board of Directors of the Primary Sponsor.

1.8“Break in Service” means the failure of an Employee, in connection with a termination of employment other than by reason of death or attainment of a Retirement Date, to complete more than 500 Hours of Service in any Plan Year.

1.9“Catch-Up Contribution” means contributions made pursuant to Code Section 414(v) and Section 3.1(c).

1.10         “Code” means the Internal Revenue Code of 1986, as amended.

1.11         “Company Stock” means shares of any class of stock issued by the Primary Sponsor or any Affiliate and constituting “qualifying employer securities” within the meaning of ERISA Section 407(d)(3).

1.12         “Deferral Amount” means a contribution of a Plan Sponsor on behalf of a Participant pursuant to Plan Section 3.1.

1.13   “Direct Rollover” means a payment by the Plan to the Eligible Retirement Plan specified by the Distributee.

1.14   “Disability” means the inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than twelve (12) months.  The determination of whether or not a Disability exists shall be made by the Plan Administrator and shall be substantiated by competent medical evidence; provided, however, that the Plan Administrator may treat a Participant as being subject to a Disability if the Participant provides a copy of a valid determination by the U.S. Social Security Administration that the Participant is disabled under the federal Social Security Act.

-4-

1.15   “Distributee” means an Employee or former Employee.  In addition, the Employee’s or former Employee’s surviving spouse and the Employee’s or former Employee’s spouse or former spouse who is the alternate payee under a qualified domestic relations order (as defined in Code Section 414(p)), are Distributees with regard to the interest of the spouse or former spouse.  Effective for distributions made on and after January 1, 2008, a non-spouse Beneficiary of a deceased Participant who is either an individual or an irrevocable trust, where the beneficiaries of such trust are identifiable and the trustee provides the Plan Administrator with a final list of trust beneficiaries or a copy of the trust document by October 31 of the year following the Participant’s death, shall be a Distributee with regard to the interest of the deceased Participant, but only if the Eligible Rollover Distribution is transferred in a direct trustee-to-trustee transfer to an Eligible Retirement Plan which is an individual retirement account described in Code Section 408(a) or an individual retirement account described in Code Section 408(b) (other than an endowment contract).

1.16         “Elective Deferrals” means, with respect to any taxable year of the Participant, the sum of:

(a)      any Deferral Amounts;

(b)      any contributions made by or on behalf of a Participant under any other qualified cash or deferred arrangement as defined in Code Section 401(k), whether or not maintained by a Plan Sponsor, to the extent such contributions are not or would not, but for Code Section 402(g)(1) be included in the Participant’s gross income for the taxable year; and

(c)     any other contributions made by or on behalf of a Participant pursuant to Code Section 402(g)(3).

1.17 “Eligibility Service” means a six-consecutive-month period beginning on the date on which the Employee first performs an Hour of Service upon his employment or reemployment with the Plan Sponsor.

1.18“Eligible Employee” means any Employee of a Plan Sponsor other than an Employee who is (a) covered by a collective bargaining agreement between a union and a Plan Sponsor, provided that retirement benefits were the subject of good faith bargaining, unless the collective bargaining agreement provides for participation in the Plan, (b) a leased employee within the meaning of Code Section 414(n)(2), (c) deemed to be an Employee of a Plan Sponsor pursuant to regulations under Code Section 414(o), or (d) a Highly Compensated Employee or an Employee who, as of the Employee’s date of hire, the Plan Administrator reasonably determines based on his then rate of pay will be a Highly Compensated Employee in one of the next two immediately subsequent Plan Years following the Plan Year of the Employee's date of hire.  A Participant who is first identified as a Highly Compensated Employee with respect to a Plan Year shall cease to be an Eligible Employee as soon as that identification can reasonably be

-5-

made following the first day of that Plan Year.  In addition, no person who is initially classified by a Plan Sponsor as an independent contractor for federal income tax purposes shall be regarded as an Eligible Employee for that period, regardless of any subsequent determination that any such person should have been characterized as a common law employee of the Plan Sponsor for the period in question.

1.19“Eligible Retirement Plan” means any of the following that will accept a Distributee’s Eligible Rollover Distribution:

(a)          an individual retirement account described in Code Section 408(a);

(b)          an individual retirement annuity described in Code Section 408(b) (other than an endowment contract);

(c)          an annuity plan described in Code Section 403(a) or an annuity contract described in Code Section 403(b), unless the Distributee is a non-spouse Beneficiary of a deceased Participant;

(d)          a qualified trust described in Code Section 401(a), unless the Distributee is a non-spouse Beneficiary of a deceased Participant;

(e)          an eligible plan under Code Section 457(b) which is maintained by a state or political subdivision of a state, or any agency or instrumentality of a state or political subdivision and which agrees to separately account for amounts transferred into such plan from this Plan, unless the Distributee is a non-spouse Beneficiary of a deceased Participant; or

(f)          effective January 1, 2008, to the extent permitted and in accordance with the rules applicable under Code Section 408A, a Roth individual retirement account described in Code Section 408A, unless the Distributee is a non-spouse Beneficiary of a deceased Participant.

If any portion of an Eligible Rollover Distribution is attributable to payments or distributions from a designated Roth account (as defined in Code Section 402A), an Eligible Retirement Plan with respect to such portion shall include only another designated Roth account and a Roth IRA.

1.20“Eligible Rollover Distribution” means any distribution of all or any portion of the Distributee’s Account:

(a)          including any portion of the distribution that is not includable in gross income, provided such amount is distributed directly to one of the following:

-6-

(1)           an individual retirement account described in Code Section 408(a) or an individual retirement annuity described in Code Section 408(b) (other than an endowment contract); or

(2)           a qualified trust as described in Code Section 401(a) or an annuity contract described in Code Section 403(b), but only to the extent that:

(A)           the distribution is made in a direct trustee-to-trustee transfer; and

(B)           the transferee trust or contract provides for separate accounting for amounts so transferred (and earnings thereon), including separately accounting for the portion of the distribution which is includable in income and the portion which is not includable in income; and

(b)           excluding:

(1)           any distribution that is one of a series of substantially equal periodic payments made (not less frequently than annually) for the life (or life expectancy) of the Distributee or the joint lives (or joint life expectancies) of the Distributee and the Distributee’s designated Beneficiary, or for a specified period of ten (10) years of more;

(2)           any distribution to the extent such distribution is required under Code Section 401(a)(9);

(3)           any distribution which is made upon hardship of the Employee;

(4)           except as otherwise provided in this Section, the portion of any distribution that is not includable in gross income (determined without regard to the exclusions for net unrealized appreciation with respect to employer securities); and

(5)           if the Distributee is a non-spouse Beneficiary of a deceased Participant, any distribution other than a direct trustee-to-trustee transfer to an individual retirement account described in Code Section 408(a) or an individual retirement annuity described in Code Section 408(b) (other than an endowment contract).

1.21“Employee” means any person who is (a) a common law employee of a Plan Sponsor or an Affiliate, (b) a leased employee within the meaning of Code Section 414(n)(2)

-7-

with respect to a Plan Sponsor, or (c) deemed to be an employee of a Plan Sponsor pursuant to regulations under Code Section 414(o).

1.22“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

1.23“Fiduciary” means each Named Fiduciary and any other person who exercises or has any discretionary authority or control regarding management or administration of the Plan, any other person who renders investment advice for a fee or has any authority or responsibility to do so with respect to any assets of the Plan, or any other person who exercises or has any authority or control respecting management or disposition of assets of the Plan.

1.24“Fund” means the amount at any given time of cash and other property held by the Trustee pursuant to the Plan.

1.25“Highly Compensated Employee” means, with respect to a Plan Year, each Employee who:

(a)           was at any time during the Plan Year or the immediately preceding Plan Year an owner of more than five percent (5%) of the outstanding stock of a Plan Sponsor or Affiliate or more than five percent (5%) of the total combined voting power of all stock of a Plan Sponsor or Affiliate; or

(b)           received Annual Compensation in excess of $115,000 during the immediately preceding Plan Year (for determining Highly Compensated Employees for the 2015 Plan Year), which amount shall be adjusted for changes in the cost of living as provided in regulations issued by the Secretary of the Treasury, and was in the top-paid group of employees for such preceding year; or

(c)           is a former Employee who met the requirements of Subsection (a) or (b) at the time the former Employee separated from service with the Plan Sponsor or an Affiliate or at any time after the former Employee reached age 55.  The determination of who is a former Highly Compensated Employee is based on the rules applicable to determining Highly Compensated Employee status as in effect for that determination year in accordance with Treasury Regulation Section 1.414(q)-1T, Q&A-4 and Notice 97-45 or later guidance under the Code.

Pursuant to Code Section 414(q)(3), an Employee is in the top-paid group for any year if an Employee is in the group consisting of the top twenty percent (20%) of Employees of the Plan Sponsor ranked on the basis of Annual Compensation determined, without regard to the Annual Compensation Limit, paid to Employees during such year (the “top-paid group”).

-8-

1.26“Hour of Service” means:

(a)       Each hour for which an Employee is paid, or entitled to payment, for the performance of duties for a Plan Sponsor or any Affiliate during the applicable computation period, and such hours shall be credited to the computation period in which the duties are performed;

(b)       Each hour for which an Employee is paid, or entitled to payment, by a Plan Sponsor or any Affiliate on account of a period of time during which no duties are performed (irrespective of whether the employment relationship has terminated) due to vacation, holiday, illness, incapacity (including disability), layoff, jury duty, military duty or leave of absence;

(c)       Each hour for which back pay, irrespective of mitigation of damages, is either awarded or agreed to by a Plan Sponsor or any Affiliate, and such hours shall be credited to the computation period or periods to which the award or agreement for back pay pertains rather than to the computation period in which the award, agreement or payment is made; provided, that the crediting of Hours of Service for back pay awarded or agreed to with respect to periods described in Subsection (b) of this Section shall be subject to the limitations set forth in Subsection (f);

(d)       Solely for purposes of determining whether a Break in Service has occurred, each hour during any period that the Employee is absent from work (1) by reason of the pregnancy of the Employee, (2) by reason of the birth of a child of the Employee, (3) by reason of the placement of a child with the Employee in connection with the adoption of the child by the Employee, or (4) for purposes of caring for such child for a period immediately following its birth or placement shall be credited (A) only in the computation period in which the absence from work begins, if the Employee would be prevented from incurring a Break in Service in that year solely because of that credit, or (B), in any other case, in the next following computation period;

(e)       Without duplication of the Hours of Service counted pursuant to Subsection (d) hereof and solely for such purposes as required pursuant to the Family and Medical Leave Act of 1993 and the regulations thereunder (the “FMLA”), each hour (as determined pursuant to the FMLA) for which an Employee is granted leave under the FMLA (1) for the birth of a child, (2) for placement with the Employee of a child for adoption or foster care, (3) to care for the Employee’s spouse, child or parent with a serious health condition, or (4) for a serious health condition that makes the Employee unable to perform the functions of the Employee’s job;

(f)       The Plan Administrator shall credit Hours of Service in accordance with the provisions of Section 2530.200b-2(b) and (c) of the U.S. Department of Labor Regulations or such other federal regulations as may from time to time be applicable

-9-

and determine Hours of Service from the employment records of a Plan Sponsor or in any other manner consistent with regulations promulgated by the Secretary of Labor, and shall construe any ambiguities in favor of crediting Employees with Hours of Service.  Notwithstanding any other provision of this Section, in no event shall an Employee be credited with more than 501 Hours of Service during any single continuous period during which he performs no duties for the Plan Sponsor or Affiliate; and

(g)       In the event that a Plan Sponsor or an Affiliate acquires assets of another corporation or entity or a controlling interest of the stock of another corporation or merges with another corporation or entity and is the surviving entity, or if an Employee of a Plan Sponsor was previously employed by an entity that becomes under common control or ownership with the Plan Sponsor, as determined by the Board of Directors of the Plan Sponsor, then service of an Employee who was employed by the prior corporation or entity shall be counted in the manner provided, with the consent of the Primary Sponsor, in resolutions adopted by the Plan Sponsor which authorizes the counting of such service.

1.27“Investment Committee” means a committee, which may be established to direct the Trustee with respect to investments of the Fund.

1.28“Investment Fund” means individual subfunds of the Fund as may be established by the Plan Administrator from time to time for the investment of the Fund.

1.29“Investment Manager” means a Fiduciary, other than the Trustee, the Plan Administrator, or a Plan Sponsor, who may be appointed by the Primary Sponsor:

(a)        who has the power to manage, acquire, or dispose of any assets of the Fund or a portion thereof; and

(b)        who

(1)      is registered as an investment adviser under the Investment Advisers Act of 1940;

(2)      is not registered as an investment adviser under such Act by reason of paragraph (1) of Section 203A(a) of such Act, is registered as an investment adviser under the laws of the State (referred to in paragraph (1) of Section 203A(a) of such Act) in which it maintains its principal office and place of business, and, at the time the fiduciary last filed the registration form most recently filed by the fiduciary with such State in order to maintain the fiduciary’s registration under the laws of such State, also filed a copy of such form with the Secretary of Labor;

-10-

(3)      is a bank as defined in the such Act; or

(4)      is an insurance company qualified to perform services described in Subsection (a) above under the laws of more than one state; and

(c)       who has acknowledged in writing that he is a Fiduciary with respect to the Plan.

1.30“Named Fiduciary” means only the following:

(a)the Plan Administrator;

(b)the Trustee;

(c)the Investment Committee;

(d)the Investment Manager; and

(e)the Appeals Fiduciary.

1.31“Normal Retirement Age” means age 65.

1.32“Participant” means any Employee or former Employee who has become a participant in the Plan for so long as his vested Account has not been fully distributed pursuant to the Plan.

1.33“Plan Administrator” means the organization or person designated to administer the Plan by the Primary Sponsor and, in lieu of any such designation, means the Primary Sponsor.

1.34“Plan Sponsor” means individually the Primary Sponsor and any Affiliate or other entity which has adopted the Plan and Trust.

1.35“Plan Year” means the calendar year.

1.36“Retirement Date” means the date on which the Participant terminates employment on or after (a) attaining Normal Retirement Age or (b) becoming subject to a Disability.

1.37“Required Beginning Date” has the meaning ascribed to it in Section 5 of Appendix D.

-11-

1.38“Rollover Amount” means any amount transferred to the Fund by a Participant, which amount qualifies as an eligible rollover distribution under Code Sections 401(a)(31), 402(c)(4), 403(a)(4), 403(b)(8), 408(d)(3), or 457(e)(16), and any regulations issued thereunder.

1.39“Termination Completion Date” means the last day an Employee or former Employee completes his fifth consecutive Break in Service.

1.40“Termination of Employment” means a severance from employment (within the meaning of Code Section 401(k)(2)(B)(i)(I)) of an Employee from all Plan Sponsors and Affiliates for any reason other than death, Disability, or attainment of a Retirement Date.  Any absence from active employment of the Plan Sponsor and Affiliates by reason of an approved leave of absence shall not be deemed for any purpose under the Plan to be a Termination of Employment.  Transfer of an Employee from one Plan Sponsor to another Plan Sponsor or to an Affiliate shall not be deemed for any purpose under the Plan to be a Termination of Employment.  In addition, transfer of an Employee to another employer (other than a Plan Sponsor or an Affiliate) in connection with a corporate transaction involving a sale of assets, merger, or sale of stock, shall not be deemed to be a Termination of Employment, for purposes of the timing of distributions under Section 8.1, if the employer to which such Employee is transferred agrees with the Plan Sponsor to accept a transfer of assets from the Plan to its tax-qualified plan in a trust-to-trust transfer meeting the requirements of Code Section 414(l).

1.41“Trust” means the trust established under an agreement between the Primary Sponsor and the Trustee to hold the Fund or any successor agreement.

1.42“Trustee” means the trustee under the Trust.

1.43“Valuation Date” means each regular business day or any other day which the Plan Administrator declares to be a Valuation Date.

1.44“Vesting Service” means each Plan Year during which an Employee has completed no less than 1,000 Hours of Service.  Notwithstanding anything contained herein to the contrary, Vesting Service shall not include:

(a)           In the case of an Employee who completes five consecutive Breaks in Service for purposes of determining the vested portion of his Account which accrued before his Termination Completion Date, all Vesting Service in Plan Years after his Termination Completion Date.

(b)           In the case of an Employee who completes five consecutive Breaks in Service and at that time does not have any vested right to his Account, all Vesting Service before those Breaks in Service commenced.

1.45“Voluntary Contribution” means a non-deductible contribution to the Fund made by the Participant pursuant to Section 3.3.

-12-

1.46“Year of Service” means each successive twelve-month period of employment measured from a Participant’s employment anniversary date during which a Participant has completed no less than 1,000 Hours of Service.  If a Participant ceases to be an Employee and is subsequently reemployed by a Plan Sponsor, such Participant’s “Years of Service” shall not include any periods of service prior to such Participant’s reemployment.  Notwithstanding the foregoing, any individual who was an employee of Morrison Restaurants Inc. immediately prior to the effective date of the distributions by Morrison Restaurants Inc. to its stockholders of all of the outstanding shares of common stock, respectively, of Morrison Fresh Cooking, Inc. and Morrison Health Care, Inc., but who did not continue in the employ of Ruby Tuesday, Inc. immediately after such distributions, shall not be given credit for any Year of Service with Morrison Restaurants Inc. completed on or prior to the effective date of such distributions.

SECTION 2

ELIGIBILITY

2.1General Rule. Each Eligible Employee shall become a Participant as of the first day of the first payroll period coinciding with or next following the later of the date he (a) completes his Eligibility Service or (b) attains age 21.

2.2Current Participants. Each individual who was a Participant on December 31, 2014 shall continue to be a Participant as of January 1, 2015.

2.3Former Employees Who Were Participants. Each former Employee who was a Participant who is reemployed by a Plan Sponsor shall become a Participant as of the date of his reemployment as an Eligible Employee.

2.4Former Employees Who Were not Participants. Each former Employee who completes his Eligibility Service but terminates employment with a Plan Sponsor before becoming a Participant shall become a Participant as of the latest of the date he (a) is reemployed, (b) would have become a Participant if he had not incurred a Termination of Employment, or (c) becomes an Eligible Employee.

2.5Rollover Amount. Solely for the purpose of contributing a Rollover Amount to the Plan, an Eligible Employee who has not yet become a Participant pursuant to any other provision of this Section 2 shall become a Participant as of the date on which the Rollover Amount is contributed to the Plan.

2.6Mergers and Acquisitions. In the event that an individual becomes an Eligible Employee of a Plan Sponsor by reason of (a) an acquisition by the Plan Sponsor of substantially all of the assets of a trade or business or a controlling interest in the ownership interests of another entity; or (b) a merger of the individual’s prior employer with and into the Plan

-13-

Sponsor, then any such individual who becomes an Eligible Employee may become a Participant on any earlier date than otherwise provided hereinabove, in the manner and subject to such conditions, if any, provided in resolutions adopted by the Plan Sponsor.

SECTION 3

CONTRIBUTIONS

3.1      Before-Tax Contributions.

(a)           Deferral Amounts.  The Plan Sponsor shall make a contribution to the Fund on behalf of each Participant who is an Eligible Employee and has elected to defer a portion of his Annual Compensation otherwise payable to him for the Plan Year and to have such portion contributed to the Fund.  Except to the extent permitted under Section 3.1(c), the contribution made by a Plan Sponsor on behalf of a Participant under this Section 3.1(a) shall be in an amount equal to the amount specified in the Participant’s deferral election, but not greater than fifty percent (50%) of the Participant’s Annual Compensation.  Pursuant to Section 4 of Appendix C, the Plan Administrator may further restrict the amount which Highly Compensated Employees may defer under this Section 3.1(a).

(b)           Limit on Deferral Amounts. Except to the extent permitted under Section 3.1(c), Elective Deferrals shall in no event exceed $18,000 (for 2015), as adjusted in future years by the Secretary of the Treasury (the “Code Section 402(g) limit”), in any one taxable year of the Participant.  In the event the amount of Elective Deferrals exceeds Code Section 402(g) limit, as adjusted, in any one taxable year then,

(1)           not later than the immediately following March 1, the Participant may designate to the Plan the portion of the Participant’s Deferral Amounts which consist of excess Elective Deferrals, and

(2)           not later than the immediately following April 15, the Plan may distribute the amount designated to it under Paragraph (1) above, as adjusted in accordance with Code Section 402(g) and applicable Treasury Regulations to reflect income, gain, or loss attributable to it, and reduced by any “Excess Deferral Amounts,” as defined in Appendix C hereto, previously distributed or recharacterized with respect to the Participant for the Plan Year beginning with or within that taxable year.

The payment of the excess Elective Deferrals, as adjusted and reduced, from the Plan shall be made to the Participant without regard to any other provision in the Plan.  In the event that a Participant’s Elective Deferrals exceed the Code Section 402(g) limit, as adjusted, in any one taxable year under the Plan and other plans of the Plan Sponsor and its Affiliates, the Participant shall be deemed to have designated for distribution

-14-

under the Plan the amount of excess Elective Deferrals, as adjusted and reduced, by taking into account only Elective Deferral amounts under the Plan and other plans of the Plan Sponsor and its Affiliates.

(c)           Catch-Up Contributions. A Participant who is eligible to contribute Deferral Amounts to the Plan and who has attained or will attain age fifty (50) on or before the last day of the Plan Year shall be eligible to elect to defer a portion of his Annual Compensation otherwise payable to him for the Plan Year and have such portion contributed to the Fund on his behalf as Catch-Up Contributions in excess of the limits on Deferral Amounts set forth in Section 3.1(b) or any limit otherwise established by the Plan Administrator with respect to Highly Compensated Employees under Section 3.1(a).  In addition, amounts contributed pursuant to Section 3.1(a) or this Section 3.1(c) may be treated as Catch-Up Contributions to the extent such amounts exceed any limit on Deferral Amounts that may be determined pursuant to Section 3 of Appendix C hereto (this limit and the limits in the preceding sentence being collectively referred to as the “Applicable Deferral Limits”).

Catch-Up Contributions made pursuant to this Section 3.1(c) by a Participant shall be in an amount equal to the amount specified in the Participant’s deferral agreement and may be made on a payroll period basis or an annual basis in accordance with the administrative procedures provided by the Plan Administrator, but shall in no event shall the contributions exceed $6,000 (for 2015) in any calendar year, as adjusted in future years by the Secretary of the Treasury (the “Code Section 414(v) limit”).

Contributions made pursuant to this Section 3.1(c) shall not be taken into account for purposes of implementing the limitations set forth in Section 3.1(b) and Appendix A hereto.  The Plan shall not be treated as failing to satisfy the provisions of Appendix B or Appendix C, as applicable, by reason of the making of the Catch-Up Contributions as described in this Section 3.1(c).

The portion of the contribution made by a Plan Sponsor under this Section 3.1(c) that will be treated as Catch-Up Contributions will be determined as of the last day of the Plan Year.  Amounts contributed by a Plan Sponsor pursuant to this Section 3.1(c) or recharacterized pursuant to Section 3 of Appendix C that do not exceed the Applicable Deferral Limits will not be treated as Catch-Up Contributions but will be treated as Deferral Amounts. Amounts contributed pursuant to this Section 3.1(c) or recharacterized pursuant to Section 3 of Appendix C that exceed the Applicable Deferral Limits will be treated as Catch-Up Contributions; provided, however, that the contribution under this Section 3.1(c) or any amounts recharacterized under Section 3 of Appendix C for any Participant shall not be treated as a Catch-Up Contribution to the extent that those amounts and all other Elective Deferrals of the Participant under the Plan and other plans of the Plan Sponsor and its Affiliates for the taxable year exceed the Participant’s Annual Compensation.

-15-

The excess of the amounts treated as Catch-Up Contributions for a Participant under the Plan and other plans of the Plan Sponsor and its Affiliates over the Code Section 414(v) limit and amounts that are not treated as Catch-Up Contributions solely because they exceed the Participant’s Annual Compensation, will be distributed to the Participant in the same manner as Deferral Amounts are distributed pursuant to Section 3.1(b).

(d)           Deferral Elections.  The elections under this Section 3.1 must be made before the Annual Compensation is payable and may only be made in such manner and subject to such rules and limitations as the Plan Administrator may prescribe and shall specify the percentage or dollar amount, as applicable, of Annual Compensation that the Participant desires to defer pursuant to Section 3.1(a) and/or 3.1(c) and to have contributed to the Fund.  Once a Participant has made an election for a Plan Year, the Participant may revoke or modify his election to increase or reduce the rate of future deferrals, as provided in the administrative procedures established by the Plan Administrator.

3.2       Matching Contributions.  Effective January 1, 2013:

(a)           Each Plan Sponsor proposes to make matching contributions to the Fund in an amount equal to a discretionary percentage, to be determined by the Primary Sponsor, of a Participant’s Annual Compensation deferred by the Participant pursuant to Section 3.1(a), not to exceed the first six percent (6%) of such Annual Compensation, which matching contributions may vary based on classes of Participants and on the percentage of a Participant’s Deferral Amount being matched; provided that such contributions will be nondiscriminatory in accordance with the regulations under Code Section 401(a) and will not discriminate in favor of Highly Compensated Employees.   

(b)           In the case of a Participant who is identified as a Highly Compensated Employee during a Plan Year, the Plan Sponsor proposes to make a matching contribution on behalf of such Highly Compensated Employee, in liew of any matching contribution on behalf of such Highly Compensated Employee under Section 3.2(a), in an amount equal to the lowest percentage of a Participant's Deferral Amount for which a matching contribution under Section 3.2(a) is being made for an Participant.

(c)           For purposes of determining the amount of matching contributions to be credited to a Participant’s Company Matching Account, all or a portion of a Participant’s years of employment with a predecessor employer may be counted if the Participant became an Eligible Employee of a Plan Sponsor by reason of (1) an acquisition by the Plan Sponsor of the assets of a trade or business or a controlling interest in the ownership interests of another entity; or (2) a merger of the individual’s prior employer with and into the Plan Sponsor or an Affiliate; in the manner and subject to such conditions, if any, provided in resolutions adopted by the Plan Sponsor.

-16-

(d)           With respect to contributions under Subsections (a) and (b), the Primary Sponsor may, in its discretion: (1) make such contributions as of the last day of any time period specified by the Primary Sponsor, (which period may be no shorter than a payroll period and no longer than a Plan Year); and (2) require that a Participant be an Eligible Employee as of the last day of such period to be eligible to receive any such contribution.

3.3Voluntary Contributions. Subject to such rules and limitations as the Plan Administrator may from time to time prescribe, each Participant who is an Eligible Employee may contribute as a Voluntary Contribution to the Fund an amount of his Annual

Compensation not in excess of ten percent (10%) of the Participant’s Annual Compensation for the Plan Year.  Voluntary Contributions shall be made to the Fund through regular payroll deductions or in such other manner as shall be agreed upon by each Participant and the Plan Administrator.  The Plan Administrator may, at any time, suspend the making of any further Voluntary Contributions.  The Plan Administrator shall revoke as soon as practicable any election in effect pursuant to this Section 3.3 with respect to a Participant who is identified as a Highly Compensated Employee with respect to the Plan Year.

3.4Rollover Amounts. Any Eligible Employee may, with the consent of the Plan Administrator and subject to such rules and conditions as the Plan Administrator may prescribe, transfer a Rollover Amount to the Fund (which may include without limitation prohibitions against transferring certain categories of Rollover Amounts to the Plan); provided, however, that the Plan Administrator shall not administer this provision in a manner which is discriminatory in favor of Highly Compensated Employees.  Rollover amounts may not include amounts that would not be includable in the Employee’s gross income if such amounts were not rolled over.

3.5Tax-Deductible Limit. Contributions may be made only in cash or other property which is acceptable to the Trustee.  In no event will the sum of contributions under Plan Sections 3.1 and 3.2 exceed the deductible limits under Code Section 404.

3.6Military Service Credit. Notwithstanding any provision of the Plan to the contrary, contributions, benefits and service credit with respect to qualified military service will be provided in accordance with Section 414(u) of the Code.

SECTION 4

ALLOCATIONS

4.1Allocation of Contributions. As soon as reasonably practicable following the date of withholding by the Plan Sponsor, if applicable, and receipt by the Trustee, Plan Sponsor contributions made on behalf of each Participant under Plan Sections 3.1 and 3.2, and Voluntary Contributions and Rollover Amounts contributed by the Participant, shall be allocated to the Employee Deferred Account, Company Matching Account, Voluntary Contribution Account and Rollover Account, respectively, of the Participant on behalf of whom the contributions were made.

-17-

4.2Allocation of Income and Loss. As of each Valuation Date, the Trustee shall allocate the net income or net loss of each Investment Fund to each Account in the proportion that the value of the Account as of the Valuation Date bears to the value of all Accounts invested in that Investment Fund as of the Valuation Date.

4.3Allocation of Expenses.  Plan expenses that are payable from the Trust that are not paid by, or are reimbursable to, the Plan Sponsor may be allocated to Accounts in any manner (whether or not pro rata) permitted by ERISA and the Code and the rules and regulations promulgated thereunder.

SECTION 5

INVESTMENT FUNDS AND INVESTMENTS OF TRUST ASSETS

5.1Participant Direction of Investments. Until such time as the Plan Administrator may direct otherwise, each Participant may direct the Plan Administrator to invest contributions to his Account in one or more Investment Funds as the Participant shall designate by providing notice to the Plan Administrator according to the procedures established by the Plan Administrator for that purpose.

(a)     All investment directions of contributions shall be made in such multiples as prescribed by the Plan Administrator. Participants may change the investment of contribution to their Accounts in accordance with the procedures established by the Plan Administrator, but in no event less frequently than once per calendar quarter. New investment directions shall be effective as of the date that such directions are processed by the Plan Administrator in accordance with the procedures established for such purpose.

(b)     An investment direction, once given, shall be deemed to be a continuing direction until changed as otherwise provided herein. If no direction is effective for the date a contribution is to be made, all contributions which are to be made for such date shall be invested in such Investment Fund as the Plan Administrator, the Investment Manager, the Investment Committee, or the Trustee, as applicable, may determine. To the extent permissible by law, no Fiduciary shall be liable for any loss, which results from a Participant’s exercise or failure to exercise his investment discretion.

5.2Directions to Transfer Between Individual Funds. A Participant and each Beneficiary of a deceased Participant may elect according to the procedures established by the Plan Administrator, to transfer, in such multiples as the Plan Administrator may prescribe, portions of his Account between Investment Funds.  A Participant and each Beneficiary of a deceased Participant shall have the right to make an election under this Section 5.2 no less frequently than once per calendar quarter.  An election under this Section 5.2 shall be effective

-18-

 as of the date that such directions are processed by the Plan Administrator in accordance with the procedures established for such purpose.

5.3Application of Elections. A Participant or Beneficiary of a deceased Participant who makes an election pursuant to Plan Section 5.1 or Plan Section 5.2 may apply the new investment direction to his current Account, all future contributions, or both his current Account and all future contributions, as applicable, except to the extent the Plan Administrator may otherwise prescribe.

5.4Company Stock Fund.  One of the Investment Funds that shall be maintained is a Company Stock fund; provided that the Plan Administrator may impose any restrictions on investment or reinvestment in the Company Stock fund as it determines are appropriate.

5.5Loan Fund. A “Loan Fund” shall be established by the Trustee on behalf of each Participant for whom a loan is made pursuant to Plan Section 6. The Loan Fund shall be credited with the amount of any loan made by the Plan to the Participant and shall be debited with all principal and interest repayments of any such loans.  Under rules established by the Plan Administrator, a Participant’s interest in the Investment Funds shall be debited by the amount credited to the Participant’s Loan Fund.  All principal and interest repayments debited to the Loan Fund shall be invested as contributions to the Participant’s Account pursuant to Plan Section 5.1.  Each Loan Fund shall be invested in a note or notes made by the Participant evidencing the promised repayment of monies loaned to the Participant from the Fund.

5.6Qualified Default Investment Alternative.  The Plan Administrator may establish a qualified default investment alternative.  A “qualified default investment alternative” shall mean a qualified default investment alternative as defined in regulations issued by the Department of Labor pursuant to ERISA Section 404(c)(5), or any successor thereto, that is designated by the Plan Administrator.  If all or a portion of the Account of a Participant or Beneficiary who fails to make an affirmative investment election as to such portion of the Participant’s Account is to be invested in the qualified default investment alternative, the Plan Administrator shall provide to such Participant or Beneficiary a notice explaining the Participant’s or Beneficiary’s right to designate how contributions and earnings will be invested and explaining how, in the absence of any investment election, such contributions will be invested and give the Participant or Beneficiary a reasonable period of time after receipt of such notice to make such designation, all in accordance with regulations issued by the U.S. Department of Labor pursuant to ERISA Section 404(c)(5) and shall provide such other information to the Participant or Beneficiary as may be required by such regulations.

SECTION 6

PLAN LOANS

6.1Eligible Individuals. Subject to the provisions of the Plan and the Trust, each Participant who is an Employee shall have the right, subject to prior approval by the Plan

-19-

Administrator, to borrow from the Fund.  In addition, each “party in interest,” as defined in ERISA Section 3(14), who is (a) a Participant but no longer an Employee, (b) the Beneficiary of a deceased Participant, or (c) an alternate payee of a Participant pursuant to the provisions of a “qualified domestic relations order,” as defined in Code Section 414(p), shall also have the right, subject to prior approval by the Plan Administrator, to borrow from the Fund; provided, however, that loans to such parties in interest may not discriminate in favor of Highly Compensated Employees.

6.2Application. In order to apply for a loan, a borrower must complete and submit to the Plan Administrator documents or information required by the Plan Administrator for this purpose.

6.3Equivalent Basis. Loans shall be available to all eligible borrowers on a reasonably equivalent basis which may take into account the borrower’s creditworthiness, ability to repay, and ability to provide adequate security.  Loans shall not be made available to Highly Compensated Employees, officers or shareholders of a Plan Sponsor in an amount greater than the amount made available to other borrowers.  This provision shall be deemed to be satisfied if all borrowers have the right to borrow the same percentage of their interest in the Participant’s vested Account, notwithstanding that the dollar amount of such loans may differ as a result of differing values of Participants’ vested Accounts.

6.4Interest Rate. Each loan shall bear a “reasonable rate of interest” and provide that the loan be amortized in substantially level payments, made no less frequently than quarterly, over a specified period of time.  A “reasonable rate of interest” shall be that rate that provides the Plan with a return commensurate with the interest rates charged by persons in the business of lending money for loans which would be made under similar circumstances.  Notwithstanding the foregoing, to the extent that any loan interest rate is subject to the provisions of the Servicemembers Civil Relief Act of 2003, it shall not exceed six percent (6%) per annum.

6.5Security. Each loan shall be adequately secured, with the security for the outstanding balance of all loans to the borrower to consist of one-half (½) of the borrower’s interest in the Participant’s vested Account, or such other security as the Plan Administrator deems acceptable.  No portion of the Participant’s Employee Deferred Account shall be used as security for any loan hereunder unless and until such time as the loan amount exceeds the value of the borrower’s interest in the Participant’s vested amounts in all other Accounts.

6.6Loan Limit. Each loan, when added to the outstanding balance of all other loans to the borrower from all retirement plans of the Plan Sponsor and its Affiliates which are qualified under Code Section 401, shall not exceed the lesser of:

(a)     $50,000, reduced by the excess, if any, of

-20-

 (1)      the highest outstanding balance of loans made to the borrower from all retirement plans qualified under Code Section 401 of the Plan Sponsor and its Affiliates during the one (1) year period immediately preceding the day prior to the date on which such loan was made, over

 (2)      the outstanding balance of loans made to the borrower from all retirement plans qualified under Code Section 401 of the Plan Sponsor and its Affiliates on the date on which such loan was made, or

(b)      one-half (½) of the value of the borrower’s interest in the vested Account attributable to the Participant’s Account.

For purposes of this Section, the value of the vested Account attributable to a Participant’s Account shall be established as of the latest preceding Valuation Date, or any later date on which an available valuation was made, and shall be adjusted for any distributions or contributions made through the date of the origination of the loan.

6.7Loan Term. Each loan, by its terms, shall be repaid within five (5) years, except that any loan which is used to acquire any dwelling unit which within a reasonable time is to be used (determined at the time the loan is made) as the principal residence of the borrower may, by its terms, be repaid within a longer period of time.

6.8Minimum Amount. The Plan Administrator may impose a minimum loan amount.

6.9Maximum Number of Loans. The Plan Administrator may limit the number of loans that a borrower may have existing under the Plan at any one time.

6.10    Default. The entire unpaid principal sum and accrued interest shall, at the option of the Plan Administrator, become due and payable if:

(a)      a borrower fails to make any loan payment when due (including the expiration of any applicable grace period);

(b)      a borrower ceases to be a “party in interest,” as defined in ERISA Section 3(14);

(c)      the vested Account held as security under the Plan for the borrower will, as a result of an impending distribution or withdrawal, be reduced to an amount less than the amount of all unpaid principal and accrued interest then outstanding under the loan; or

(d)      a borrower makes any untrue representations or warranties in connection with the obtaining of the loan.

-21-

In that event, the Plan Administrator may take such steps as it deems necessary to preserve the assets of the Plan, including, but not limited to, the following: (1) direct the Trustee to deduct the unpaid principal sum, accrued interest, and any other applicable charge under the note evidencing the loan from any benefits that may become payable out of the Plan to the borrower, (2) direct the Plan Sponsor to deduct and transfer to the Trustee the unpaid principal balance, accrued interest, and any other applicable charge under the note evidencing the loan from any amounts owed by the Plan Sponsor to the borrower, or (3) liquidate the security given by the borrower, other than amounts attributable to a Participant’s Employee Deferred Account, and deduct from the proceeds the unpaid principal balance, accrued interest, and any other applicable charge under the note evidencing the loan.  If any part of the indebtedness under the note evidencing the loan is collected by law or through an attorney, the borrower shall be liable for attorneys’ fees in an amount equal to ten percent of the amount then due and all costs of collection.  Notwithstanding the foregoing, a loan may be satisfied upon a Participant’s termination of employment by distributing the note evidencing the debt as part of an Eligible Rollover Distribution; provided, however, that the Trustee, custodian or administrator for the Eligible Retirement Plan indicates its willingness to accept such property.

6.11  Regulations and Plan Loan Program. Each loan shall be made only in accordance with regulations and rulings of the Internal Revenue Service and the Department of Labor.  The Plan Administrator shall be authorized to administer the loan program of this Section and shall act in his sole discretion to ascertain whether the requirements of such regulations and rulings and this Section have been met.

SECTION 7

IN-SERVICE WITHDRAWALS

7.1Hardship Withdrawals.  The Trustee shall, upon the direction of the Plan Administrator, withdraw all or a portion of a Participant’s Employee Deferred Account consisting of Deferral Amounts (but not earnings thereon), including Catch-Up Contributions, prior to the time such accounts are otherwise distributable in accordance with the other provisions of the Plan; provided, however, that any such withdrawal shall be made only if the Participant is an Employee and demonstrates that he is suffering from “hardship” as determined herein.  For purposes of this Section, a withdrawal will be deemed to be on account of hardship if the withdrawal is on account of:

     (a)expenses for (or necessary to obtain) medical care that would be deductible by the Participant under Code Section 213(d) (determined without regard to whether the expenses exceed 7.5% of adjusted gross income);

     (b)purchase (excluding mortgage payments) of a principal residence for the Participant;

-22-

     (c)payment of tuition, related educational fees, and room and board expenses, for up to the next twelve (12) months of post-secondary education for the Participant, or for his spouse, children or dependents (as defined in Code Section 152 and, for taxable years beginning on or after January 1, 2005, without regard to Code Sections 152(b)(1), (b)(2) and (d)(1)(B));

     (d)payments necessary to prevent the eviction of the Participant from his principal residence or foreclosure on the mortgage on the Participant’s principal residence;

     (e)payments for burial or funeral expenses for the Participant’s deceased parent, spouse, children or dependents (as defined in Code Section 152 and, for taxable years beginning or after January 1, 2005, without regard to Code Section 152(d)(1)(B));

     (f)expenses for the repair of damage to the Participant’s principal residence that would qualify for the casualty deduction under Code Section 165 (determined without regard to whether the loss exceeds 10% of adjusted gross income); or

     (g)any other contingency determined by the Internal Revenue Service to constitute an “immediate and heavy financial need” within the meaning of Treasury Regulations Section 1.401(k)-l(d).

7.2Additional Hardship Withdrawal Requirements.  In addition to the requirements set forth in Plan Section 7.1,any withdrawal pursuant to Plan Section 7.1 shall not be in excess of the amount necessary to satisfy the need determined under Section 7.1and shall also be subject to the requirements of either Subsection (a) or (b) of this Section.

     (a)       (1)           The Participant shall first obtain all withdrawals, other than hardship withdrawals, and all nontaxable loans currently available under all plans maintained by the Plan Sponsor; and

     (2)           the Plan Sponsor shall not permit Elective Deferrals, including catch-up contributions as described in Code Section 414(v), or after-tax employee contributions to be made to the Plan or any other plan maintained by the Plan Sponsor, for a period of six (6) months after the Participant receives the withdrawal pursuant to this Section.

     (b)       the Plan Administrator relies on the Participant’s certification by execution of a form provided by the Plan Administrator, unless the Plan Administrator has actual knowledge to the contrary, that the need determined under Plan Section 7.1 cannot be relieved

-23-

     (1)            through reimbursement or compensation by insurance or otherwise,

     (2)            by reasonable liquidation of the assets of the Participant, his spouse and minor children, to the extent that the liquidation would not itself cause an immediate and heavy financial need and to the extent that the assets of the spouse and minor children are reasonably available to the Participant,

     (3)           by cessation of Elective Deferrals, or

     (4)            by other distributions or nontaxable (at the time of the distribution) loans from plans maintained by the Plan Sponsor or any other employer, or by borrowing from commercial sources on reasonable commercial terms.

Such withdrawals shall be made only in accordance with such other rules, policies, procedures, restrictions, and conditions as the Plan Administrator may from time to time adopt.  Any determination of the existence of hardship and the amount to be withdrawn on account thereof shall be made by the Plan Administrator (or such other person as may be required to make such decisions) in accordance with the foregoing rules as applied in a uniform and nondiscriminatory manner; provided that, unless the Participant requests otherwise, any such withdrawal shall include the amount necessary to pay any federal, state and local income taxes and penalties reasonably anticipated to result from the withdrawal.  A withdrawal under this Section shall be made in a lump sum to the Participant.

7.3Hardship Withdrawals on Account of Beneficiary Hardship.  To the extent provided in regulations issued by the Secretary of the Treasury, if an event would constitute “hardship” under Sections 7.1 and 7.2 if such event occurred with respect to a Participant’s spouse or dependent (as defined in Code Section 152), such event shall constitute “hardship” if it occurs with respect to a person who is a designated, primary Beneficiary with respect to the Participant.

7.4Withdrawal of Rollover Amounts and Voluntary Contributions. Subject to the rules and conditions as the Plan Administrator may prescribe, by request, a Participant may receive a distribution as soon as administratively practicable of all or a portion of the balance of his Rollover Account and Voluntary Contribution Account.  Any request for a distribution under this Section shall be made on the forms and in the manner prescribed by the Plan Administrator and, if such request is granted, such distribution shall be made in a lump sum.

7.5Special Rule for Distributions During Uniformed Services.  A Participant who is performing services in the uniformed services (as defined in Chapter 43 of Title 38 of the United States Code) while on active duty for a period of more than thirty (30) days shall be treated as having been severed from employment during such period for purposes of Code Section

-24-

 401(k)(2)(B)(i)(I) and may elected to receive a distribution of all or a portion of his Employee Deferred Account, including Catch-Up Contributions.  Any request for a distribution under this Section must be made in the manner prescribed by the Plan Administrator and in accordance with rules and conditions as the Plan Administrator may from time to time adopt.  If a Participant elects a distribution pursuant to this Section, the Participant may not make Elective Deferrals, including Catch-Up Contributions, or Voluntary Contributions to the Plan or any other plan maintained by the Plan Sponsor during the six-month period beginning on the date of the distribution.

7.6Age 59½ Distributions.  Subject to the rules and conditions the Plan Administrator may prescribe that are not inconsistent with this Section, a Participant who has attained the age of at least 59½ may elect to receive a distribution of all or a portion of his vested Account.  A Participant may only receive a distribution under this Section once per Plan Year.

SECTION 8

PAYMENT OF BENEFITS ON TERMINATION OF EMPLOYMENT

8.1           Time and Form of Payment.

(a)           In the event of a Termination of Employment, a Participant whose vested Account exceeds $5,000 may request that payment of his vested Account be made at any time after the Participant’s Termination of Employment occurs.Payment of a Participant’s Account shall be in the form elected by such Participant under Plan Section 8.1(b).  All payments will be made as soon as administratively feasible following a Participant’s request.  No distribution of the Participant’s Account will be made without his consent prior to his Required Beginning Date or death.

(b)Payment of a Participant’s vested Account may be made in the form of a lump-sum payment in cash; provided, however, a Participant’s interest in the Investment Fund investing primarily in shares of Company Stock may be distributed in the form of whole shares of Company Stock if the Participant so elects, in the manner prescribed by the Plan Administrator.  Notwithstanding the foregoing, with respect to distributions made before January 1, 2010, a distribution in whole shares of Company Stock may be made only if the Participant’s interest in the Investment Fund investing primarily in shares of Company Stock equals or exceeds the value of hundred (100) shares of Company Stock.

(c)In the event of a Termination of Employment, a Participant whose vested Account is $5,000 or less shall have his vested Account distributed as soon as administratively feasible thereafter, as follows:

(1)           for a Participant whose vested Account is $1,000 or less, such Participant shall have his Account balance distributed in a lump sum payment to the Participant; and

-25-

(2)           for a Participant whose vested Account is greater than $1,000, but $5,000 or less, such Participant shall have his Account balance distributed to an individual retirement plan of a trustee or issuer designated by the Plan Administrator, unless the Participant elects in writing to have the payment made directly to the Participant or to another individual retirement plan.  The Plan Administrator shall notify the Participant in writing that the distribution may be transferred by the Participant to another individual retirement plan.

8.2           Valuation of Account.  The balance of a Participant’s Account which is to be paid under this Section 8 shall be determined as of the Valuation Date coinciding with or immediately preceding the date the Account is valued for imminent payout purposes pursuant to normal administrative procedures and shall be increased by any contributions allocated to the Participant’s Account after that Valuation Date and reduced by any distributions made from the Participant’s Account after that Valuation Date.

8.3           Changes to Vesting Schedule.  If a Plan amendment directly or indirectly changes the vesting schedule, the vesting percentage for each Participant in his Account accumulated to the date when the amendment is adopted shall not be reduced as a result of the amendment.  In addition, any Participant with at least three (3) years of Vesting Service may irrevocably elect to remain under the pre-amendment vesting schedule with respect to all of his benefits accrued both before and after the amendment, unless after the amendment, any such Participant’s nonforfeitable percentage at any time cannot be less than the Participant’s nonforfeitable percentage determined without regard to such amendment.

8.4Suspension on Reemployment.  If a Participant has a Termination of Employment and is subsequently reemployed by a Plan Sponsor or an Affiliate prior to receiving a distribution of his Account under the Plan, such Participant shall not be entitled to a distribution under this Section while he is an Employee.

8.5           Vesting.  That portion of a Participant’s Account in which he is vested at any given time shall be:

(a)his Employee Deferred Account, Voluntary Contribution Account, Rollover Account, and his Pre-2007 Company Matching Subaccount which shall be fully vested and nonforfeitable at all times; and

(b)           his Post-2006 Company Matching Subaccount (other than the portion of his Company Matching Account attributable to Qualified Matching Contributions or Qualified Nonelective Contributions, both as defined in Appendix C, if any, which shall both be fully vested and nonforfeitable when made) computed according to the following vesting schedule:

-26-

Full Years of	Percentage
Vesting Service	Vested
Less than 3	0%
3 or more	100%

(c)           Notwithstanding anything to the contrary in Subsection (b), any Employee who was eligible to participate in (whether or not actually contributing to) the RTI Franchise Management Association, Inc. 401(k) Plan (the “Franchise Plan”) who was less than 100% vested prior to the transfer of accounts from the Franchise Plan to this Plan (the “Franchise Plan Transfer”) (disregarding any acceleration of vesting, if any, approved by the RTI Franchise Management Association, Inc. in connection with the Franchise Plan Transfer) shall be vested in his Post-2006 Company Matching Subaccount attributable to Plan Sponsor contributions as follows:

Aggregated years of service under the
Franchise Plan and the Plan	Percentage Vested
Less than 1	0%
1	20%
2	40%
3 or more	100%

Any Participant in the Franchise Plan who was fully-vested under the Franchise Plan prior to the Franchise Plan Transfer (disregarding any acceleration of vesting, if any, approved by the RTI Franchise Management Association, Inc. in connection with the Franchise Plan Transfer) shall be fully-vested in his Post-2006 Company Matching Subaccount.  If an acceleration of vesting was approved by the RTI Franchise Management Association, Inc. in connection with the Franchise Plan Transfer, amounts transferred in connection with the Franchise Plan Transfer shall be vested to the extent of such acceleration.

8.6           Cash-out/Buyback.

(a)           The nonvested portion of the Account of a Participant who has had a Termination of Employment shall be forfeited as of the earlier of the date the Participant receives a distribution of the vested portion of his Account or the Participant’s Termination Completion Date. For such purposes, a Participant who has had a Termination of Employment and who is not vested in any portion of his Account shall be deemed to have received a distribution of his Account.

(b)           If a Participant who has received (or has been deemed to have received) a distribution of the vested portion of his Account is reemployed by a Plan Sponsor or an Affiliate prior to his Termination Completion Date and (1) if the Participant’s Account was partially vested, and the Participant repays to the Fund no later than the fifth anniversary of the Participant’s reemployment by the Plan Sponsor or an Affiliate all of

-27-

that portion of his vested Account which was paid to him or (2) if the Participant’s Account was not vested upon his Termination of Employment, then any portion of his Account which was forfeited shall be restored effective on the Valuation Date coinciding with or next following the repayment or the Participant’s reemployment, respectively.  The restoration on any Valuation Date of the forfeited portion of the Account of a Participant pursuant to the preceding sentence shall be made first from forfeitures available for allocation on that Valuation Date, to the extent available, and secondly from contributions by the Plan Sponsor.  Only after restorations have been made shall the remaining net income be available for allocation under Section 4.

SECTION 9

PAYMENT OF BENEFITS ON RETIREMENT

9.1           Time and Form of Payment.

(a)           A retired Participant whose Account exceeds $5,000 may request that payment of his Account be made at any time after the Participant attains a Retirement Date.  All payments will be made as soon as administratively feasible following a Participant’s request.  No distribution of the Participant’s Account will be made without his consent prior to his Required Beginning Date or death.

(b)A retired Participant whose Account is $5,000 or less shall have his vested Account distributed as soon as administratively feasible after the Participant attains a Retirement Date.

(c)           (1)           Payment of a Participant’s vested Account under subsection (a) or (b) above may be made in the form of a lump-sum payment in cash; provided, however, a Participant’s interest in the Investment Fund investing primarily in shares of Company Stock may be distributed in the form of whole shares of Company Stock if the Participant so elects, in the manner prescribed by the Plan Administrator.  Notwithstanding the foregoing, with respect to distributions made before January 1, 2010, a distribution in whole shares of Company Stock may be made only if the Participant’s interest in the Investment Fund investing primarily in shares of Company Stock equals or exceeds the value of hundred (100) shares of Company Stock

(2)           In the event a Participant attains a Retirement Date on or after attaining Normal Retirement Age, distribution of such Participant’s vested Account balance under subsection (b) above shall be made in the form of a lump sum payment to the Participant.

-28-

(3)           In the event a Participant attains a Retirement Date prior to attaining Normal Retirement Age, distribution of such Participant’s vested Account under subsection (b) above shall be made as follows:

(A)           for a Participant whose vested Account is $1,000 or less, such Participant shall have his Account balance distributed in a lump sum payment to the Participant; and

(B)           for a Participant whose vested Account is greater than $1,000, but $5,000 or less, such Participant shall have his Account balance paid to an individual retirement plan of a trustee or issuer designated by the Plan Administrator, unless the Participant elects in writing to have the payment made directly to the Participant or to another individual retirement plan.  The Plan Administrator shall notify the Participant in writing that the distribution may be transferred by the Participant to another individual retirement plan.

9.2           Vesting; Valuation of Account.  The Account of a Participant who has attained a Retirement Date or has attained Normal Retirement Age shall be fully vested and nonforfeitable.  The balance of a Participant’s Account which is to be paid under this Section 9 shall be determined as of the Valuation Date coinciding with or immediately preceding the date the Account is valued for imminent payout purposes pursuant to normal administrative procedures and shall be increased by any contributions allocated to the Participant’s Account after that Valuation Date and reduced by any distributions made from the Participant’s Account after that Valuation Date.

SECTION 10

DEATH BENEFITS

10.1           Eligibility for Payment.  If a Participant dies before receiving a distribution of his vested Account, his Beneficiary shall receive the Participant’s vested Account in one lump sum as soon as administratively feasible following the death of the Participant or, if the Beneficiary so elects, at any later date permitted under Section 11.

10.2           Vesting.  The portion of the Participant’s Account that is vested shall be determined under Section 8 or 9, as applicable.

10.3           Death Benefits under USERRA.  In case of a Participant who dies while performing “qualified military service” (as defined in Code Section 414(u)(5)), the survivors of the Participant are entitled to any additional benefits (other than benefit accruals relating to the period of qualified military service) provided under the Plan, if any, had the Participant resumed and then terminated employment on account of death.

-29-

SECTION 11

GENERAL RULES ON DISTRIBUTIONS

11.1           Adjustments for Income.Accounts shall not be adjusted for earnings or losses incurred after the Valuation Date with respect to which the Account is valued for imminent payout purposes.  Prior to distribution of an Account, the Account shall be reduced by the amount necessary to satisfy the unpaid principal, accrued interest, and penalties on any loan made to the Participant.

11.2           Direct Rollovers.

(a)           Notwithstanding any provisions of the Plan to the contrary that would otherwise limit a Distributee’s election under this Section 11, a Distributee may elect, at the time and in the manner prescribed by the Plan Administrator, to have any portion of a distribution pursuant to this Section which is an Eligible Rollover Distribution paid directly to an Eligible Retirement Plan specified by the Distributee in a Direct Rollover so long as all Eligible Rollover Distributions to a Distributee for a calendar year total or are expected to total at least $200 and, in the case of a Distributee who elects to directly receive a portion of an Eligible Rollover Distribution and directly roll the balance over to an Eligible Retirement Plan, the portion that is to be directly rolled over totals at least $500.  If the Eligible Rollover Distribution is one to which Code Sections 401(a)(11) and 417 do not apply, such Eligible Rollover Distribution may commence less than thirty (30) days after the notice required under Treasury Regulations Section 1.411(a)-11(c) is given, provided that:

(1)        the Plan Administrator clearly informs the Distributee that the Distributee has a right to a period of at least thirty (30) days after receiving the notice to consider the decision of whether or not to elect a distribution (and, if applicable, a particular distribution option), and

(2)        the Distributee, after receiving the notice, affirmatively elects a distribution.

(b)           Notwithstanding the foregoing, if the Distributee is a non-spouse Beneficiary of a deceased Participant and a direct trustee-to-trustee transfer is made to an individual retirement account described in Code Section 408(a) or an individual retirement annuity described in Code Section 409(b) (other than an endowment contract):

(1)  the transfer shall be treated as an Eligible Rollover Distribution;

-30-

(2)  the individual retirement plan shall be treated as an inherited individual retirement account or individual retirement annuity (within the meaning of Code Section 408(d)(3)(C)); and

(3)  Code Section 401(a)(9)(B) (other than clause (iv) thereof) shall apply to such plan.

11.3           Required Minimum Distributions. Notwithstanding any other provisions of the Plan, distributions will be made in accordance with Code Section 401(a)(9) and the regulations issued thereunder, including the incidental benefit requirements, administered in accordance with the requirements of Appendix D hereto.

SECTION 12

ADMINISTRATION OF THE PLAN

12.1           Trust Agreement.  The Primary Sponsor shall establish a Trust with the Trustee designated by the Board of Directors for the management of the Fund, which Trust shall form a part of the Plan and is incorporated herein by reference.

12.2           Operation of the Plan Administrator.  The Primary Sponsor shall appoint a Plan Administrator.  If an organization is appointed to serve as the Plan Administrator, then the Plan Administrator may designate in writing one or more persons who may act on behalf of the Plan Administrator.  If more than one person is so designated with respect to the same administrative function, a majority of such persons shall constitute a quorum for the transaction of business and shall have the full power to act on behalf of the Plan Administrator.  The Primary Sponsor shall have the right to remove the Plan Administrator at any time by notice in writing.  The Plan Administrator may resign at any time by written notice of resignation to the Trustee and the Primary Sponsor.  Upon removal or resignation of the Plan Administrator, or in the event of the dissolution of the Plan Administrator, the Primary Sponsor shall appoint a successor.

12.3           Fiduciary Responsibility.

  (a)        The Plan Administrator, as a Named Fiduciary, may allocate its fiduciary responsibilities among Fiduciaries other than the Trustee, designated in writing by the Plan Administrator and may designate in writing persons other than the Trustee to carry out its fiduciary responsibilities under the Plan.  The Plan Administrator may remove any person designated to carry out its fiduciary responsibilities under the Plan by notice in writing to such person.

  (b)        The Plan Administrator and each other Fiduciary may employ persons to perform services and to render advice with regard to any of the Fiduciary’s

-31-

 responsibilities under the Plan.  Charges for all such services performed and advice rendered may be paid by the Fund to the extent permitted by ERISA.

  (c)         Each Plan Sponsor shall indemnify and hold harmless each person constituting the Plan Administrator or the Investment Committee, except those individuals who are not a Plan Sponsor or a director, officer or employee of a Plan Sponsor, if any, from and against any and all claims, losses, costs, expenses (including, without limitation, attorney’s fees and court costs), damages, actions or causes of action arising from, on account of or in connection with the performance by such person of his duties in such capacity, other than such of the foregoing arising from, on account of or in connection with the willful neglect or willful misconduct of such person.

12.4           Duties of the Plan Administrator.

(a)   The Plan Administrator shall advise the Trustee with respect to all payments under the terms of the Plan and shall direct the Trustee in writing to make such payments from the Fund; provided, however, in no event shall the Trustee be required to make such payments if the Trustee has actual knowledge that such payments are contrary to the terms of the Plan and the Trust.

(b)   The Plan Administrator shall from time to time establish rules, not contrary to the provisions of the Plan and the Trust, for the administration of the Plan and the transaction of its business.  All elections and designations under the Plan by a Participant or Beneficiary shall be made on forms prescribed by the Plan Administrator.  The Plan Administrator shall have discretionary authority to construe the terms of the Plan and shall determine all questions arising in the administration, interpretation and application of the Plan, including, but not limited to, those concerning eligibility for benefits and it shall not act so as to discriminate in favor of any person.  All determinations of the Plan Administrator shall be conclusive and binding on all Employees, Participants, Beneficiaries and Fiduciaries, subject to the provisions of the Plan and the Trust and subject to applicable law.

(c)   The Plan Administrator shall furnish Participants and Beneficiaries with all disclosures now or hereafter required by ERISA or the Code.  The Plan Administrator shall file, as required, the various reports and disclosures concerning the Plan and its operations as required by ERISA and by the Code, and shall be solely responsible for establishing and maintaining all records of the Plan and the Trust.

(d)   The statement of specific duties for a Plan Administrator in this Section is not in derogation of any other duties which a Plan Administrator has under the provisions of the Plan or the Trust or under applicable law.

-32-

12.5           Investment Manager.  The Primary Sponsor may, by action in writing provided to the Trustee, appoint an Investment Manager.  Any Investment Manager may be removed in the same manner in which appointed, and in the event of any removal, the Investment Manager shall, as soon as possible, but in no event more than thirty (30) days after notice of removal, turn over all assets managed by it to the Trustee or to any successor Investment Manager appointed, and shall make a full accounting to the Primary Sponsor with respect to all assets managed by it since its appointment as an Investment Manager.

12.6           Investment Committee.  The Primary Sponsor may, by action in writing certified by notice to the Trustee, appoint an Investment Committee.  The Primary Sponsor shall have the right to remove any person on the Investment Committee at any time by notice in writing to such person.  A person on the Investment Committee may resign at any time by written notice of resignation to the Primary Sponsor.  Upon such removal or resignation, or in the event of the death of a person on the Investment Committee, the Primary Sponsor may appoint a successor.  Until a successor has been appointed, the remaining persons on the Investment Committee may continue to act as the Investment Committee.

12.7           Action by a Plan Sponsor.  Any action to be taken by a Plan Sponsor shall be taken by persons duly authorized by the Plan Sponsor, except, subject to Section 16.1, amendments to, termination of, or termination of a Plan Sponsor participation in, the Plan or the Trust, or the determination of the basis of any Plan Sponsor contributions, may be made only to the extent authorized by written resolution or written direction of the board of directors or appropriate governing body. Nothing herein shall be construed to prohibit the board of directors or appropriate governing body from delegating to any officer or other appropriate person of a Plan Sponsor the authority to take any such actions as may be specified in such resolution or written direction.

12.8           Appeals Fiduciary.  The Primary Sponsor shall appoint an Appeals Fiduciary.  The Appeals Fiduciary shall be required to review claims for benefits payable due to a Participant’s Disability that are initially denied by the Plan Administrator and for which the claimant requests a full and fair review pursuant to Section 13.4.  The Appeals Fiduciary may not be the individual who made the initial adverse determination with respect to any claim he reviews and may not be a subordinate of any individual who made the initial adverse determination.  The Appeals Fiduciary may be removed in the same manner in which appointed or may resign at any time by written notice of resignation to the Primary Sponsor.  Upon such removal or resignation, the Primary Sponsor shall appoint a successor.

12.9           Corrective Action.  Notwithstanding any provision of the Plan to the contrary, the Plan Sponsor may make corrective contributions, allocations, or distributions or take any other corrective action required to comply with, or otherwise permitted by, any program provided pursuant to applicable law, including without limitation the Employee Plans Compliance Resolution System or any successor guidance.

-33-

SECTION 13

CLAIMS REVIEW PROCEDURE

13.1           Notice of Denial.  If a Participant or a Beneficiary is denied a claim for benefits under the Plan, the Plan Administrator shall provide to the claimant written notice of the denial within ninety (90) days (forty-five (45) days with respect to a denial of any claim for benefits due to the Participant’s Disability) after the Plan Administrator receives the claim, unless special circumstances require an extension of time for processing the claim.  If such an extension of time is required, written notice of the extension shall be furnished to the claimant prior to the termination of the initial 90-day or 45-day period, as applicable.  In no event shall the extension exceed a period of ninety (90) days (thirty (30) days with respect to a claim for benefits due to the Participant’s Disability) from the end of such initial period.  With respect to a claim for benefits due to the Participant’s Disability, an additional extension of up to thirty (30) days beyond the initial 30-day extension period may be required for processing the claim.  In such event, written notice of the extension shall be furnished to the claimant within the initial 30-day extension period.  Any extension notice shall indicate the special circumstances requiring the extension of time, the date by which the Plan Administrator expects to render the final decision, the standards on which entitlement to benefits are based, the unresolved issues that prevent a decision on the claim and the additional information needed to resolve those issues.

13.2           Contents of Notice of Denial.  If a Participant or Beneficiary is denied a claim for benefits under a Plan, the Plan Administrator shall provide to such claimant written notice of the denial which shall set forth:

(a)           the specific reasons for the denial;

(b)           specific references to the pertinent provisions of the Plan on which the denial is based;

(c)           a description of any additional material or information necessary for the claimant to perfect the claim and an explanation of why such material or information is necessary;

(d)           an explanation of the Plan’s claim review procedures, and the time limits applicable to such procedures, including a statement of the claimant’s right to bring a civil action under Sections 502(a) of ERISA following an adverse benefit determination on review;

(e)           in the case of a claim for benefits due to a Participant’s Disability, if an internal rule, guideline, protocol or other similar criterion is relied upon in making the adverse determination, either the specific rule, guideline, protocol or other similar criterion; or a statement that such rule, guideline, protocol or other similar criterion was

-34-

relied upon in making the decision and that a copy of such rule, guideline, protocol or other similar criterion will be provided free of charge upon request; and

(f)           in the case of a claim for benefits due to a Participant’s Disability, if a denial of the claim is based on a medical necessity or experimental treatment or similar exclusion or limit, an explanation of the scientific or clinical judgment for the denial, an explanation applying the terms of the Plan to the claimant’s medical circumstances or a statement that such explanation will be provided free of charge upon request.

13.3           Right to Review.  After receiving written notice of the denial of a claim or that a domestic relations order is a qualified domestic relations order, a claimant or his representative shall be entitled to:

(a)           request a full and fair review of the denial of the claim or determination that a domestic relations order is a qualified domestic relations order by written application to the Plan Administrator (or Appeals Fiduciary in the case of a claim for benefits payable due to a Participant’s Disability);

(b)           request, free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the claim;

(c)           submit written comments, documents, records, and other information relating to the denied claim to the Plan Administrator or Appeals Fiduciary, as applicable; and

(d)           a review that takes into account all comments, documents, records, and other information submitted by the claimant relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination.

13.4           Application for Review.

(a)           If a claimant wishes a review of the decision denying his claim to benefits under the Plan, other than a claim described in Subsection (b) of this Section 13.4,  or if a claimant wishes to appeal a decision that a domestic relations order is a qualified domestic relations order, he must submit the written application to the Plan Administrator within sixty (60) days after receiving written notice of the denial or notice that the domestic relations order is a qualified domestic relations order.

(b)           If the claimant wishes a review of the decision denying his claim to benefits under the Plan due to a Participant’s Disability, he must submit the written application to the Appeals Fiduciary within one hundred eighty (180) days after receiving written notice of the denial.  With respect to any such claim, in deciding an

-35-

appeal of any denial based in whole or in part on a medical judgment (including determinations with regard to whether a particular treatment, drug, or other item is experimental, investigational, or not medically necessary or appropriate), the Appeals Fiduciary shall:

(i)           consult with a health care professional who has appropriate training and experience in the field of medicine involved in the medical judgment; and

(ii)           identify the medical and vocational experts whose advice was obtained on behalf of the Plan in connection with the denial without regard to whether the advice was relied upon in making the determination to deny the claim.

Notwithstanding the foregoing, the health care professional consulted pursuant to this Subsection (b) shall be an individual who was not consulted with respect to the initial denial of the claim that is the subject of the appeal or a subordinate of such individual.

13.5           Hearing.  Upon receiving such written application for review, the Plan Administrator or Appeals Fiduciary, as applicable, may sched­ule a hearing for purposes of reviewing the claimant’s claim, which hearing shall take place not more than thirty (30) days from the date on which the Plan Administrator or Appeals Fiduciary received such written application for review.

13.6           Notice of Hearing.  At least ten (10) days prior to the scheduled hearing, the claimant and his rep­resentative designated in writing by him, if any, shall receive written notice of the date, time, and place of such scheduled hearing.  The claimant or his representative, if any, may request that the hearing be rescheduled, for his convenience, on another reasonable date or at another reasonable time or place.

13.7           Counsel.  All claimants requesting a review of the decision denying their claim for bene­fits may employ counsel for purposes of the hearing.

13.8           Decision on Review.  No later than sixty (60) days (forty-five (45) days with respect to a claim for benefits due to the Participant’s Disability) following the receipt of the written application for review, the Plan Administrator or the Appeals Fiduciary, as applicable, shall submit its decision on the review in writing to the claimant involved and to his representative, if any, unless the Plan Administrator or Appeals Fiduciary determines that special circumstances (such as the need to hold a hearing) require an extension of time, to a day no later than one hundred twenty (120) days (ninety (90) days with respect to a claim for benefits due to the Participant’s Disability) after the date of receipt of the written application for review.  If the Plan Administrator or Appeals Fiduciary determines that the extension of time is required, the Plan Administrator or Appeals Fiduciary shall furnish to the claimant written

-36-

notice of the extension before the expiration of the initial sixty (60) day (forty-five (45) days with respect to a claim for benefits due to the Participant’s Disability) period.  The extension notice shall indicate the special circumstances requiring an extension of time and the date by which the Plan Administrator or Appeals Fiduciary expects to render its decision on review.  In the case of a decision adverse to the claimant, the Plan Administrator or Appeals Fiduciary shall provide to the claimant written notice of the denial which shall include:

(a)           the specific reasons for the decision;

(b)           specific references to the pertinent provisions of the Plan on which the decision is based;

(c)           a statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the claimant’s claim for benefits;

(d)           a statement describing any available voluntary appeal procedures (if any) and of the claimant’s right to obtain information about such procedures as required by ERISA and a statement of the claimant’s right to bring an action under Section 502(a) of ERISA following the denial of the claim upon review;

(e)           in the case of a claim for benefits due to the Participant’s Disability, if an internal rule, guideline, protocol or other similar criterion is relied upon in making the adverse determination, either the specific rule, guideline, protocol or other similar criterion; or a statement that such rule, guideline, protocol or other similar criterion was relied upon in making the decision and that a copy of such rule, guideline, protocol or other similar criterion will be provided free of charge upon request;

(f)           in the case of a claim for benefits due to a Participant’s Disability, if a denial of the claim is based on a medical necessity or experimental treatment or similar exclusion or limit, an explanation of the scientific or clinical judgment for the denial, an explanation applying the terms of the Plan to the claimant’s medical circumstances or a statement that such explanation will be provided free of charge upon request; and

(g)           in the case of a claim for benefits due to a Participant’s Disability, a statement regarding the availability of other voluntary alternative dispute resolution options.

SECTION 14

MISCELLANEOUS

14.1           Anti-Alienation.  No benefit which shall be payable under the Plan to any person shall be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge,

-37-

encumbrance or charge, and any attempt to anticipate, alienate, sell, transfer, assign, pledge, encumber or charge the same shall be void; and no such benefit shall in any manner be liable for, or subject to, the debts, contracts, liabilities, engagements or torts of any person, nor shall it be subject to attachment or legal process for, or against, such person, and the same shall not be recognized under the Plan, except to such extent as may be required by law.  Notwithstanding the above, this Section shall not apply to a “qualified domestic relations order” (as defined in Code Section 414(p)), and benefits may be paid pursuant to the provisions of such an order.  The Plan Administrator shall develop procedures (in accordance with applicable federal regulations) to determine whether a domestic relations order is qualified, and, if so, the method and the procedures for complying therewith.  In addition, a distribution to an “alternate payee” (as defined in Code Section 414(p)) shall be permitted if such distribution is authorized by a qualified domestic relations order, even if the affected Participant has not yet separated from service and has not yet reached the “earliest retirement age” (as defined in Code Section 414(p)).

14.2           Exceptions to Anti-Alienation.  Notwithstanding any other provision of the Plan, the benefit of a Participant shall be subject to legal process and may be assigned, alienated or attached pursuant to a court judgment or settlement provided:

 (a)        such Participant is ordered or required to pay the Plan in accordance with the following:

 (1)      a judgment or conviction for a crime involving the Plan;

 (2)      a civil judgment entered by a court in an action brought in connection with a violation of part 4 of subtitle B of Title I of ERISA; or

 (3)      a settlement agreement between such Participant and the Secretary of Labor, in connection with a violation (or alleged violation) of part 4 of subtitle B of Title I of ERISA by a fiduciary or any other person; and

 (b)       the judgment, order, decree, or settlement agreement shall expressly provide for the offset of all or part of the amount ordered or required to be paid to the Plan against such Participant’s benefits under the Plan.

14.3           Withholding of Payments.  If any person who shall be entitled to any benefit under the Plan shall become bankrupt or shall attempt to anticipate, alienate, sell, transfer, assign, pledge, encumber or charge such benefit under the Plan, then the payment of any such benefitin the event a Participant or Beneficiary is entitled to payment shall, in the discretion of the Plan Administrator, cease and terminate and in that event the Trustee shall hold or apply the same for the benefit of such person, his spouse, children, other dependents or any of them in such manner and in such proportion as the Plan Administrator shall determine.

-38-

14.4           Minors and Incompetents.  Whenever any benefit which shall be payable under the Plan is to be paid to or for the benefit of any person who is then a minor or determined to be incompetent by qualified medical advice, the Plan Administrator need not require the appointment of a guardian or custodian, but shall be authorized to cause the same to be paid over to the person having custody of such minor or incompetent, or to cause the same to be paid to such minor or incompetent without the intervention of a guardian or custodian, or to cause the same to be paid to a legal guardian or custodian of such minor or incompetent if one has been appointed or to cause the same to be used for the benefitof such minor or incompetent.

14.5           Missing Recipients.  If the Plan Administrator cannot ascertain the whereabouts of any Participant or Beneficiary to whom a payment is due under the Plan, the Plan Administrator may direct that the payment and all remaining payments otherwise due to the Participant be cancelled on the records of the Plan and the amount thereof applied as a forfeiture pursuant to Plan provisions; except that, in the event the Participant or Beneficiary later notifies the Plan Administrator of his whereabouts and requests the payments due to him under the Plan, the forfeited amount shall be restored either from Trust income or by a special contribution by the Plan Sponsor to the Plan, as determined by the Plan Administrator, in an amount equal to the cancelled payment(s).

SECTION 15

PROHIBITION AGAINST DIVERSION

At no time shall any part of the Fund be used for or diverted to purposes other than the exclusive benefit of the Participants or their Beneficiaries, subject, however, to the payment of all taxes and administrative expenses and subject to the provisions of the Plan with respect to returns of contributions.  Expenses incurred in the administration of the Plan shall be paid from the Trust, to the extent permitted by ERISA, unless such expenses are paid by the Plan Sponsor; provided, further, that the Plan Sponsor may be reimbursed by the Fund, to the extent permitted by ERISA, for Plan expenses originally paid by the Plan Sponsor.

SECTION 16

LIMITATION OF RIGHTS

Participation in the Plan shall not give any Employee any right or claim except to the extent that such right is specifically fixed under the terms of the Plan.  The adoption of the Plan and the Trust by any Plan Sponsor shall not be construed to give any Employee a right to be continued in the employ of a Plan Sponsor or as interfering with the right of a Plan Sponsor to terminate the employment of any Employee at any time.

-39-

SECTION 17

AMENDMENT TO OR TERMINATION OF THE

PLAN AND THE TRUST

17.1           Right of Primary Sponsor to Amend or Terminate. The Primary Sponsor reserves the right at any time to modify or amend or terminate the Plan or the Trust in whole or in part; provided, however, that the Primary Sponsor shall have no power to modify or amend the Plan in such manner as would cause or permit any portion of the funds held under a Plan to be used for, or diverted to, purposes other than for the exclusive benefit of Participants or their Beneficiaries, or as would cause or permit any portion of a fund held under the Plan to become the property of a Plan Sponsor; and provided further, that the duties or liabilities of the Trustee shall not be increased without its written consent.  No such modifications or amendments shall have the effect of retroactively changing or depriving Participants or Beneficiaries of rights  already accrued under the Plan.  No Plan Sponsor other than the Primary Sponsor shall have the right to so modify, amend or terminate the Plan or the Trust.  Notwithstanding the foregoing, each Plan Sponsor may terminate its own participation in the Plan and Trust pursuant to the Plan.

17.2           Right of Plan Sponsor to Terminate Participation. Each Plan Sponsor other than the Primary Sponsor shall have the right to terminate its participation in the Plan and Trust by resolution of its board of directors or other appropriate governing body and notice in writing to the Primary Sponsor and the Trustee unless such termination would result in the disqualification of the Plan or the Trust or would adversely affect the exempt status of the Plan or the Trust as to any other Plan Sponsor.  If contributions by or on behalf of a Plan Sponsor are completely terminated, the Plan and Trust shall be deemed terminated as to such Plan Sponsor.  Any termination by a Plan Sponsor, shall not be a termination as to any other Plan Sponsor.

17.3           Plan Termination.

 (a)           If the Plan is terminated by the Primary Sponsor or if contributions to the Trust should be permanently discontinued, it shall terminate as to all Plan Sponsors and the Fund shall be used, subject to the payment of expenses and taxes, for the benefit of Participants and Beneficiaries, and for no other purposes, and the Account of each affected Participant shall be fully vested and nonforfeitable, notwithstanding the provisions of the Section of the Plan which sets forth the vesting schedule.

 (b)           In the event of the partial termination of the Plan, each affected Participant’s Account shall be fully vested and nonforfeitable, notwithstanding the provisions of the Section of the Plan which sets forth the vesting schedule.

17.4           Payments Upon Plan Termination.  In the event of the termination of the Plan or the Trust with respect to a Plan Sponsor, the Accounts of the Participants with respect to the Plan as adopted by such Plan Sponsor shall be distributed in lump sum payments in accordance

-40-

with the applicable distribution provisions of the Plan pursuant to the instructions of the Plan Administrator; provided that the Trustee shall not be required to make any distribution until it receives a copy of an Internal Revenue Service determination letter to the effect that the termination does not affect the qualified status of the Plan or the exempt status of the Trust or, in the event that such letter is applied for and is not issued, until the Trustee is reasonably satisfied that adequate provision has been made for the payment of all taxes which may be due and owing by the Trust.

17.5           Plan Merger.  In the case of any merger or consolidation of the Plan with, or any transfer of the assets or liabilities of the Plan to, any other plan qualified under Code Section 401, the terms of the merger, consolidation or transfer shall be such that each Participant would receive (in the event of termination of the Plan or its successor immediately thereafter) a benefit which is no less than the benefit which the Participant would have received in the event of termination of the Plan immediately before the merger, consolidation or transfer.

17.6           Accrued Benefit Not to be Decreased by Amendment.  Notwithstanding any other provision of the Plan, an amendment to the Plan –

 (a)which eliminates or reduces an early retirement benefit, if any, or which eliminates or reduces a retirement-type subsidy (as defined in regulations issued by the Department of the Treasury), if any, or

 (b)which eliminates an optional form of benefit (except to the extent otherwise provided in Treasury Regulations)

shall not be effective with respect to benefits attributable to service before the amendment is adopted.  In the case of a retirement-type subsidy described in Subsection (a) above, this Section shall be applicable only to a Participant who satisfies, either before or after the amendment, the preamendment conditions for the subsidy.

SECTION 18

ADOPTION OF PLAN BY AFFILIATES

Any corporation or other business entity related to the Primary Sponsor by function or operation and any Affiliate, if the corporation, business entity or Affiliate is authorized to do so by written direction adopted by the Board of Directors, may adopt the Plan and the related Trust by action of the board of directors or other appropriate governing body of such corporation, business entity or Affiliate.  Any adoption shall be evidenced by certified copies of the resolutions of the foregoing board of directors or governing body indicating the adoption and by the execution of the Trust by the adopting corporation, or business entity or Affiliate.  The resolution shall state and define the effective date of the adoption of the Plan by the Plan Sponsor and, for the purpose of Code Section 415, the “limitation year” as to such Plan Sponsor.  Notwithstanding the foregoing, however, if the Plan and Trust as adopted by an Affiliate or

-41-

other corporation or business entity under the foregoing provisions shall fail to receive the initial approval of the Internal Revenue Service as a qualified Plan and Trust under Code Sections 401(a) and 501(a), any contributions by the Affiliate or other corporation or business entity after payment of all expenses will be returned to such Plan Sponsor free of any trust, and the Plan and Trust shall terminate, as to the adopting Affiliate or other corporation or business entity.

SECTION 19

QUALIFICATION AND RETURN OF CONTRIBUTIONS

19.1           Initial Qualification Failure.  If the Plan and the related Trust fail to receive the initial approval of the Internal Revenue Service as a qualified plan and trust within one (1) year after the date of denial of qualification (a) the contribution of a Plan Sponsor after payment of all expenses will be returned to a Plan Sponsor free of the Plan and Trust, (b) contributions made by a Participant shall be returned to the Participant who made the contributions, and (c) the Plan and Trust shall thereupon terminate.

19.2 Deductibility. All Plan Sponsor contributions to the Plan are contingent upon deductibility. To the extent permitted by the Code and other applicable laws and regulations thereunder, upon a Plan Sponsor’s request, a contribution which was made by reason of a mistake of fact or which was nondeductible under Code Section 404, shall be returned to a Plan Sponsor within one (1) year after the payment of the contribution, or the disallowance of the deduction (to the extent disallowed), whichever is applicable.

In the event of a contribution which was made by reason of a mistake of fact or which was nondeductible, the amount to be returned to the Plan Sponsor shall be the excess of the contribution above the amount that would have been contributed had the mistake of fact or the mistake in determining the deduction not occurred, less any net loss attributable to the excess.  Any net income attributable to the excess shall not be returned to the Plan Sponsor.  No return of any portion of the excess shall be made to the Plan Sponsor if the return would cause the balance in a Participant’s Account to be less than the balance would have been had the mistaken contribution not been made.

SECTION 20

SECTION 16 OF SECURITIES EXCHANGE ACT OF 1934

Notwithstanding any other provision of this Plan, to the extent required, the persons subject to the reporting requirements of Section 16 of the Securities Exchange Act of 1934 shall be subject to such withdrawal, investment and other restrictions necessary to satisfy Rule 16b-3 promulgated under such Act.  This Section 20 is intended to comply with Rule 16b-3 and shall be effective only to the extent required by such rule and shall be interpreted and administered in accordance with such rule.

-42-

SECTION 21

INCORPORATION OF SPECIAL LIMITATIONS

Appendices A, B, C, and D to the Plan, attached hereto, are incorporated by reference and the provisions of the same shall apply notwithstanding anything to the contrary contained herein.

WHEREOF, the Primary Sponsor has caused this indenture to be executed as of the date first above written.

RUBY TUESDAY, INC.

By: /s/ James J. Buettgen

James J. Buettgen

President, Chairman, and Chief Executive Officer

ATTEST:

/s/ Brian Wanamaker

Brian Wanamaker

Assistant Secretary

-43-

APPENDIX A

LIMITATION ON ALLOCATIONS

SECTION 1

Except to the extent permitted under Plan Section 3.1(c) and Code Section 414(v), if applicable, the ‘annual addition’ for any Participant for any one limitation year may not exceed the lesser of:

(a)           $53,000 (for the 2015 Plan Year), as adjusted under Code Section 415(d); or

(b)           100% of the Participant’s Annual Compensation (as modified by this Appendix A).

The limit described in Subsection (b) shall not apply to any contribution for medical benefits after separation from service (within the meaning of Code Section 401(h) or 419A(f)(2)) which is otherwise treated as an annual addition.

SECTION 2

(a)           For the purposes of this Appendix A, the term “annual addition” for any Participant means for any limitation year, the sum of certain Plan Sponsor, Affiliate, and Participant contributions, forfeitures, and other amounts as determined in Code Section 415(c)(2) in effect for that limitation year.

(b)           Participant contributions shall be determined without regard to:

(1)           Rollover Amounts;

(2)           repayments of loans made to a Participant from a plan;

(3)           catch-up contributions as described in Code Section 414(v);

(4)           repayments of amounts described in Code Section 411(a)(7)(B) (in accordance with Code Section 411(a)(7)(C)) and Section 411(a)(3)(D) or repayments of contributions to a governmental plan (as defined in Code Section 414(d)) as described in Code Section 415(k)(3);

A-1

(5)           repayments that would have been described in Paragraph (4) except that the plan to which such repayment is being made does not restrict the timing of repayments to the maximum extent permitted by Code Section 411(a);

(6)           employee contributions to a qualified cost of living arrangement within the meaning of Code Section 415(k)(2)(B); and

(7)           employee contributions to a simplified employee pension plan which are excludable from gross income under Code Section 401(k)(6).

SECTION 3

For purposes of this Appendix A, the term “limitation year” shall mean a Plan Year.

SECTION 4

For purposes of applying the limitations of this Appendix A, all defined contribution plans maintained or deemed to be maintained by a Plan Sponsor shall be treated as one defined contribution plan, and all defined benefit plans now or previously maintained or deemed to be maintained by a Plan Sponsor shall be treated as one defined benefit plan.  In the event any corrective actions are required to be taken with respect to this Plan or with respect to another defined contribution plan pursuant to any program described in Section 12.9 of this Plan as a result of the annual additions of a Participant exceeding the limitations set forth in Section 1 of this Appendix A and Code Section 415, because of the Participant’s participation in more than one defined contribution plan, such actions shall be taken first with regard to this Plan.

SECTION 5

The provisions of this Appendix A shall be construed in a manner consistent with the provisions of final Treasury Regulations issued under Code Section 415 and any successor guidance.

A-2

APPENDIX B

TOP-HEAVY PROVISIONS

SECTION 1

As used in this Appendix B, the following words shall have the following meanings:

(a)           “Determination Date” means, with respect to any Plan Year, the last day of the preceding Plan Year, or, in the case of the first Plan Year, means the last day of the first Plan Year.

(b)           “Key Employee” means an Employee or former Employee (including a Beneficiary of a Key Employee or former Key Employee) who at any time during the Plan Year containing the Determination Date was:

(1)           an officer of the Plan Sponsor or any Affiliate whose Annual Compensation was greater than $170,000 (as adjusted for changes in the cost of living as provided in regulations issued by the Secretary of the Treasury for Plan Years) for the calendar year in which the Plan Year ends, where the term “officer” means an administrative executive in regular and continual service to the Plan Sponsor or an Affiliate; provided, however, that in no event shall the number of officers exceed the lesser of (A) fifty (50) employees; or (B) the greater of (I) three (3) employees or (II) ten percent (10%) of the number of Employees during the Plan Year, with any non-integer being increased to the next integer.  If for any year, no officer of the Plan Sponsor meets the requirements of this Paragraph (1), the highest paid officer of the Plan Sponsor for the Plan Year shall be considered an officer for purposes of this Paragraph (1);

(2)           an owner of more than five percent (5%) of the outstanding stock of the Plan Sponsor or an Affiliate or more than five percent (5%) of the total combined voting power of all stock of the Plan Sponsor or an Affiliate; or

(3)           an owner of more than one percent (1%) of the outstanding stock of the Plan Sponsor or an Affiliate or more than one percent (1%) of the total combined voting power of all stock of the Plan Sponsor or an Affiliate, and who in such Plan Year had Annual Compensation from the Plan Sponsor and all of its Affiliates of more than $150,000.

For purposes of determining ownership under Paragraphs (2) and (3) above, the rules set forth in Code Section 318(a)(2) shall be applied as follows (i) in the case of any Plan Sponsor or Affiliate which is a corporation, by substituting five percent (5%) for fifty percent (50%) and, (ii) in the case of any Plan Sponsor or Affiliate which is not a

B-1

corporation, ownership shall be determined in accordance with Treasury Regulations which shall be based on principles similar to the principles of Code Section 318 (modified as described in Clause (i) above).

Employees other than Key Employees are sometimes referred to in this Appendix B as “non-key employees.”

(c)           “Required Aggregation Group” means:

(1)           each plan of the Plan Sponsor and its Affiliates which qualifies under Code Section 401 (a) in which a Key Employee is a participant, and

(2)           each other plan of the Plan Sponsor and its Affiliates which qualifies under Code Section 401 (a) and which enables any plan described in Subsection (a) of this Section to meet the requirements of Section 401(a)(4) or 410 of the Code.

(d)           (1)           “Top-Heavy” means:

(A)           if the Plan is not included in a Required Aggregation Group, the Plan’s condition in a Plan Year for which, as of the Determination Date:

(i)           the present value of the cumulative Accounts (excluding catch-up contributions as described in Code Section 414(v) made in the Plan Year in which the determination is being made) under the Plan for all Key Employees exceeds sixty percent (60%) of the present value of the cumulative Accounts (excluding catch-up contributions as described in Code Section 414(v) for the current Plan Year) under the Plan for all Participants; and

(ii)           the Plan, when included in every potential combination, if any, with any or all of:

(I)           any Required Aggregation Group, and

(II)           any plan of the Plan Sponsor which is not part of any Required Aggregation Group and which qualifies under Code Section 401 (a)

is part of a Top-Heavy Group (as defined in Paragraph (2) of this Subsection); and

B-2

(B)           if the Plan is included in a Required Aggregation Group, the Plan’s condition in a Plan Year for which, as of the Determination Date:

(i)           the Required Aggregation Group is a Top-Heavy Group (as defined in Paragraph (2) of this Subsection); and

(ii)           the Required Aggregation Group, when included in every potential combination, if any, with any or all of the plans of the Plan Sponsor and its Affiliates which are not part of the Required Aggregation Group and which qualify under Code Section 401(a), is part of a Top-Heavy Group (as defined in Paragraph (2) of this Subsection).

(C)           For purposes of Subparagraphs (A)(ii) and (B)(ii) of this Paragraph (1), any combination of plans must satisfy the requirements of Sections 401(a)(4) and 410 of the Code.

(2)           A group shall be deemed to be a Top-Heavy Group if:

(A)           the sum, as of the Determination Date, of the present value of the cumulative accrued benefits for all Key Employees under all plans included in such group exceeds

(B)           sixty percent (60%) of a similar sum determined for all participants in such plans.

(3)           (A)           For purposes of this Section, the present value of the accrued benefit for any participant in a defined contribution plan as of any Determination Date or last day of a plan year shall be the sum of:

(i)           as to any defined contribution plan other than a simplified employee pension, the account balance as of the most recent valuation date occurring within the plan year ending on the Determination Date or last day of a plan year, and

(ii)           as to any simplified employee pension, the aggregate employer contributions, and

(iii)           an adjustment for contributions due as of the Determination Date or last day of a plan year.

B-3

In the case of a plan that is not subject to the minimum funding requirements of Code Section 412, the adjustment in Clause (iii) of this Subparagraph (A) shall be the amount of any contributions actually made after the valuation date but on or before the Determination Date or last day of the plan year to the extent not included under Clause (i) or (ii) of this Subparagraph (A); provided, however, that in the first plan year of the plan, the adjustment in Clause (iii) of this Subparagraph (A) shall also reflect the amount of any contributions made thereafter that are allocated as of a date in such first plan year.  In the case of a plan that is subject to the minimum funding requirements, the account balance in Clause (i) and the aggregate contributions in Clause (ii) of this Subparagraph (A) shall include contributions that would be allocated as of a date not later than the Determination Date or last day of a plan year, even though those amounts are not yet required to be contributed, and the adjustment in Clause (iii) of this Subparagraph (A) shall be the amount of any contribution actually made (or due to be made) after the valuation date to the extent permitted by regulations or other guidance of general applicability and not otherwise included under Clause (i) or (ii) of this Subparagraph (A).

(B)           For purposes of this Subsection, the present value of the accrued benefit for any participant in a defined benefit plan as of any Determination Date or last day of a plan year must be determined as of the most recent valuation date which is within a 12-month period ending on the Determination Date or last day of a plan year as if such participant terminated as of such valuation date; provided, however, that in the first plan year of a plan, the present value of the accrued benefit for a current participant must be determined either (i) as if the participant terminated service as of the Determination Date or last day of a plan year or (ii) as if the participant terminated service as of such valuation date, but taking into account the estimated accrued benefit as of the Determination Date or last day of a plan year.  For purposes of this Subparagraph (B), the valuation date must be the same valuation date used for computing plan costs for minimum funding, regardless of whether a valuation is performed that year.  The actuarial assumptions utilized in calculating the present value of the accrued benefit for any participant in a defined benefit plan for purposes of this Subparagraph (B) shall be established by the Plan Administrator after consultation with the actuary for the plan, and shall be reasonable in the aggregate and shall comport with the requirements set forth by the Internal Revenue Service in Q&A T-26 and T-27 of Regulation Section 1.416-1.

B-4

(C)           For purposes of determining the present value of the cumulative accrued benefit under a plan for any Participant in accordance with this Subsection, the present value shall be increased by the aggregate distributions made with respect to the Participant (including distributions paid on account of death to the extent they do not exceed the present value of the cumulative accrued benefit existing immediately prior to death) under each plan being considered, and under any terminated plan which if it had not been terminated would have been in a Required Aggregation Group with the Plan, during the one-year period ending on the Determination Date or the last day of the Plan Year that falls within the calendar year in which the Determination Date falls.  In the case of a distribution made with respect to a Participant made for a reason other than severance from employment, death, or disability, this provision shall be applied by substituting a five-year period for the one-year period.

(D)           For purposes of this Paragraph (3), participant contributions which are deductible as “qualified retirement contributions” within the meaning of Code Section 219 or any successor, as adjusted to reflect income, gains, losses, and other credits or charges attributable thereto, shall not be considered to be part of the accrued benefits under any plan.

(E)           For purposes of this Paragraph (3), if any employee is not a Key Employee with respect to any plan for any plan year, but such employee was a Key Employee with respect to such plan for any prior plan year, any accrued benefit for such employee shall not be taken into account.

(F)           For purposes of this Paragraph (3), if any Employee has not performed any service for a Plan Sponsor or an Affiliate maintaining the Plan during the one-year period ending on the Determination Date, any accrued benefit for that Employee shall not be taken into account.

(G)           (i)           In the case of an “unrelated rollover” (as defined below) between plans which qualify under Code Section 401(a), (a) the plan providing the distribution shall count the distribution as a distribution under Subparagraph (C) of this Paragraph (3), and (b) the plan accepting the distribution shall not consider the distribution part of the accrued benefit under this Section; and

(ii)           in the case of a “related rollover” (as defined below) between plans which qualify under Code Section 401(a),

B-5

(a) the plan providing the distribution shall not count the distribution as a distribution under Subparagraph (C) of this Paragraph (3), and (b) the plan accepting the distribution shall consider the distribution part of the accrued benefit under this Section.

For purposes of this Subparagraph (G), an “unrelated rollover” is a rollover as defined in Code Section 402(c)(4) or 408(d)(3) or a plan-to-plan transfer which is both initiated by the participant and made from a plan maintained by one employer to a plan maintained by another employer where the employers are not Affiliates.  For purposes of this Subparagraph (G), a “related rollover” is a rollover as defined in Code Section 402(c)(4) or 408(d)(3) or a plan-to-plan transfer which is either not initiated by the participant or made to a plan maintained by the employer or an Affiliate.

SECTION 2

(a)           Notwithstanding anything contained in the Plan to the contrary, except as otherwise provided in Subsection (b) of this Section, in any Plan Year during which the Plan is Top-Heavy, allocations of Plan Sponsor contributions and forfeitures for the Plan Year for the Account of each Participant who is not a Key Employee and who has not separated from service with the Plan Sponsor prior to the end of the Plan Year shall not be less than three percent (3%) of the Participant’s Annual Compensation.  For purposes of this Subsection, an allocation to a Participant’s Account resulting from any Plan Sponsor contribution attributable to a salary reduction or similar arrangement shall not be taken into account.

(b)           (1)           The percentage referred to in Subsection (a) of this Section for any Plan Year shall not exceed the percentage at which allocations are made or are required to be made under the Plan for the Plan Year for the Key Employee for whom the percentage is highest for a Plan Year.  For purposes of this Paragraph, an allocation to the Account of a Key Employee resulting from any Plan Sponsor contribution attributable to a salary reduction or similar agreement shall be taken into account but allocations of catch-up contributions as described in Code Section 414(v) shall not be taken into account.

(2)           For purposes of this Subsection (b), all defined contribution plans which are members of a Required Aggregation Group shall be treated as part of the Plan.

B-6

(3)           This Subsection (b) shall not apply to any plan which is a member of a Required Aggregation Group if the plan enables a defined benefit plan which is a member of the Required Aggregation Group to meet the requirements of Code Section 401(a)(4) or 410.

(4)           If the Plan Sponsor maintains a defined benefit plan which is qualified under Code Section 401(a) and which would be Top-Heavy within the meaning of the Plan for its plan year ending within or coincident with the Plan Year, no allocation shall be made pursuant to Subsection (a) of this Section on behalf of any Participant who participates in the defined benefit plan and acquires a year of service within the meaning of Paragraphs (4), (5) and (6) of Code Section 411(a) under the defined benefit plan for the plan year, if the defined benefit plan provides generally that the accrued benefit of the Participant when expressed as an annual retirement benefit shall not, when expressed as a percentage of the Participant’s Annual Compensation, be less than the lesser of (A) 2 percent multiplied by the number of such years of service in plan years during which such plan was Top-Heavy, or (B) 20 percent.

SECTION 3

Notwithstanding anything contained in the Plan to the contrary, in any Plan Year during which the Plan is Top-Heavy, a Participant’s interest in his Account shall not vest at any rate which is slower than the following schedule, effective as of the first day of that Plan Year:

Full Years of	Percentage
Vesting Service	Vested
Less than 3	0%
3 or more	100%

The Schedule set forth above in this Section 4 shall be inapplicable to a Participant who has failed to perform an Hour of Service after the Determination Date on which the Plan has become Top-Heavy.  When the Plan ceases to be Top-Heavy, the Schedule set forth above in this Section 4 shall cease to apply; provided however, that the provisions of the Plan Section dealing with changes in the vesting schedule shall apply.

SECTION 4

Notwithstanding anything in the Plan to the contrary, this Appendix shall only apply to the extent required by Code Section 416 including, without limitation, Code Section 416(i)(4).

B-7

APPENDIX C

SPECIAL NONDISCRIMINATION RULES

SECTION 1

As used in this Appendix, the following words shall have the following meanings:

(a)           “Eligible Participant” means a Participant who is an Employee during any particular Plan Year.

(b)           “Highly Compensated Eligible Participant” means any Eligible Participant who is a Highly Compensated Employee.

(c)           “Matching Contribution” means any contribution made by a Plan Sponsor to a Company Matching Account and any other contribution made to a plan by a Plan Sponsor or an Affiliate on behalf of an Employee on account of a contribution made by an Employee or on account of an Elective Deferral.

(d)           “Qualified Matching Contributions” means Matching Contributions of the Plan Sponsor or an Affiliate to the Employee Deferred Account of a Participant who is not a Highly Compensated Employee which are immediately nonforfeitable when made, and which would be nonforfeitable, regardless of the age or service of the Employee or whether the Employee is employed on a certain date, and which may not be distributed, except upon one of the events described under Section 401(k)(2)(B) of the Code and the regulations thereunder.

(e)           “Qualified Nonelective Contributions” means contributions of the Plan Sponsor or an Affiliate to the Employee Deferred Account of a Participant who is not a Highly Compensated Employee, other than Matching Contributions or Elective Deferrals, which are nonforfeitable when made, and which would be nonforfeitable regardless of the age or service of the Employee or whether the Employee is employed on a certain date, and which may not be distributed, except upon one of the events described under Code Section 401(k)(2)(B) and the regulations thereunder.

SECTION 2

In addition to any other limitations set forth in the Plan, for each Plan Year one of the following tests must be satisfied:

C-1

(a)           the actual deferral percentage for the Highly Compensated Eligible Participants for the Plan Year must not be more than the actual deferral percentage of all other Eligible Participants for the preceding Plan Year multiplied by 1.25; or

(b)           the excess of the actual deferral percentage for the Highly Compensated Eligible Participants for the Plan Year over that of all other Eligible Participants for the preceding Plan Year must not be more than two (2) percentage points, and the actual deferral percentage for the Highly Compensated Eligible Participants for the Plan Year must not be more than the actual deferral percentage of all other Eligible Participants for the preceding Plan Year multiplied by two (2).

The “actual deferral percentage” for the Highly Compensated Eligible Participants and all other Eligible Participants for a Plan Year is the average in each group of the ratios, calculated separately for each Employee, of the Deferral Amounts contributed by the Plan Sponsor on behalf of an Employee for the Plan Year to the Annual Compensation of the Employee in the Plan Year.  In addition, for purposes of calculating the “actual deferral percentage” as described above, Deferral Amounts of Employees who are not Highly Compensated Employees which are prohibited by Code Section 401(a)(30) shall not be taken into consideration.  Except to the extent limited by Treasury Regulations Section 1.401(k)-2(a)(6) and any other applicable regulations promulgated by the Secretary of the Treasury, all or part of the Qualified Matching Contributions and Qualified Nonelective Contributions (other than Qualified Nonelective Contributions that are treated as Matching Contributions pursuant to Section 5 of Appendix C) made pursuant to the Plan may be treated as Deferral Amounts for purposes of determining the “actual deferral percentage.”

The Plan Sponsor may in its sole discretion contribute Qualified Nonelective Contributions or Qualified Matching Contributions with respect to a Plan Year, provided the contributions are made no later than the last day of the Plan Year following the Plan Year for which the Qualified Nonelective Contributions or Qualified Matching Contributions are made.

SECTION 3

If the Deferral Amounts contributed on behalf of any Highly Compensated Eligible Participant exceed the amount permitted under the “actual deferral percentage” test described in Section 2 of this Appendix C for any given Plan Year, then before the end of the Plan Year following the Plan Year for which the Excess Deferral Amount was contributed, (a) the portion of the Excess Deferral Amount for the Plan Year attributable to a Highly Compensated Eligible Participant, as adjusted in accordance with Code Section 401(k) and applicable Treasury Regulations and reduced by any excess Elective Deferrals as determined pursuant to Section 3.1 previously distributed to a Participant for the Participant’s taxable year ending with or within the Plan Year, may be distributed to the Highly Compensated Eligible Participant or (b) to the extent provided in regulations issued by the Secretary of the Treasury, the Plan Administrator

C-2

 may permit the Participant to elect, within two and one-half months after the end of the Plan Year for which the Excess Deferral Amount was contributed, to treat the Excess Deferral Amount, unadjusted for earnings, gains, and losses, but as so reduced, as an amount distributed to the Participant and then contributed as an after-tax contribution by the Participant to the Plan (“recharacterized amounts”).  The income, gain, or loss allocable to such Excess Deferral Amount shall be determined in a similar manner as described in Section 4.2 of the Plan or in any other manner permitted by applicable Treasury Regulations.  The Excess Deferral Amount to be distributed or recharacterized shall be reduced by Deferral Amounts previously distributed or recharacterized for the taxable year ending in the same Plan Year, and shall also be reduced by Deferral Amounts previously distributed or recharacterized for the Plan Year beginning in such taxable year.  For all other purposes under the Plan other than this Appendix C recharacterized amounts shall continue to be treated as Deferral Amounts.  The portion of the Matching Contribution on which such Excess Deferral Amount was based shall be forfeited upon the distribution or recharacterization, as the case may be, of such Excess Deferral Amount.

Notwithstanding the foregoing, if the Plan satisfies the actual deferral percentage test through correction by distribution of Excess Deferral Amounts for any Plan Year, any Excess Deferral Amounts attributable to a Highly Compensated Eligible Participant who is eligible to make Catch-Up Contributions, shall be retained in the Plan and treated as Catch-Up Contributions under the Plan.  To the extent that the Excess Deferral Amount would exceed the applicable dollar amount specified in Code Section 414(v), as adjusted, such amount shall be distributed in accordance with Subsection (b), below, of this Section 3.

 (a) For purposes of this Section 3, “Excess Deferral Amount” means, with respect to a Plan Year, the excess of:

    (1) the aggregate amount of Deferral Amounts contributed by a Plan Sponsor on behalf of Highly Compensated Eligible Participants for the Plan Year, over

(2)  the maximum amount of Deferral Amounts permitted under Section 2 of this Appendix C for the Plan Year, which shall be determined by reducing the Deferral Amounts contributed on behalf of Highly Compensated Eligible Participants in order of the actual deferral percentages beginning with the highest of such percentages.

(b)Distribution of the Excess Deferral Amount for any Plan Year shall be made to Highly Compensated Eligible Participants on the basis of the dollar amount of Deferral Amounts attributable to each Highly Compensated Eligible Participant. The Plan Sponsor shall determine the amount of Excess Deferral Amounts which shall be distributed to each Highly Compensated Eligible Participant as follows.

C-3

(1) The Deferral Amounts allocated to the Highly Compensated Eligible Participant with the highest dollar amount of Deferral Amounts for the Plan Year shall be reduced by the amount required to cause that Highly Compensated Eligible Participant’s remaining Deferral Amounts for the Plan Year to be equal to the dollar amount of the Deferral Amounts allocated to the Highly Compensated Eligible Participant with the next highest dollar amount of Deferral Amounts for the Plan Year. This amount is then distributed to the Highly Compensated Eligible Participant with the highest dollar amount of Deferral Amounts, unless a smaller reduction, when added to the total dollar amount already distributed pursuant to this Paragraph (1), equals the total Excess Deferral Amounts.

(2)  If the total amount distributed under Paragraph (1) of this Section 3(b) is less than the total Excess Deferral Amounts, the procedure in Paragraph (1) shall be successively repeated until the total dollar amount distributed is equal to the total Excess Deferral Amounts attributable to Highly Compensated Eligible Participants.

If a distribution of the Excess Deferral Amounts attributable to the Highly Compensated Eligible Participants is made in accordance with Paragraphs (1) and (2) of this Section, the limitations in Section 2 of this Appendix C shall be treated as being met regardless of whether the actual deferral percentage, if recalculated after such distributions, would have satisfied the requirements of Section 2.

SECTION 4

The Plan Administrator shall have the responsibility of monitoring the Plan’s compliance with the limitations of this Appendix C and shall have the power to take all steps it deems necessary or appropriate to ensure compliance, including, without limitation, restricting the amount which Highly Compensated Eligible Participants can elect to have contributed pursuant to Plan Section 3.1(a).  Any actions taken by the Plan Administrator pursuant to this Section 4 shall be pursuant to non-discriminatory procedures consistently applied.

SECTION 5

In addition to any other limitations set forth in the Plan, Matching Contributions under the Plan and the amount of nondeductible employee contributions under the Plan, for each Plan Year must satisfy one of the following tests:

(a)           The contribution percentage for Highly Compensated Eligible Participants for the Plan Year must not exceed 125% of the contribution percentage for all other Eligible Participants for the preceding Plan Year; or

C-4

(b)           The contribution percentage for Highly Compensated Eligible Participants for the Plan Year must not exceed the lesser of (1) 200 % of the contribution percentage for all other Eligible Participants for the preceding Plan Year, and (2) the contribution percentage for all other Eligible Participants for the preceding Plan Year plus two (2) percentage points.

Notwithstanding the foregoing, for purposes of this Section 5, the terms Highly Compensated Eligible Participant and Eligible Participant shall not include any Participant who is not eligible to receive a Matching Contribution under the provisions of the Plan, other than as a result of the Participant failing to contribute to the Plan or failing to have an Elective Deferral contributed to the Plan on the Participant’s behalf.  Notwithstanding the foregoing, if Qualified Matching Contributions are taken into account for purposes of applying the test contained in Section 2 of this Appendix C, they shall not be taken into account under this Section 5.  The “contribution percentage” for Highly Compensated Eligible Participants and for all other Eligible Participants for a Plan Year shall be the average of the ratios, calculated separately for each Participant, of (A) to (B), where (A) is the amount of Matching Contributions under the Plan (excluding Qualified Matching Contributions which are used to apply the test set forth in Section 2 of this Appendix C) and nondeductible employee contributions made under the Plan for the Eligible Participant for the Plan Year, and where (B) is the Annual Compensation of the Eligible Participant for the Plan Year.  Except to the extent limited by Treasury Regulations Section 1.401(m)-2(a)(6) and any other applicable regulations promulgated by the Secretary of the Treasury, a Plan Sponsor may elect to treat Deferral Amounts and Qualified Nonelective Contributions as Matching Contributions for purpose of determining the “contribution percentage,” provided the Deferral Amounts, excluding those treated as Matching Contributions, satisfy the test set forth in Section 2 of Appendix C.

The Plan Sponsor may in its sole discretion contribute Qualified Nonelective Contributions or Qualified Matching Contributions with respect to a Plan Year, provided the contributions are made no later than the last day of the Plan Year following the Plan Year for which the Qualified Nonelective Contributions or Qualified Matching Contributions are made. Notwithstanding the foregoing, Qualified Nonelective Contributions and Qualified Matching Contributions that are taken into account for purposes of applying the test contained in Section 2 of this Appendix C shall not be taken into account under this Section 5.

SECTION 6

If either (a) the Matching Contributions and, if taken into account under Section 5 of this Appendix C, the Deferral Amounts, Qualified Nonelective Contributions and/or Qualified Matching Contributions made on behalf of Highly Compensated Eligible Participants, or (b) the nondeductible employee contributions made by Highly Compensated Eligible Participants exceed the amount permitted under the “contribution percentage test” for any given Plan Year,

C-5

 then, before the close of the Plan Year following the Plan Year for which the Excess Aggregate Contributions were made, the amount of the Excess Aggregate Contributions attributable to the Plan for the Plan Year under either Section 6(c)(1) or (2), or both, as adjusted in accordance with Code Section 401(m) and applicable Treasury Regulations to reflect any income, gain or loss attributable to such contributions shall be distributed or, if the Excess Aggregate Contributions are forfeitable, forfeited.  The income allocable to such contributions shall be determined in a similar manner as described in Section 4.2 of the Plan.  As to any Highly Compensated Employee, any distribution or forfeiture of his allocable portion of the Excess Aggregate Contributions for a Plan Year shall first be attributed to any nondeductible employee contributions made by the Participant during the Plan Year for which no corresponding Plan Sponsor contribution is made and then to any remaining nondeductible employee contributions made by the Participant during the Plan Year and any Matching Contributions thereon.  As between the Plan and any other plan or plans maintained by the Plan Sponsor in which Excess Aggregate Contributions for a Plan Year are held, each such plan shall distribute or forfeit a pro-rata share of each class of contribution based on the respective amounts of a class of contribution made to each plan during the Plan Year.  The payment of the Excess Aggregate Contributions shall be made without regard to any other provision in the Plan.

For purposes of this Section 6, with respect to any Plan Year, “Excess Aggregate Contributions” means the excess of:

(a)           the aggregate amount of the Matching Contributions and nondeductible employee contributions (and any Qualified Nonelective Contributions or Qualified Matching Contributions) and, it taken into account under Section 5 of this Appendix C, the Deferral Amounts actually made on behalf of Highly Compensated Eligible Participants for the Plan Year, over

(b)           the maximum amount of contributions permitted under the limitations of Section 5 of this Appendix C, determined by reducing contributions made on behalf of Highly Compensated Eligible Participants in order of their contribution percentages beginning with the highest of such percentages.

The determination of the amount of Excess Aggregate Contributions under this Section 6 shall be made after (1) first determining the excess Elective Deferrals under Section 3.1(b) of the Plan and (2) then determining the Excess Deferral Amounts under Section 3 of this Appendix C.

(c) Distribution or forfeiture of nondeductible employee contributions or Matching Contributions in the amount of the Excess Aggregate Contributions for any Plan Year shall be made with respect to Highly Compensated Eligible Participants on the basis of the dollar amount of the Excess Aggregate Contributions attributable to each Highly Compensated Eligible Participant. Forfeitures of Excess Aggregate Contributions may not be allocated to Participants whose contributions are reduced under this Section 6. The Plan

C-6

Sponsor shall determine the amount of Excess Aggregate Contributions which shall be distributed (or forfeited, if forfeitable) to each Highly Compensated Eligible Participant as follows.

(1) The Matching Contributions and nondeductible contributions allocated to the Highly Compensated Eligible Participant with the highest dollar amount of such contributions for the Plan Year shall be reduced by the amount required to cause that Highly Compensated Eligible Participant’s remaining Matching Contributions and nondeductible contributions for the Plan Year to be equal to the dollar amount of such contributions allocated to the Highly Compensated Eligible Participant with the next highest dollar amount of Matching Contributions and nondeductible contributions for the Plan Year. This amount is then distributed to the Highly Compensated Eligible Participant with the highest dollar amount of Matching Contributions and nondeductible contributions, unless a smaller reduction, when added to the total dollar amount already distributed pursuant to this Subsection (1), equals the total Excess Aggregate Contributions.

(2) If the total amount distributed under Paragraph (1) is less than the total Excess Aggregate Contributions, the procedure in Paragraph (1) shall be repeated until the total dollar amount of Matching Contributions and nondeductible contributions distributed is equal to the total Excess Aggregate Contributions attributable to Highly Compensated Eligible Participants.

If a distribution of the total Excess Aggregate Contributions is made in accordance with Paragraphs (1) and (2) of this Section 6(c), the limitations in Section 5 of this Appendix C shall be treated as being met regardless of whether the actual contribution percentage, if recalculated after such distributions, would have satisfied the requirements of Section 5.

SECTION 7

Except to the extent limited by rules promulgated by the Secretary of the Treasury, if a Highly Compensated Eligible Participant is a participant in any other plan of the Plan Sponsor or any Affiliate which includes Matching Contributions, deferrals under a cash or deferred arrangement pursuant to Code Section 401(k), or nondeductible employee contributions, any contributions made by or on behalf of the Participant to the other plan shall be allocated with the same class of contributions under the Plan for purposes of determining the “actual deferral percentage” and “contribution percentage” under the Plan.

Except to the extent limited by rules promulgated by the Secretary of the Treasury, if the Plan and any other plans which include Matching Contributions, deferrals under a cash or deferred arrangement pursuant to Code Section 401(k), or nondeductible employee

C-7

contributions are considered as one plan for purposes of Code Section 401(a)(4) and 410(b)(1), any contributions under the other plans shall be allocated with the same class of contributions under the Plan for purposes of determining the “contribution percentage” and “actual deferral percentage” under the Plan.

C-8

APPENDIX D

MINIMUM DISTRIBUTION REQUIREMENTS

SECTION 1

GENERAL RULES

(a)           Effective Date and Precedence.  The provisions of this Appendix D will apply for purposes of determining required minimum distributions for calendar years beginning with the 2003 calendar year.  The requirements of this Appendix D will take precedence over any inconsistent provisions of the Plan.

(b)           Requirements of Treasury Regulations Incorporated.  All distributions required under this Section will be determined and made in accordance with the Treasury Regulations under Code Section 401(a)(9).

(c)           TEFRA Section 242(b)(2) Elections.  Notwithstanding the other provisions of this Appendix D, distributions may be made under a designation made before January 1, 1984, in accordance with Section 242(b)(2) of the Tax Equity and Fiscal Responsibility Act (TEFRA) and the provisions of the Plan that relate to Section 242(b)(2) of TEFRA.

SECTION 2

TIME AND MANNER OF DISTRIBUTION

(a)           Required Beginning Date.  The Participant’s entire interest will be distributed, or begin to be distributed, to the Participant no later than the Participant’s Required Beginning Date.

(b)           Death of Participant Before Distributions Begin.  If the Participant dies before distributions begin, the Participant’s entire interest will be distributed, or begin to be distributed as follows:

(1)           If the Participant’s surviving spouse is the Participant’s sole Designated Beneficiary, then, distributions to the surviving spouse will begin by December 31 of the calendar year immediately following the calendar year in which the Participant died, or by December 31 of the calendar year in which the Participant would have attained age 70½, if later.

(2)           If the Participant’s surviving spouse is not the Participant’s sole Designated Beneficiary, then, distributions to the Designated Beneficiary will

D-1

begin by December 31 of the calendar year immediately following the calendar year in which the Participant died.

(3)           If there is no Designated Beneficiary as of September 30 of the year following the year of the Participant’s death, the Participant’s entire interest will be distributed by December 31 of the calendar year containing the fifth anniversary of the Participant’s death.

(4)           If the Participant’s surviving spouse is the Participant’s sole Designated Beneficiary and the surviving spouse dies after the Participant but before distributions to the surviving spouse begin, this Section 2(b), other than Section 2(b)(1) of this Appendix D, will apply as if the surviving spouse were the Participant.

For purposes of this Section 2(b) and Section 4 of this Appendix D, unless Section 2(b)(4) of this Appendix D applies, distributions are considered to begin on the Participant’s Required Beginning Date.  If Section 2(b) of this Appendix D applies, distributions are considered to begin on the date distributions are required to begin to the surviving spouse under Section 2(b)(1) of this Appendix D. If distributions under an annuity purchased from an insurance company irrevocably commence to the Participant before the Participant’s Required Beginning Date (or to the Participant’s surviving spouse before the date distributions are required to begin to the surviving spouse under Section 2(b)(1)), the date distributions are considered to begin is the date distributions actually commence.

(c)           Forms of Distribution.  Unless the Participant’s interest is distributed in the form of an annuity purchased from an insurance company or in a single sum on or before the Required Beginning Date, as of the first Distribution Calendar Year, distributions will be made in accordance with Sections 3 and 4 of this Appendix D.  If the Participant’s interest is distributed in the form of an annuity purchased from an insurance company, distributions thereunder will be made in accordance with the requirements of Code Section 401(a)(9) and the regulations issued thereunder.

SECTION 3

REQUIRED MINIMUM DISTRIBUTIONS DURING PARTICIPANT’S LIFETIME

(a)           Amount of Required Minimum Distribution For Each Distribution Calendar Year.  During the Participant’s lifetime, the minimum amount that will be distributed for each Distribution Calendar Year is the lesser of:

D-2

(1)           the quotient obtained by dividing the Participant’s Account Balance by the distribution period in the Uniform Lifetime Table set forth in Section 1.401(a)(9)-9 of the Treasury Regulations, using the Participant’s age as of the Participant’s birthday in the Distribution Calendar Year; or

(2)           if the Participant’s sole Designated Beneficiary for the Distribution Calendar Year is the Participant’s spouse, the quotient obtained by dividing the Participant’s Account Balance by the number in the Joint and Last Survivor Table set forth in Section 1.401(a)(9)-9 of the Treasury Regulations, using the Participant’s and spouse’s attained ages as of the Participant’s and spouse’s birthdays in the Distribution Calendar Year.

(b)           Lifetime Required Minimum Distributions Continue Through Year of Participant’s Death.  Required minimum distributions will be determined under this Section 3 beginning with the first Distribution Calendar Year and up to and including the Distribution Calendar Year that includes the Participant’s date of death.

SECTION 4

REQUIRED MINIMUM DISTRIBUTIONS AFTER PARTICIPANT’S DEATH

(a)           Death On or After Date Distributions Begin.

(1)           Participant Survived by Designated Beneficiary.  If the Participant dies on or after the date distributions begin and there is a Designated Beneficiary, the minimum amount that will be distributed for each Distribution Calendar Year after the year of the Participant’s death is the quotient obtained by dividing the Participant’s Account Balance by the longer of the remaining Life Expectancy of the Participant or the remaining Life Expectancy of the Participant’s Designated Beneficiary, determined as follows:

(i)           The Participant’s remaining Life Expectancy is calculated using the age of the Participant in the year of death, reduced by one for each subsequent year.

(ii)           If the Participant’s surviving spouse is the Participant’s sole Designated Beneficiary, the remaining Life Expectancy of the surviving spouse is calculated for each Distribution Calendar Year after the year of the Participant’s death using the surviving spouse’s age as of the spouse’s birthday in that year.  For Distribution Calendar Years after the year of the surviving spouse’s death, the remaining Life Expectancy of the surviving spouse is calculated using the age of the surviving

D-3

spouse as of the spouse’s birthday in the calendar year of the spouse’s death, reduced by one for each subsequent calendar year.

(iii)           If the Participant’s surviving spouse is not the Participant’s sole Designated Beneficiary, the Designated Beneficiary’s remaining Life Expectancy is calculated using the age of the Designated Beneficiary in the year following the year of the Participant’s death, reduced by one for each subsequent year.

(2)           No Designated Beneficiary.  If the Participant dies on or after the date distributions begin and there is no Designated Beneficiary as of September 30 of the year after the year of the Participant’s death, the minimum amount that will be distributed for each Distribution Calendar Year after the year of the Participant’s death is the quotient obtained by dividing the Participant’s Account Balance by the Participant’s remaining Life Expectancy calculated using the age of the Participant in the year of death, reduced by one for each subsequent year.

(b)           Death Before Date Distributions Begin.

(1)           Participant Survived by Designated Beneficiary.  If the Participant dies before the date distributions begin and there is a Designated Beneficiary, the minimum amount that will be distributed for each Distribution Calendar Year after the year of the Participant’s death is the quotient obtained by dividing the Participant’s Account Balance by the remaining Life Expectancy of the Participant’s Designated Beneficiary, determined as provided in Section 4(a).

(2)           No Designated Beneficiary.  If the Participant dies before the date distributions begin and there is no Designated Beneficiary as of September 30 of the year following the year of the Participant’s death, distribution of the Participant’s entire interest will be completed by December 31 of the calendar year containing the fifth anniversary of the Participant’s death.

(3)           Death of Surviving Spouse Before Distributions to Surviving Spouse Are Required to Begin.  If the Participant dies before the date distributions begin, the Participant’s surviving spouse is the Participant’s sole Designated Beneficiary, and the surviving spouse dies before distributions are required to begin to the surviving spouse under Section 2(b)(1) of this Appendix D, this Section (b) will apply as if the surviving spouse were the Participant.

(4)           Alternative for Distributions to Designated Beneficiaries.  In lieu of receiving distributions as required under Subsection (1) and (3) above, the Designated Beneficiary may elect to take distribution of the Participant’s entire

D-4

 interest on or before the December 31 of the calendar year containing the fifth anniversary of the Participant’s death.

SECTION 5

DEFINITIONS

As used in this Appendix D, the following words and phrases shall have the meaning set forth below:

(a)           Designated Beneficiary.  The individual who is designated as the Beneficiary under Section 1.6 of the Plan and is the designated Beneficiary under Section 401(a)(9) of the Internal Revenue Code and Section 1.401(a)(9)-4, Q&A-1, of the Treasury Regulations.

(b)           Distribution Calendar Year.  A calendar year for which a minimum distribution is required.  For distributions beginning before the Participant’s death, the first Distribution Calendar Year is the calendar year immediately preceding the calendar year which contains the Participant’s Required Beginning Date.  For distributions beginning after the Participant’s death, the first Distribution Calendar Year is the calendar year in which distributions are required to begin under Section 2(b).  The required minimum distribution for the Participant’s first Distribution Calendar Year will be made on or before the Participant’s Required Beginning Date.  The required minimum distribution for other Distribution Calendar Years, including the required minimum distribution for the Distribution Calendar Year in which the Participant’s Required Beginning Date occurs, will be made on or before December 31 of that Distribution Calendar Year.

(c)           Life Expectancy.  Life expectancy as computed by use of the Single Life Table in Section 1.401(a)(9)-9 of the Treasury Regulations.

(d)           Participant’s Account Balance.  The Account balance as of the last Valuation Date in the calendar year immediately preceding the Distribution Calendar Year (“Valuation Calendar Year”) increased by the amount of any contributions made and allocated or forfeitures allocated to the Account balance as of dates in the Valuation Calendar Year after the Valuation Date and decreased by distributions made in the Valuation Calendar Year after the Valuation Date.  The Account balance for the Valuation Calendar Year includes any amounts rolled over or transferred to the Plan either in the Valuation Calendar Year or in the Distribution Calendar Year if distributed or transferred in the Valuation Calendar Year.

(e)           Required Beginning Date.  Required Beginning Date means April 1 of the calendar year following the later of the calendar year in which the Participant attains age

D-5

 70½ or the calendar year in which the Participant retires, except that in the case of a person described in Section 1(b)(2) of Appendix B the Required Beginning Date shall be April 1 of the calendar year following the calendar year in which the Participant attains age 70½.

SECTION 6

2009 SUSPENSION OF REQUIRED MINIMUM DISTRIBUTIONS

Notwithstanding any other provision of the Plan or this Appendix, a Participant or Designated Beneficiary who would have been required to receive required minimum distributions for 2009 but for the enactment of Code Section 401(a)(9)(H) (“2009 RMDs”), and who would have satisfied that requirement by receiving distributions that are (i) equal to the 2009 RMDs or (ii) one or more payments in a series of substantially equal distributions (that include the 2009 RMDs) made at least annually and expected to last for the life (or life expectancy) of the Participant, the joint lives (or joint life expectancy) of the Participant and the Participant’s Designated Beneficiary, or for a period of at least 10 years, will not receive those distributions for the 2009 calendar year unless the Participant or Designated Beneficiary chooses to receive such distributions.  Participants and beneficiaries described in the preceding sentence will be given the opportunity to elect to receive the distributions described in the preceding sentence.

D-6

EX-10.2

MORRISON RETIREMENT PLAN

THIS INDENTURE made on the 7th day of January, 2015, by RUBY TUESDAY, INC. a corporation organized and existing under the laws of the State of Georgia (the “Primary Sponsor”);

W I T N E S S E T H:

WHEREAS, the Primary Sponsor maintains the Morrison Retirement Plan, which was amended and restated, under an indenture dated November 1, 2004 and was amended by the First Amendment thereto dated January 9, 2007 and the Second Amendment thereto dated February 17, 2009; and

WHEREAS, the Primary Sponsor again amended and restated the Plan in its entirety, under an indenture dated October 7, 2009, to reflect the First and Second Amendments, respectively, and to update the Plan for changes required by the Pension Protection Act of 2006 and other subsequent legal changes; and

WHEREAS, the Primary Sponsor now wishes to amend and restate the Plan primarily for the purpose of resubmitting the Plan to the Internal Revenue Service for an updated favorable determination letter as a Cycle D filer; and

WHEREAS, the Primary Sponsor also wishes to amend the Plan to offer a new special window optional form of payment to certain terminated participants under the Plan who: (i) are not yet eligible or required to commence distribution of their benefits under the Plan; or (ii) are eligible to commence distribution of their benefits under the Plan but have not yet commenced distribution (or been required by the Plan) to do so; and

WHEREAS, the provisions of the Plan, as amended and restated herein, shall apply only to Plan Years (as defined in the Plan) beginning after December 31, 2014, and only with respect to participants who perform an Hour of Service (as defined in the Plan) in Plan Years beginning after December 31, 2014, except to the extent the provisions are required to apply at an earlier date or are not required to apply until a later date to comply with applicable law.

NOW, THEREFORE, the Primary Sponsor does hereby amend and restate the Plan in its entirety, generally effective as of January 1, 2015, except as otherwise provided herein, to read as follows:

MORRISON RETIREMENT PLAN

TABLE OF CONTENTS

		PAGE
SECTION 1	DEFINITIONS	1
SECTION 2	ELIGIBILITY	14
SECTION 3	FUNDING	14
SECTION 4	DEATH BENEFITS	15
SECTION 5	RETIREMENT DATES AND RETIREMENT BENEFITS	16
SECTION 6	PAYMENT OF BENEFITS ON RETIREMENT	18
SECTION 7	PAYMENT OF BENEFITS ON TERMINATION OF EMPLOYMENT OR DEATH	28
SECTION 8	ADMINISTRATION OF THE PLAN	32
SECTION 9	CLAIM REVIEW PROCEDURE	34
SECTION 10	LIMITATION OF ASSIGNMENT PAYMENTS TO LEGALLY INCOMPETENT  DISTRIBUTEE AND UNCLAIMED PAYMENTS	38
SECTION 11	PROHIBITION AGAINST DIVERSION	40
SECTION 12	LIMITATION OF RIGHTS	40
SECTION 13	AMENDMENT AND TERMINATION	40
SECTION 14	ADOPTION OF PLAN BY AFFILIATES	45
SECTION 15	RETURN OF CONTRIBUTIONS	45
SECTION 16	INCORPORATION OF SPECIAL LIMITATIONS	46
APPENDIX A	LIMITATION ON BENEFITS	A-1
APPENDIX B	TOP HEAVY PROVISIONS	B-1
APPENDIX C	ACTUARIAL EQUIVALENT FACTORS	C-1
APPENDIX D	MINIMUM DISTRIBUTION REQUIREMENTS	D-1
APPENDIX E	FACTORS	E-1

SECTION 1

DEFINITIONS

1.1“Accrued Benefit” means an annual pension expressed in the form of a single life annuity which shall be (a) in the case of a Participant who has not reached Normal Retirement Age, the portion of the benefit to which he would be entitled at Normal Retirement Date determined pursuant to Plan Section 5, based on the years of Credited Service (or Benefit Service) completed by the Participant at the date of determination, (b) in the case of a Participant who has reached Normal Retirement Age, the Participant’s benefit determined pursuant to Plan Section 5.2 and (c) in the case of a Participant who has reached his Deferred Retirement Date, the benefit determined pursuant to Plan Section 5.3.  Notwithstanding anything to the contrary contained in this Plan, no further benefit shall be accrued under this Plan on or after December 31, 1987.

Notwithstanding anything in this Section to the contrary, if the Plan’s Funding Target Attainment Percentage is less than sixty percent (60%) for any Plan Year, no benefits will accrue under the Plan for any Participant as of the valuation date for such Plan Year, unless during such Plan Year, the Plan Sponsor makes a contribution to the Trust (in addition to any minimum required contribution under Code Section 430) equal to the amount sufficient to result in a Funding Target Attainment Percentage of sixty percent (60%) or greater.  For purposes of the immediately preceding sentence, no “prefunding balance” (as defined in Code Section 430(f)(6)) or “funding standard carryover balance” (as defined in Code Section 430(f)(7)) may be used to satisfy the contribution to the Trust.

1.2“Actuarial Equivalent” means, with respect to a given benefit, any other benefit provided under the terms of the Plan which has the same present or equivalent value on the date the given benefit payment commences.  Except as otherwise specified in this Section 1.2, for the purpose of establishing whether a benefit is the Actuarial Equivalent of another benefit, the present or equivalent value of benefit payments shall be determined by the use of actuarial equivalent factors adopted by the Plan Administrator, as set forth in Appendix C of the Plan and

(a)in the case of a benefit other than in the form of a lump sum cash payment, the interest rate established by the Plan Administrator, as set forth in Appendix C to the Plan, and

(b)for purposes of calculating the present value and distributing a Participant’s Accrued Benefit in the form of a lump sum, the Actuarial Equivalent shall be determined by using the applicable interest rate for the last full month immediately preceding the first day of the Plan Year in which the date of distribution is to occur and the applicable mortality table, each as designated by the Secretary of the Treasury under Code Section 417(e)(3).

(c)In establishing the value of a lump sum payment, the benefit payable to a Participant commencing at his Normal Retirement Date shall be used, unless his termination of employment occurred after his Early Retirement Date in which case the benefit payable to the Participant at his Early Retirement Date shall be used.

1.3“Actuary” means an actuary, enrolled by the Joint Board for the Enrollment of Actuaries, selected by the Primary Sponsor to provide actuarial services for the Plan.

1.4“Affiliate” means (a) any corporation which is a member of the same controlled group of corporations (within the meaning of Code Section 414(b)) as is a Plan Sponsor, (b) any other trade or business (whether or not incorporated) under common control (within the meaning of Code Section 414(c)) with a Plan Sponsor, (c) any other organization which is a member of an affiliated service group (within the meaning of Code Section 414(m)) with a Plan Sponsor, and (d) any other entity required to be aggregated with a Plan Sponsor pursuant to regulations under Code Section 414(o).

1.5“Anniversary Date” means the first day of each Plan Year.

1.6“Annual Compensation” means the amount paid to an Employee by a Plan Sponsor (and Affiliates for purposes of Appendix B hereto) during a calendar year as wages, salaries and other amounts received for personal services actually rendered (including, but not limited to, commissions paid salesmen, compensation for services on the basis of percentage of profits, tips, bonuses and overtime), to the extent not in excess of the Annual Compensation Limit.  Income from sources outside the United States otherwise excluded from gross income under Code Section 911 shall be included in Annual Compensation.  Annual Compensation does not include contributions to this Plan or any other pension plan to which a Plan Sponsor contributes directly or indirectly, deferred compensation, stock options, and other amounts which receive special tax benefits.  Notwithstanding the above, Annual Compensation shall be determined as follows:

(a)for purposes of applying the benefit limits in Appendix A, Annual Compensation:

(1)shall be measured for the limitation year;

(2)shall include compensation paid to a Participant by the later of (A) two and one-half (2½) months after the Participant’s severance from employment with the Plan Sponsor, or (B) the end of the limitation year (within the meaning of Appendix A) that includes the date of the Participant’s severance from employment with the Plan Sponsor, if such compensation is regular compensation for services during or outside the Participant’s regular working hours, commissions, bonuses, or other similar payments and the compensation would have been paid to the Participant prior to a severance from employment if the Participant had continued in employment with the Plan Sponsor; and

-2-

(3)shall not include any other post-severance compensation;

 (b)for all purposes under the Plan, Annual Compensation shall include any amount which would have been paid during a Plan Year, but was contributed by a Plan Sponsor on behalf of an Employee pursuant to a salary reduction agreement which is not includable in the gross income of the Employee under Section 125, 132(f)(4), 402(e)(3), 402(h) or 457 of the Code;

 (c)in accordance with Code Section 414(u)(12), Annual Compensation shall include any differential wage payment (within the meaning of Code Section 3401(h)(2)) made by a Plan Sponsor to an individual who does not currently perform services for the Plan Sponsor by reason of qualified military service (within the meaning of Code Section 414(u)(5)) to the extent those payments do not exceed the amounts the individual would have received if the individual had continued to perform services for the Plan Sponsor;

(d)for purposes of Plan Section 5, no Annual Compensation paid after December 31, 1987, shall be taken into account; and

(e)notwithstanding any other provision of the Plan to the contrary, if Annual Compensation for any prior determination period is taken into account in determining a Participant’s benefit accruing in a Plan Year commencing on or after January 1, 1994, the Annual Compensation for that prior determination period shall be subject to the Annual Compensation Limit in effect for that prior determination period.  For this purpose, for determination periods beginning before the first day of the first Plan Year beginning on or after January 1, 1994, the Annual Compensation Limit shall be deemed to be $150,000.

1.7“Annual Compensation Limit” means $265,000, which amount may be adjusted in subsequent Plan Years based on changes in the cost of living as announced by the Secretary of the Treasury.  In determining any benefit accruals in Plan Years beginning after June 30, 2002, the Annual Compensation Limit for Plan Years beginning before July 1, 2002, shall be the dollar amount as previously in effect under Code Section 401(a)(17), as modified by Plan Section 1.6(e).

1.8“Appeals Fiduciary” means an individual or group of individuals appointed to review appeals of claims for benefits payable due to a Participant’s Disability made pursuant to Plan Section 9.4.

1.9“Beneficiary” means the person or trust that a Participant designated most recently in writing to the Plan Administrator, provided that, if the Participant has failed to make a designation, no person designated is alive, no trust has been established, or no successor Beneficiary has been designated who is alive, the term “Beneficiary” means (a) the Participant’s spouse or (b) if no spouse is alive, the Participant’s surviving children or (c) if no children are alive, the Participant’s parent or parents, or (d) if no parent is alive, the legal representative of 

-3-

 Participant’s estate.  The spouse of a married Participant shall be his Beneficiary unless that spouse has consented in writing to the designation by the Participant of some other person or trust, and the spouse’s consent acknowledges the effect of the election and is witnessed by a notary public.  A Participant may change his designation at any time.  However, a Participant may not change his designation without further consent of his spouse under the terms of the preceding sentence unless the spouse’s consent permits designation of another person or trust without further spousal consent and acknowledges that the spouse has the right to limit consent a specific beneficiary and a specific optional form of benefit and that the spouse voluntarily relinquishes both of these rights.  The spouse’s consent shall not be required if the Participant establishes to the satisfaction of the Plan Administrator that the spouse cannot be located, if the Participant has a court order indicating that he is legally separated or has been abandoned (within  meaning of local law) unless a qualified domestic relations order (as defined in Code Section 414(p)) provides otherwise, or if there are other circumstances as the Secretary of the Treasury prescribes.  If the spouse is legally incompetent to give consent, consent by the spouse’s legal guardian shall be deemed to be consent by the spouse.  For purpose of this Section 1.9, an individual shall be the spouse of a Participant only if the individual was married to the Participant during the one year period ending on the earlier of the Participant’s death or the date on which payment of benefits commences.

1.10“Break in Service” means the failure of an Employee, in connection with a termination of employment other than by reason of death or attainment of a Retirement Date, to complete more than 500 Hours of Service in any calendar year.

1.11“Code” means the Internal Revenue Code of 1986, as amended.

1.12“Credited Service” means (a) a year or a fractional part thereof, prior to July 1, 1985, for which a Participant received credit towards pension benefits in accordance with the applicable provisions of the Plan in effect before July 1, 1985 and (b) each calendar year on or after July 1, 1985 during which an Employee has completed no less than 1,000 Hours of Service.  In the event an Employee becomes a Participant or resumes active participation on other than January 1, following a period of authorized leave of absence not exceeding 24 months or a Break in Service or in the event a Participant retires or otherwise terminates employment on other than December 31, he shall receive Credited Service for such calendar year regardless of whether he has completed 1,000 Hours of Service during such calendar year.

Notwithstanding anything to the contrary contained in the Plan, no Credited Service shall be granted to a Participant for any period of employment with a Plan Sponsor or Affiliate on or after December 31, 1987.

1.13“Deferred Retirement Date” means the first day of the month coinciding with or next following the earlier of the date subsequent to the Participant’s Normal Retirement Age (a) on which a Participant actually retires or (b) on which his employment ceases to be substantial.  For this purpose, a Participant’s employment will be substantial for a calendar month if he

-4-

performs forty or more Hours of Service (except for Hours of Service credited as a result of back pay) in such month.

1.14“Direct Rollover” means a payment by the Plan to the Eligible Retirement Plan specified by the Distributee.

1.15“Disability” means a physical or mental condition arising after the original date of employment of the Participant which totally and permanently prevents the Participant from engaging in any gainful occupation or employment with a Plan Sponsor. The determination as to whether a Participant is totally and permanently disabled shall be made by the Plan Administrator based (a) on medical evidence by a licensed physician designated by the Plan Administrator; (b) on evidence that the Participant is eligible for disability benefits under any long-term disability plan sponsored by the Plan Sponsor; or (c) on evidence that the Participant is eligible for disability benefits under the Social Security Act.

1.16“Disability Retirement Date” means the first day of the calendar month coinciding with or next following the date the Participant attains age 65.

1.17“Distributee” means an Employee or former Employee.  In addition, the Employee’s or former Employee’s surviving spouse and the Employee’s or former Employee’s spouse or former spouse who is the alternate payee under a qualified domestic relations order, as defined in Code Section 414(p), are Distributees with regard to the interest of the spouse or former spouse.  Effective for distributions made on and after January 1, 2008, a non-spouse Beneficiary of a deceased Participant who is either an individual or an irrevocable trust, where the beneficiaries of such trust are identifiable and the trustee provides the Plan Administrator with a final list of trust beneficiaries or a copy of the trust document by October 31 of the year following the Participant’s death, shall be a Distributee with regard to the interest of the deceased Participant, but only if the Eligible Rollover Distribution is transferred in a direct trustee-to-trustee transfer to an Eligible Retirement Plan which is an individual retirement account described in Code Section 408(a) or an individual retirement account described in Code Section 408(b) (other than an endowment contract).

1.18“Early Retirement Age” means the date on which the Participant has attained age 55 and has completed five (5) years of Credited Service.

1.19“Early Retirement Date” means the first day of the calendar month coinciding with or next following the date the Participant retires after reaching his Early Retirement Age but prior to his Normal Retirement Date.

1.20“Eligibility Service” means the completion by an Employee of no less than 1,000 Hours of Service in the twelve-consecutive-month period beginning on the date on which the Employee first performs an Hour of Service upon his employment or reemployment with a Plan Sponsor, or, in the event an Employee fails to complete 1,000 Hours of Service in that twelve-consecutive-month period, the completion of no less than 1,000 Hours of Service in any calendar year thereafter, including the calendar year which includes the first anniversary of the date the

-5-

Employee first performed an Hour of Service upon his employment or reemployment.  Notwithstanding anything contained herein to the contrary, Eligibility Service shall not include:

(a)in the case of a Participant who has a Break in Service, all years prior to the calendar year in which the Break in Service commences which would otherwise constitute Eligibility Service until the Employee completes one year of Eligibility Service subsequent to his date of reemployment; and

(b)in the case of a Participant who does not have any vested rights under Plan Section 7, all service during calendar years which would otherwise constitute Eligibility Service before the calendar year in which the first of five consecutive Breaks in Service commences if the number of consecutive calendar years in which the Participant incurs a Break in Service equals or exceeds the greater of five or the prior aggregate number of the calendar years before the calendar year in which the Break in Service commenced.

1.21“Eligible Employee” means any Employee of a Plan Sponsor other than an Employee (a) who is covered by a collective bargaining agreement between a union and a Plan Sponsor provided that retirement benefits were the subject of good faith bargaining, unless the collective bargaining agreement provides that the Employee shall be eligible to participate in the Plan, (b) a leased employee within the meaning of Code Section 414(n)(2), or (c) any other individual who is deemed to be an Employee of a Plan Sponsor pursuant to regulations under Code Section 414(o).  In addition, no person who is initially classified by a Plan Sponsor as an independent contractor for federal income tax purposes shall be regarded as an Eligible Employee for that period, regardless of any subsequent determination that any such person should have been characterized as a common law employee of the Plan Sponsor for the period in question.

1.22“Eligible Retirement Plan” means any of the following that will accept a Distributee’s Eligible Rollover Distribution:

(a)     an individual retirement account described in Code Section 408(a);

(b)     an individual retirement annuity described in Code Section 408(b) (other than an endowment contract);

(c)     an annuity plan described in Code Section 403(a) or an annuity contract described in Code Section 403(b), unless the Distributee is a non-spouse Beneficiary of a deceased Participant;

(d)     a qualified trust described in Code Section 401(a), unless the Distributee is a non-spouse Beneficiary of a deceased Participant;

(e)     an eligible plan under Code Section 457(b) which is maintained by a state or political subdivision of a state, or any agency or instrumentality of a state or political

-6-

subdivision and which agrees to separately account for amounts transferred into such plan from this Plan, unless the Distributee is a non-spouse Beneficiary of a deceased Participant; or

(f)    effective January 1, 2008, to the extent permitted and in accordance with the rules applicable under Code Section 408A, a Roth individual retirement account described in Code Section 408A, unless the Distributee is a non-spouse Beneficiary of a deceased Participant.

If any portion of an Eligible Rollover Distribution is attributable to payments or distributions from a designated Roth account (as defined in Code Section 402A), an Eligible Retirement Plan with respect to such portion shall include only another designated Roth account and a Roth IRA.

1.23“Eligible Rollover Distribution” means any distribution of all or any portion of the Distributee’s Accrued Benefit,

  (a)including any portion of the distribution that is not includable in gross income provided such amount is distributed directly to one of the following:

  (1)an individual retirement account described in Code Section 408(a) or an individual retirement annuity described in Code Section 408(b) (other than an endowment contract); or

  (2)      a qualified trust as described in Code Section 401(a) but only to the extent that

(A)the distribution is made in a direct trustee-to-trustee transfer;

(B)the transferee plan agrees to separately account for amounts transferred (including a separate accounting for the portion of the distribution which is includable in income and the portion which is not includable in income); and

(b)     excluding:

(1)any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the Distributee or the joint lives (or joint life expectancies) of the Distributee and the Distributee’s designated Beneficiary, or for a specified period of ten (10) years of more;

(2)any distribution to the extent such distribution is required under Code Section 401(a)(9);

-7-

(3)except as otherwise provided in this Section, the portion of any distribution that is not includable in gross income (determined without regard to the exclusions for net unrealized appreciation with respect to employer securities); or

(4)if the Distributee is a non-spouse Beneficiary of a deceased Participant, any distribution other than a direct trustee-to-trustee transfer to an individual retirement account described in Code Section 408(a) or an individual retirement annuity described in Code Section 408(b) (other than an endowment contract).

1.24     “Employee” means any person who is employed by a Plan Sponsor or an Affiliate for purposes of the Federal Insurance Contributions Act, who is a leased employee within the meaning of Code Section 414(n)(2) with respect to a Plan Sponsor, or who is deemed to be an employee of a Plan Sponsor pursuant to regulations under Code Section 414(o).

1.25“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

1.26“Fiduciary” means each Named Fiduciary and any other person who exercises or has any discretionary authority or control regarding management or administration of the Plan, any other person who renders investment advice for a fee or has any authority or responsibility to do so with respect to any assets of the Plan or any other person who exercises or has any authority or control respecting management or disposition of assets of the Plan.

1.27“Fund” means the amount of the cash and other property held by the Trustee pursuant to the Plan.

1.28“Funding Target Attainment Percentage” means, for a Plan Year, the ratio (expressed as a percentage) which:

(a)the value of Plan assets for the Plan Year, reduced by any prefunding balance (as defined in Code Section 430(f)(6)) and any funding standard carryover balance (as defined in Code Section 430(f)(7)), bears to

(b)the present value of all benefits accrued or earned under the Plan as of the beginning of the Plan Year.

Notwithstanding the foregoing, (1) the amounts in Subsections (a) and (b) of this Section shall be increased by the aggregate amount of purchases of annuities for Employees other than highly compensated employees (within the meaning of Code Section 414(q)) which were made by the Plan during the two Plan Years preceding the year for which the Funding Target Attainment Percentage is being determined, and (2) the amount in Subsection (a) shall be increased by any security provided by a Plan Sponsor consisting of (A) a bond issued by a corporate surety company that is an acceptable surety for purposes of Section 412 of ERISA, (B)

-8-

cash, or United States obligations which mature in 3 years or less, held in escrow by a bank or similar financial institution, or (C) such other form of security as is satisfactory to the Secretary of the Treasury and the parties involved.

1.29“Hour of Service” means:

(a)Each hour for which an Employee is paid, or entitled to payment, for the performance of duties for a Plan Sponsor or any Affiliate during the applicable computation period, and such hours shall be credited to the computation period in which the duties are performed;

(b)Each hour for which an Employee is paid, or entitled to payment, by a Plan Sponsor or any Affiliate on account of a period of time during which no duties are performed (irrespective of whether the employment relationship has terminated) due to vacation, holiday, illness, incapacity (including disability), layoff, jury duty, military duty or leave of absence, and such hours shall be credited in accordance with the provisions of Section 2530.200b-2(b) and (c) of the U.S. Department of Labor Regulations or such other federal regulations as may from time to time be applicable.

(c)Each hour for which back pay, irrespective of mitigation of damages, is either awarded or agreed to by a Plan Sponsor or any Affiliate, and such hours shall be credited to the computation period or periods to which the award or agreement for back pay pertains rather than to the computation period in which the award, agreement or payment is made; provided, that the crediting of Hours of Service for back pay awarded or agreed to with respect to periods described in Subsection (b) of this Section shall be subject to the limitations set forth in Subsection (d).

(d)Solely for purposes of determining whether a Break in Service has occurred, each hour during any period that the Employee is absent from work (1) by reason of the pregnancy of the Employee, (2) by reason of the birth of a child of the Employee, (3) by reason of the placement of a child with the Employee in connection with the adoption of the child by the Employee, or (4) for purposes of caring for a child for a period immediately following its birth or placement.  The hours described in this Subsection (d) shall be credited (A) only in the computation period in which the absence from work begins, if the Employee would be prevented from incurring a Break in Service in a year solely because of the credit, or (B), in any other case, in the next following computation period.  In no event shall an Employee be credited with more than 501 Hours of Service during any single continuous period during which he performs no duties for the Plan Sponsor or an Affiliate.

(e)In the case of Hours of Service to be credited to an Employee in connection with a period of no more than thirty-one days which extends beyond one computation period, all such Hours of Service may be credited to either the first or second computation period.

-9-

(f)Hours of Service for hourly paid Employees shall be determined from the records of hours worked or hours for which payment is made or owing.

(g)Hours of Service for Employees other than hourly Employees shall be determined on the assumption that each Employee has completed one hundred ninety (190) Hours of Service during each month he would be required to be credited with at least one (1) Hour of Service during such month.

(h)Without duplication of Hours of Service counted pursuant to Subsection (d) hereof and solely for purposes as required by the Family and Medical Leave Act of 1993 and the regulations thereunder (the “Act”), each hour (as determined pursuant to the Act) for which an Employee is granted leave under the Act (1) for the birth of a child, (2) for placement with the Employee of a child for adoption or foster care, (3) to care for the Employee’s spouse, child or parent with a serious health condition or (4) for a serious health condition that makes the Employee unable to perform the functions of Employee’s job.

(i)For purposes of determining an Employee’s eligibility to participate and vesting, Hours of Service shall include Hours of Service with a company heretofore or hereafter merged or consolidated or otherwise absorbed by a Plan Sponsor, or all or a substantial part of whose assets or business have been or shall be acquired by a Plan Sponsor (hereafter a “Predecessor Company”):

(1)if a Plan Sponsor continues to maintain a pension plan of such Predecessor Company; or

(2)if, and to the extent, such employment with the Predecessor Company is required to be treated as employment with a Plan Sponsor under regulations prescribed by the Secretary of the Treasury; or

(3)if, and to the extent, granted by the board of directors of a Plan Sponsor in its sole discretion effected on a non-discriminatory basis as to all persons similarly situated consistent with Code Section 401(a)(4) and the Treasury Regulations promulgated thereunder.

(j)For purposes of determining a Participant’s benefit, Hours of Service may also include Hours of Service with a Predecessor Company to the extent granted by the board of directors of the Primary Sponsor in its sole discretion, effected on a non-discriminatory basis as to all persons similarly situated consistent with Code Section 401(a)(4) and the Treasury Regulations promulgated thereunder.

(k)Hours of Service will be credited with respect to qualified military service in accordance with Code Section 414(u) and applicable Treasury regulations promulgated thereunder.

-10-

1.30“Investment Committee” means a committee which may be established to direct the Trustee with respect to investments of the Fund.

1.31“Investment Manager” means a Fiduciary, other than the Trustee, the Plan Administrator or a Plan Sponsor, which may be appointed by the Primary Sponsor:

(a)who has the power to manage, acquire, or dispose of any assets of the Fund or a portion thereof; and

(b)who is

(1)is registered as an investment adviser under the Investment Advisors Act of 1940;

(2)is not registered as an investment adviser under such Act by reason of paragraph (1) of Section 203A(a) of such Act, is registered as an investment adviser under the laws of the State (referred to in paragraph (1) of Section 203A(a) of such Act) in which it maintains its principal office and place of business, and, at the time the Fiduciary last filed the registration form most recently filed by the Fiduciary with such State in order to maintain the Fiduciary’s registration under the laws of such State, also filed a copy of such form with the Secretary of Labor;

(3)is a bank, as defined in such Act; or

(4)is an insurance company qualified to perform investment advisory services under the laws of more than one state; and

(c)who has acknowledged in writing that he is a Fiduciary with respect to the Plan.

1.32“Named Fiduciary” means only the following:

(a)the Plan Administrator;

(b)the Trustee;

(c)the Investment Committee;

(d)the Investment Manager; and

(e)the Appeals Fiduciary.

-11-

1.33“Normal Fund Payment” means:

(a)In the case of a Participant who is not married on the date payments to the Participant are to commence under the terms of the Plan, a single life annuity, payable in monthly installments;

(b)In the case of a Participant who is married on the date payments are to commence under the terms of the Plan, a joint and survivor annuity, payable in monthly installments, which is an immediate annuity for the life of the Participant with a survivor annuity for the life of his spouse which is fifty percent (50%) of the amount of the annuity payable during the joint lives of the Participant and his spouse and which is the Actuarial Equivalent of a single life annuity;

(c)In the case of a Participant who dies while married before payments are to commence under the terms of the Plan, an immediate single life annuity, payable in monthly installments for the life of his spouse, which is fifty percent (50%) of the amount of the annuity which would have been payable during the joint lives of the Participant and his spouse and which is the Actuarial Equivalent of a single life annuity if:

  (1)In the case of a Participant who dies on or after the date on which the Participant attains the earliest retirement age under the Plan, the Participant had retired with a Normal Fund Payment on the date of his death; or

  (2)In the case of a Participant who dies before the date on which the Participant would have attained the earliest retirement age under the Plan, the Participant had:

(A)Separated from service on his date of death (unless the Participant had earlier separated from service);

(B)Survived to the earliest retirement age under the Plan;

(C)Retired with a Normal Fund Payment at the earliest retirement age under the Plan; and

(D)Died on the day after the date on which he would have attained the earliest retirement age under the Plan.

(d)Notwithstanding anything contained in this Section, if the Actuarial Equivalent of the Participant’s vested Accrued Benefit, expressed as a lump sum payment, is $5,000 or less, a lump sum payment in cash.

In the event of a mandatory distributiongreater than $1,000, if the Participant does not elect, in accordance with Plan Sections 6.2(d) and 6.2(e), to have such

-12-

distribution paid directly to an Eligible Retirement Plan specified by the Participant in a direct rollover, or consent to receive the distribution directly, then the Plan Administrator may elect to leave the Participant’s Accrued Benefit in the Plan until the earlier of (i) the Participant’s Normal Retirement Date, or (ii) the time the Plan Administrator pays the distribution in a direct rollover to an individual retirement plan designated by the Plan Administrator.

Any annuity may be purchased from an insurance company designated by the Plan Administrator in writing to the Trustee, and may be distributed to the Participant, his spouse or his Beneficiary, as the case may be.  The distribution shall be in full satisfaction of the benefits to which the Participant, his spouse or his Beneficiary is entitled under the Plan.

1.34“Normal Retirement Age” means the date on which the Participant has attained age 65 and has completed five (5) years of Credited Service, or in the case of an Employee who becomes a Participant after age 60, the fifth anniversary of the date on which he becomes a Participant.

1.35“Normal Retirement Date” means the first day of the month coinciding with or next following the date on which a Participant attains Normal Retirement Age and actually retires.

1.36“Participant” means any Employee or former Employee who has become a participant pursuant to Plan Section 2 and who has not received a full distribution from the Plan of his Accrued Benefit.

1.37“PBGC” means the Pension Benefit Guaranty Corporation.

1.38“Plan” means the Morrison Retirement Plan.

1.39“Plan Administrator” means the Primary Sponsor or any person designated by the Primary Sponsor to serve in this capacity.

1.40“Plan Sponsor” means individually the Primary Sponsor and each Affiliate or other entity which has adopted the Plan.

1.41“Plan Year” means the period commencing July 1 and ending June 30 each Year.

1.42“Primary Sponsor” means Ruby Tuesday, Inc. or its successor in interest.

1.43“Qualified Optional Survivor Annuity” means a joint and survivor annuity elected under Section 6.2(b) (which is the Actuarial Equivalent of the Participant’s vested Accrued Benefit and as to which the Participant’s spouse is his Beneficiary), payable in monthly installments, which is an immediate annuity for the life of the Participant with a survivor annuity for the life of his spouse which is 75% of the amount of the annuity payable during the joint lives of the Participant and his spouse.

-13-

1.44“Retirement Date” means Normal Retirement Date, Early Retirement Date, Deferred Retirement Date or Disability Retirement Date.

1.45“Social Security Maximum Taxable Wage Base” means the maximum taxable wage base under Code Section 3121(a)(1) as of the Participant’s termination of employment expressed as an annual amount.

1.46“Trust” means the trust established under an agreement between the Primary Sponsor and the Trustee to hold the Fund.

1.47“Trustee” means the trustee under the Trust.

1.48“Vesting Service” means each calendar year during which an Employee has completed no less than 1,000 Hours of Service.  Notwithstanding anything contained herein to the contrary, Vesting Service shall not include service in years prior to the calendar year in which the Employee attained age 18.

SECTION 2

ELIGIBILITY

2.1General Rule. Each Eligible Employee shall become a Participant as of the January 1 or the July 1 following the later of (a) the date on which the Employee completes his Eligibility Service or (b) attains age 21.

2.2Re-employment. Each former Participant who is vested in all or a portion of his Accrued Benefit and who is reemployed by a Plan Sponsor shall become a Participant as of the date of his reemployment.

2.3Frozen Status. Notwithstanding the foregoing Sections 2.1 and 2.2, an Eligible Employee who is not a Participant in the Plan on December 31, 1987 shall not become a Participant thereafter.

2.4Military Service Credit. Notwithstanding any provision of the Plan to the contrary, contributions, benefits and service credit with respect to qualified military service will be provided in accordance with Section 414(u) of the Code.

SECTION 3

FUNDING

3.1(a)           Minimum Funding.  It is the Primary Sponsor’s intention that unless a waiver of the minimum funding standards described in ERISA Section 302 or Code Section 412 is obtained, each Plan Sponsor shall contribute to the Fund such amounts as are determined by the Actuary to be necessary to fund the benefits provided under the

-14-

Plan.  For this purpose, the Plan Administrator shall establish funding standards for the Plan, which shall be maintained by the Actuary, who will be responsible for determining that such standards meet the funding requirements described in ERISA Section 302, Code Section 412, and Code Section 430.

  (b)Forfeitures.  All forfeitures arising under the Plan shall be used to reduce the cost of the Plan and shall not be used to increase any benefits payable under the Plan.

  (c)Additional Funding.  Notwithstanding the other provisions of this Section 3.1, each Plan Sponsor shall have the right, but not the obligation, to contribute such additional amounts as it, in its sole discretion, deems necessary or desirable to maintain the actuarial soundness of the Plan, and a Plan Sponsor shall also have the right at any time to discontinue contributions hereunder.

3.2No Contributions by Participants. No contributions by Participants shall be required or permitted under the Plan.

3.3Waiver of Plan Sponsor Contributions.  Notwithstanding anything herein to the contrary, contributions by a Plan Sponsor may be waived in whole or in part in any Plan Year during which a substantial business hardship has been sustained, as determined in writing by the Secretary of the Treasury pursuant to Code Section 412.

3.4Deductibility.  All contributions to the Plan by a Plan Sponsor are made subject to the condition that such contributions are fully deductible for federal income tax purposes under Code Section 404.

SECTION 4

DEATH BENEFITS

4.1Death Benefits of a Participant in Pay Status. Upon the death of a Participant who is receiving payment in the form of a Normal Fund Payment under Plan Section 1.33(b), or who is receiving an alternate form of payment under Plan Section 6.2(b), the Beneficiary or joint annuitant shall receive any benefit which is then payable to the Beneficiary or joint annuitant.

4.2Death Benefits of Married Participant not in Pay Status. If the Participant dies while married after becoming vested pursuant to Plan Section 7.2, but before the commencement of payments under the Plan, the Participant’s surviving spouse shall receive as a death benefit a Normal Fund Payment described under Plan Section 1.33(c).

4.3Form of Payment.  Any benefit payable under this Section 4 shall be paid in accordance with the provisions of Plan Section 6 or Section 7, whichever is applicable, after receipt by the Trustee from the Plan Administrator of due notice of the death of the Participant.

-15-

4.4Other Distribution Rules Applicable.  Any annuity may be purchased from an insurance company designated by the Plan Administrator in writing to the Trustee and may be distributed to the spouse.  The distribution, if any, shall be in full satisfaction of the benefits to which the spouse is entitled under the Plan.  Any benefit payable under this Article 4 shall be paid in accordance with and subject to the provisions of Article 7 after receipt by the Trustee from the Plan Administrator of due notice of the death of the Participant.

4.5Certain Death Benefits for Qualifying Military Personnel.  In the case of a Participant who dies while performing qualified military service (as defined in Code Section 414(u)), the survivors of the Participant are entitled to any additional benefits (other than benefit accruals relating to the period of qualified military service) provided under the Plan had the Participant resumed and then terminated employment on account of death..

SECTION 5

RETIREMENT DATES AND RETIREMENT BENEFITS

5.1Early Retirement Date.  Each Participant who reaches his Early Retirement Age while an Employee shall be entitled to retire as of that date.  A pension shall be payable to the Participant as of his Early Retirement Date which shall be determined in a similar manner as the pension payable pursuant to Plan Section 5.2 is determined, but based on his years of Credited Service (and Benefit Service) as of his Early Retirement Date.  Such pension shall commence on either (a) his Early Retirement Date or on the first day of any month thereafter, as selected by the Participant, in which event such pension shall be reduced by the applicable factors pursuant to Plan Section 1.2 for each year by which the commencement of such pension precedes the Participant’s Normal Retirement Date; or (b) his Normal Retirement Date.  The pension shall be payable pursuant to Plan Section 6.

5.2Normal Retirement.  Each Participant who reaches his Normal Retirement Age while an Employee shall be entitled to retire as of that date.  A pension shall be payable to a Participant as of his Normal Retirement Date which shall be the sum of his Future Service Retirement Income as determined pursuant to Subsection (a) of this Section and his Past Service Retirement Income as determined pursuant to Subsection (b) of this Section.  The pension shall be payable pursuant to Plan Section 6.

  (a)Subject to the provisions of Plan Section 1.1, for each year of Credited Service commencing on or after January 1, 1986 and prior to his Normal Retirement Date, a Participant’s Future Service Retirement Income shall be an annual amount equal to the sum of (1) .25% of the Participant’s Annual Compensation not in excess of the Social Security Maximum Taxable Wage Base and (2) 1.25% of the Participant’s Annual Compensation in excess of the Social Security Maximum Taxable Wage Base.  In no event will the pension payable hereunder be less than thirty-six dollars ($36.00) multiplied by the Participant’s years of Credited Service commencing on or after January 1, 1986.

-16-

  (b)The annual Past Service Retirement Income of a Participant as of January 1, 1986 shall be equal to the greatest of the following:

(1)the sum of (A) .25% of the Participant’s High Five-Year Average Compensation which is not in excess of $14,400 and (B) 1.25% of the High Five-Year Average Compensation in excess of $14,400, both multiplied by the Participant’s years   of Benefit Service (as defined below) as of January 1, 1986.

(2)Thirty-six dollars ($36.00) multiplied by the Participant’s years of Benefit Service as of January 1, 1986.

(3)The retirement income the Participant had accrued as of January 1, 1986 under the provisions of the Plan in effect as of that date.

For purposes of this Section 5.2(b), a Participant’s High Five-Year Average Compensation shall mean the annual average of a Participant’s total compensation (including Annual Compensation, overtime, and bonuses but excluding non-recurring components of compensation identified by the board of directors of the Primary Sponsor) for the five consecutive calendar years beginning in 1976 during which the Participant participated in the Plan which produces the highest average, or if the Participant has less than five years of Plan participation as of January 1, 1986, any lesser number of consecutive calendar years in which the Participant participated in the Plan.  “Benefit Service” shall mean completed calendar years of service and calendar months of service until January 1, 1986.

5.3Deferred Retirement.  A Participant may remain an Employee after his Normal Retirement Age.  The pension payable to a Participant who retires as of his Deferred Retirement Date shall be determined in a similar manner as the pension payable pursuant to Section 5.2 of the Plan is determined but based on his years of Credited Service (and Benefit Service) as of his Deferred Retirement Date.  The pension shall commence as of his Deferred Retirement Date, and shall be payable in accordance with Plan Section 6.

5.4Disability Retirement.  If a Participant shall become subject to a Disability while in the employ of a Plan Sponsor, the Participant shall be entitled to receive a pension commencing as of his Disability Retirement Date.  The pension payable under this Section 5.4 shall be determined in a similar manner as the pension paid pursuant to Section 5.2 is determined.  However, during the period the Participant receives a Social Security disability benefit, the Participant shall accrue an additional pension pursuant to Section 5.2(b) based on the assumptions that (1) the rate of his total compensation within the meaning of Plan Section 5.2(b) during the period of Disability is the same as was in effect on the date his Disability commenced, and (2) the Participant completed 190 Hours of Service during each month of Disability.  Such pension shall be payable pursuant to Plan Section 6.  If prior to his Normal Retirement Date a Participant ceases to be subject to a Disability at any time after his Early Retirement Date and does not resume active employment with a Plan Sponsor, he shall be entitled to receive a pension commencing on the first day of the month following the date on

-17-

which he ceases to be subject to a Disability.  The amount payable shall be determined in a similar manner as the pension paid pursuant to Plan Section 5.1 is determined, but based on the pension he had accrued on the date he ceased to be subject to a Disability.  If a Participant ceases to be subject to a Disability before his Early Retirement Date, but after he has completed at least five (5) years of Vesting Service, he shall be entitled to receive a pension determined in a similar manner as the pension paid pursuant to Plan Section 7 is determined, but based on the pension he has accrued as of the date he ceased to be subject to a Disability.

SECTION 6

PAYMENT OF BENEFITS ON RETIREMENT

6.1Timing of Payment.  The Accrued Benefit of a Participant who has attained his Retirement Date or has attained Normal Retirement Age shall become fully vested.  As of a Participant’s Retirement Date, he shall be entitled to his Accrued Benefit which shall be paid in accordance with this Plan Section 6.  Payments to a Participant shall commence no later than sixty (60) days after the end of the Plan Year in which the Participant’s Normal Retirement Date or Deferred Retirement Date occurs; provided, however, if the amount of the payment required to commence on a given date cannot be ascertained by that date, payment shall commence retroactively to that date and shall commence no later than sixty (60) days after the earliest date on which the amount of the payment can be ascertained under the Plan.  A Participant who attains Normal Retirement Age but who has not terminated employment may request that payment of his Accrued Benefit commence as of the first day, of any month following the date the Participant attains his Normal Retirement Age.

6.2Form of Payment.

  (a)Any pension payable pursuant to the Plan shall be in the form of a Normal Fund Payment unless the Actuarial Equivalent of the Participant’s vested Accrued Benefit, expressed as a lump sum payment, exceeds $5,000 at the time he or his Beneficiary is entitled to the commencement of payments and he elects, during the applicable election period, not to receive the Normal Fund Payment by execution and delivery to the Plan Administrator of a form provided for that purpose by the Plan Administrator.  For purposes of this Section, the term “applicable election period” shall mean, with respect to a Normal Fund Payment described in Subsection (a) or (b) of Plan Section 1.33, the 180 day period ending on the first date on which the Participant is entitled to payment, and with respect to a Normal Fund Payment described in Subsection (c) of Plan Section 1.33, the period which begins on the first day of the Plan Year during which an Eligible Employee becomes a Participant and which ends on the Participant’s death.  In the case of a married Participant, no election, other than the election of a Qualified Optional Survivor Annuity, shall be effective unless spousal consent is obtained in accordance with the provisions of Plan Section 1.9.

-18-

If an election is made, the Participant’s Accrued Benefit shall be paid in the form set forth in Subsection (b) of this Section chosen by the Participant by written instrument delivered to the Plan Administrator prior to the date payments are otherwise to commence.  Any waiver of a Normal Fund Payment under this Subsection (a), made prior to the first day of the Plan Year in which the Participant attains age 35 shall become invalid as of the first day of the Plan Year in which the Participant attains age 35, and provisions of this Subsection (a) shall apply unless a new waiver is obtained.

(b)The alternate forms of payment are:

  (1)In the case of a Participant who retires as of his Early Retirement Date, a life annuity providing for monthly payments for the life of the Participant which shall be payable in a greater amount or in full during the period before he becomes eligible for his old age Social Security benefits and, if applicable, a reduced amount after he becomes eligible for old age Social Security benefits.  The adjusted pension to which the Participant is entitled under the Plan and under Social Security shall be as uniform as possible before and after the Participant becomes eligible for old age Social Security benefits;

  (2)A 100/50 percent joint and survivor annuity, providing for monthly payments, the value of which shall be the Actuarial Equivalent of the Participant’s Accrued Benefit as of the date on which he is entitled to commencement of payment.  This is an actuarially reduced pension payable to and during the lifetime of the Participant with the provision that, after his death, a pension equal to fifty percent (50%) of his reduced pension shall be payable to and during the lifetime of the joint annuitant selected by the Participant;

  (3)A 100/75 percent joint and survivor annuity providing for monthly payments, the value of which shall be the Actuarial Equivalent of the Participant’s Accrued Benefit as of the date on which he is entitled to the commencement of payment.  This is an actuarially reduced pension payable to and during the lifetime of the Participant with the provision that, after his death, a pension equal to seventy five percent (75%) of his reduced pension shall be payable to and during the lifetime of the joint annuitant selected by the Participant.  If the joint annuitant is the Participant’s spouse, then this form of payment is a Qualified Optional Survivor Annuity;

  (4)A 100/100 percent joint and survivor annuity providing for monthly payments, the value of which shall be the Actuarial Equivalent of the Participant’s Accrued Benefit on the date on which he is entitled to commencement of payment.  This is an actuarially reduced pension payable to and during the lifetime of the Participant with the provision that after his death a pension at the rate of one hundred percent (100%) of his reduced pension shall

-19-

be payable to and during the lifetime of the joint annuitant selected by the Participant;

  (5)A life annuity providing for monthly payments for the life of the Participant with a guaranteed term certain of ten (10) or twenty (20) years as specified by the Participant the value of which shall be the Actuarial Equivalent of the Participant’s Accrued Benefit as of the date on which he is entitled to commencement of payment; and

  (6)If the Actuarial Equivalent of the Participant’s vested Accrued Benefit, expressed as a lump sum payment, is $7,500 or less, a lump sum payment in cash.

If a Participant dies before expiration of the guaranteed period certain, payment shall be continued to a Beneficiary who may elect to receive a single lump sum payment.  If the Beneficiary should die after having received at least one payment, any further payments shall be made to any alternate Beneficiary designated by the Participant, or in the absence of a surviving alternate Beneficiary, to the estate of the last surviving Beneficiary, in a single lump sum.

(c)The election of an alternate form of payment under Subsection (b)(2), (3) or (4) shall be invalid if the Participant or his joint annuitant dies before the date on which the monthly payments are to commence.  The election of the alternate form of payment under Subsection (b)(5) shall be invalid if the Participant dies before the date on which the monthly payments are to commence. In all such cases, monthly payments, if any, shall be payable in the form of a Normal Fund Payment.

(d)The Plan Administrator shall furnish to the Participant a written explanation of:

(1)the terms and conditions of the Normal Fund Payment, including a general description of the conditions and eligibility and other material features of the alternate forms of payment under the Plan,

(2)the Participant’s right to make, and the effect of, an election not to receive the Normal Fund Payment, including a general description of the conditions of eligibility and other material features of the alternate forms of payment under the Plan,

(3)the rights of the Participant’s spouse as described in Subsection (a) of this Section, and

(4)the right to make, and the effect of, a revocation of an election pursuant to this Section.

-20-

  (e)In the case of a Normal Fund Payment described in subsection (a) or (b) of Plan Section 1.33, the written explanation shall be provided to the Participant not more than 180 days prior to the first date on which he is entitled to payment and not less than 30 days prior to such date, provided that if:

    (1)the Plan Administrator clearly informs the Participant that the Participant has a right to a period of at least 30 days after receiving the notice to consider the decision of whether or not to elect a distribution and a particular distribution option; and

    (2)the Participant and, if spousal consent is otherwise required by the provisions of this Plan, the spouse of the Participant, after receiving the notice, affirmatively waive the 30-day period;

then the distribution may be made as soon as practicable but no sooner than the eighth day after the explanation is provided to the Participant.

In the case of a Normal Fund Payment described in Subsection (c) of Plan Section 1.33, the written explanation shall be provided to the Participant in whichever of the following periods ends last:

    (3)the period beginning on the first day of the Plan Year in which the Participant attains age 32 and ending on the last day of the Plan Year preceding the Plan Year in which the Participant attains age 35;

    (4)the period beginning one year before and ending one year after the Employee first becomes a Participant; or

    (5)the period beginning one year before and ending one year after the provisions of this Subsection become applicable to the Participant.

In the case of a Participant who separates from service before attaining age 35, the written explanation shall be provided in the period beginning one year before and ending one year after separation from service occurs.

(f)The Participant may revoke any election not to receive payment in the form of a Normal Fund Payment at any time prior to commencement of payments, and may make a new election at any time prior to the commencement of payments.

6.3No Distribution Prior to Normal Retirement Age Without Consent. Notwithstanding any other provision of the Plan to the contrary, if the Actuarial Equivalent of a Participant’s vested Accrued Benefit exceeds $5,000, it shall not be distributed prior to the Participant’s Normal Retirement Age (or, if later, termination of employment)  without the written consent of the Participant and, if the Participant is married, his spouse (or if the Participant is deceased, his surviving spouse).  However, in the event of a mandatory

-21-

distribution that is greater than $1,000, if the Participant does not elect, in accordance with Plan sections 6.2(d) and 6.2(e), to have such distribution paid directly to an Eligible Retirement Plan specified by the Participant in a direct rollover, or consent to receive the distribution directly, then the Plan Administrator may elect to leave the Participant’s Accrued Benefit in the Plan until the earlier of (i) the Participant Normal Retirement Date, or (ii) the time the Plan Administrator pays the distribution in a direct rollover to an individual retirement plan designated by the Plan Administrator.

6.4Annuity Starting Date. Payments under the Normal Fund Payment shall be determined according to the amount of the Accrued Benefit of the Participant on the date on which the Participant is entitled to commencement of payments, i.e. the annuity starting date.

6.5Required Minimum Distributions. Notwithstanding any other provisions of the Plan, distributions will be made in accordance with the requirements of Code Section 401(a)(9), including the minimum distribution incidental benefit requirements, as administered in accordance with the requirements of Appendix D hereto.

6.6Rehires; Suspension of Benefits.

  (a)For purposes of Sections 6 and 7, if a Participant is reemployed by a Plan Sponsor after the payment of his pension has commenced or if the Participant continues to be employed by a Plan Sponsor after his Normal Retirement Date, the payment of that portion of his pension attributable to contributions by Plan Sponsors shall be suspended for each month during which he performs substantial service for a Plan Sponsor.  For purposes of this Section, a Participant will be deemed to perform substantial service for a calendar month if he or performs forty (40) or more Hours of Service (except for Hours of Service credited as a result of back pay) in such month.

  (b)The payment of a pension which has been suspended shall resume no later than the first day of the third calendar month after the month in which the Participant ceases to perform substantial service for a Plan Sponsor.  Upon resumption, the initial payment shall include the amount of the payment owed for the calendar month of resumption and any amounts which were withheld during the period between the cessation of the performance of substantial service by the Participant and the resumption of payment, reduced by any offsets described in Subsection (c) of this Section.  Although resumed benefits generally shall not be actuarially adjusted to reflect the suspended benefits, a Participant shall receive a pension upon resumption which shall be no less than the Actuarial Equivalent of the benefits, if any, payable under Section 2 of Appendix B to the Plan.

  (c)Upon resuming payment of a pension under Subsection (b) of this Section, there shall be deducted or offset from the payments an amount equal to any payments made by the Plan to the Participant for any months during which the Participant performed substantial service for a Plan Sponsor, provided that the amount

-22-

of the deduction or offset shall not exceed in any one month 25% of that month’s retirement benefit payment which would have been due and owing to the Participant, except that the initial payment made upon the resumption of benefit payments shall be subject to deduction or offset without limitation.

  (d)The payment of a pension shall not be suspended as provided in Subsection (a) of this Section unless the Plan Administrator notifies the Participant of the suspension by personal delivery or first class mail during the first calendar month in which payments are to be suspended.  The notification shall contain a description of the specific reasons why payments is being suspended, a general description of the provisions of the Plan relating to the suspension of benefits and a copy of those provisions, a statement to the effect that applicable Department of Labor regulations may be found in Section 2530.203-3 of the Code of Federal Regulations and a statement that the Participant may employ the claims procedures described in Plan Section 9 in order to obtain a review by the Plan Administrator of its decision to suspend payment.  If a reduction or offset is to be made to a Participant’s pension under Subsection (c) of this Section, the notification shall also describe the periods of employment with respect to which payments were previously made from the Plan and during which the Participant performed substantial service for a Plan Sponsor, the amount of pension subject to reduction or offset and the manner in which the Plan intends to reduce or offset the retirement benefit.

  (e)A Participant who is receiving a pension must notify the Plan Administrator of any employment, and in connection therewith the Plan Administrator shall be entitled to request from the Participant any reasonable information which the Plan Administrator deems necessary to verify whether or not the Participant is employed.  The Plan Administrator may, at any times and at any frequency as it deems reasonable, require any Participant who is receiving a pension, as a condition to receiving any future pension payments, to certify to the Plan Administrator in writing that he is unemployed or to provide information sufficient to establish that he is not performing substantial service for any Plan Sponsor.  If the Plan Administrator becomes aware that a Participant who is receiving a pension from the Plan is employed and is performing substantial service in a month for a Plan Sponsor and has not notified the Plan Sponsor of that employment, the Plan Administrator shall be entitled, unless it is unreasonable under the circumstances to do so, to assume that the Participant has performed substantial service for that month.

  (f)A Participant who is receiving a pension shall be entitled to request the Plan Administrator to determine whether any specific contemplated employment for a Plan Sponsor by the Participant will constitute substantial service.  Any request shall be treated as a claim for benefits under Plan Section 9, and accordingly the Participant shall be required to follow the claims procedure described in Plan Section 9 in presenting a request.

-23-

  (g)In order to be entitled to the resumption of payment of a pension, the Participant must notify the Plan Administrator in writing that he has ceased to perform substantial service.  The notification by the Plan Administrator which is described in Subsection (d) of this Section shall describe the procedure which the Participant must follow in notifying the Plan Administrator that he has ceased to perform substantial service for a Plan Sponsor and shall include the forms which the Participant must file with the Plan Administrator in connection therewith.

  (h)If a Participant, the payment of whose pension has been suspended, resumes employment with a Plan Sponsor, his pension shall be recomputed upon his subsequent retirement to reflect payments previously paid to him.

6.7Restrictions on Payments to Highly Compensated Employees.

  (a)Notwithstanding anything contained to the contrary in this Plan, the annual payments to a Participant who is among the twenty-five (25) highly compensated employees (within the meaning of Code Section 414(q)) who receive during their most recent year of employment with a Plan Sponsor the greatest Annual Compensation (determined without regard to the Annual Compensation Limit) shall not exceed an amount equal to the payments that would be made on behalf of the Participant under a single life annuity that is the Actuarial Equivalent of the sum of the Participant’s Accrued Benefit and the Participant’s “other benefits” under the Plan.  For purposes of this Section, “other benefits” includes loans in excess of the amounts set forth in Code Section 72(p)(2)(A), any periodic income, any withdrawal values payable to a living Participant, and any death benefit which is payable from the Plan not provided for by insurance on the Participant’s life.

  (b)The restrictions of this Section will not apply, however, if:

(1)after payment to a Participant described in this Section of all benefits described in this Section, the value of the Fund equals or exceeds 110% of the value of the Plan’s current liabilities, as defined in Code Section 412(1)(7) or any successor provision pursuant to Treasury Regulations under Code Section 401(a)(4);

(2)the value of the benefits described in this Section for a Participant described in this Section is less than one percent (1%) of the value of the Plan’s current liabilities, as defined in Code Section 412(l)(7) or any successor provision pursuant to Treasury Regulations under Code Section 401(a)(4);

(3)the value of the benefits for a Participant described in this Section does not exceed $5,000; or

(4)the Plan has terminated and the benefit received by the Participant is non-discriminatory under Code Section 401(a)(4).

-24-

(c)Furthermore, the restrictions of this Section will not apply if, prior to the receipt of the otherwise restricted amount, the Participant enters into a written agreement with the Plan Administrator to secure repayment to the Plan of the otherwise restricted amount.  The otherwise restricted amount is the excess of the amounts distributed to the Participant (accumulated with reasonable interest) over the amounts that could have been distributed to the Participant under Subsection (a) above (accumulated with reasonable interest).  The Participant may secure repayment of the otherwise restricted amount upon distribution by:

  (1)Entering into an agreement for promptly depositing in escrow with an acceptable depositary property having a fair market value equal to at least one hundred twenty-five percent (125%) of the otherwise restricted amount;

  (2)Providing a bank letter of credit in an amount equal to at least one hundred percent (100%) of the otherwise restricted amount; or

  (3)Posting a bond equal to at least one hundred percent (100%) of the otherwise restricted amount.

6.8Direct Rollovers.  Notwithstanding any provisions of the Plan to the contrary that would otherwise limit a Distributee’s election under this Section 6, a Distributee may elect, at the time and in the manner prescribed by the Plan Administrator, to have any portion of a distribution pursuant to this Section which is an Eligible Rollover Distribution paid directly to an Eligible Retirement Plan specified by the Distributee in a Direct Rollover so long as all Eligible Rollover Distributions to a Distributee for a calendar year total or are expected to total at least $200 and, in the case of a Distributee who elects to directly receive a portion of an Eligible Rollover Distribution and directly roll the balance over to an Eligible Retirement Plan, the portion that is to be directly rolled over totals at least $500.  An Eligible Rollover Distribution to which Code Sections 401(a)(11) and 417 do not apply may commence as soon as practicable but no sooner than the eighth day after the notice required by Treasury Regulations Section 1.411 (a)-11(c) is given, provided that:

  (a)the Plan Administrator clearly informs the Distributee that the Distributee has a right to a period of at least 30 days after receiving the notice to consider the decision of whether or not to elect a distribution and a particular distribution option; and

  (b)the Distributee and, if spousal consent is otherwise required by the provisions of this Plan, the spouse of the Distributee, after receiving the notice, affirmatively waive the 30-day period.

6.9Limitations on Accelerated Benefit Distributions.  The following restrictions shall apply to the payment of benefits under the Plan except to the extent the Plan is exempt from the requirements of this Section 6.9 by reason of Code Section 436(d)(4).

-25-

  (a)If the Plan’s Funding Target Attainment Percentage for any Plan Year is less than sixty percent (60%), the Plan shall not make any Prohibited Payment after the valuation date for such Plan Year.

  (b)If the Plan’s Funding Target Attainment Percentage is at least sixty percent (60%), but less than eighty percent (80%), the Plan may not make any Prohibited Payment after the valuation date for such Plan Year to the extent the amount of such Prohibited Payment exceeds the lesser of:

(1)fifty percent (50%) of the amount of the payment which could be made without regard to this Subsection; or

(2)the present value (determined under guidance prescribed by the PBGC, using the interest and mortality assumptions under Code Section 417(e)) of the maximum guarantee with respect to the Participant under ERISA Section 4022;

provided, however, that only one payment under this Subsection may be made to a Participant, his Beneficiary and his “alternate payee” (as defined in Code Section 414(p)) under a “qualified domestic relations order” (as defined in Code Section 414(p)) with respect to such Participant’s Accrued Benefit for any period of consecutive Plan Years to which the limitation of this Subsection applies.  The allocation of the payment among the Participant, his Beneficiary, and his alternate payee shall be in the same manner as the allocation of the Accrued Benefit, unless the qualified domestic relations order provides otherwise.

  (c)If the Plan Sponsor is a debtor in a case under Title 11 of the United States Code or similar Federal or state law, the Plan may not pay any Prohibited Payment until either (1) the Plan Sponsor ceases to be a debtor in any such case, or (2) the Actuary certifies that the Funding Target Attainment Percentage of the Plan is not less than one hundred percent (100%).

  (d)For purposes of this Section, a “Prohibited Payment” means:

(1)Any payment in excess of the monthly amount paid under a single life annuity (plus any social security supplements described in the last sentence of Code Section 411(a)(9)), to any Participant or Beneficiary whose annuity starting date occurs during any period that a limitation under this Section is in effect;

(2)     Any payment for the purchase of an irrevocable commitment from an insurer to pay benefits; or

(3)Any other payment specified in regulations issued by the Secretary of the Treasury under Code Section 436(d)(5)(C).

-26-

(e)Notwithstanding any other provision of this Plan, this Section shall be construed in a manner which is consistent with Code Sections 430 and 436 and the rulings and regulations issued thereunder.

6.10Limitation on Unpredictable Contingent Event Benefits.  Notwithstanding anything in the Plan to the contrary:

(a)If a Participant is entitled to an Unpredictable Contingent Event Benefit that is payable in a Plan Year, such benefit will not be provided to the Participant if the Funding Target Attainment Percentage for such Plan Year either

  (1)is less than sixty percent (60%); or

  (2)would be less than sixty percent (60%) taking into account the payment of such benefit.

   (b)Notwithstanding the foregoing, Subsection (a) of this Section will not apply for any Plan Year (effective as of the first day of such Plan Year), upon payment by a Plan Sponsor of a contribution (in addition to any minimum required contribution for the Plan Year) equal to:

  (1)In the case of paragraph (a)(i) of this Section, the amount of the increase in the funding target of the Plan (pursuant to Code Section 430) for the Plan Year attributable to the Unpredictable Contingent Event Benefit; or

  (2)In the case of Paragraph (a)(ii) of this Section, the amount sufficient to result in a funding target attainment percentage (as defined in Code Section 430(d)(2)) of at least sixty percent (60%).

(c)For purposes of this Section, “Unpredictable Contingent Event Benefit” is any benefit payable solely by reason of:

  (1)a plant shutdown or similar event, as determined by the Secretary of the Treasury; or

  (2)any event other than the attainment of any age, performance of any service, receipt or derivation of any compensation, or occurrence of death or disability.

(d)Notwithstanding any other provision of this Plan, this Section shall be construed in a manner which is consistent with Code Sections 430 and 436 and the rulings and regulations issued thereunder.

-27-

SECTION 7

PAYMENT OF BENEFITS ON TERMINATION OF EMPLOYMENT OR DEATH

7.1Termination of Employment.  Transfer of a Participant from one Plan Sponsor to another Plan Sponsor or to an Affiliate shall not be deemed for any purpose under the Plan to be a termination of employment of the Participant. For purposes of this Section only, Morrison Fresh Cooking, Inc. and Morrison Health Care, Inc. shall be deemed to be Affiliates of the Primary Sponsor from and after the effective date of the distributions of the common stock of Morrison Fresh Cooking, Inc. and of the common stock of Morrison Health Care, Inc. to the stockholders of the Primary Sponsor.

7.2Timing of Payment of Vested Accrued Benefit. If a Participant ceases to be an Employee for any reason other than the attainment of Retirement Date, he, or his surviving spouse, shall be entitled to receive that portion of his Accrued Benefit in which he is vested as of his termination of employment according to the following vesting schedule:

Full Years of Vesting Service	Percentage Vested
Less than Five	0%
Five or more	100%

The pension payable to a Participant, or his surviving spouse, shall be determined in a similar manner as the pension payable pursuant to Plan Section 5.2 is determined but based on his years of Credited Service (and Benefit Service) as of his termination of employment.  Such pension shall commence on what would have been his Normal Retirement Date, except that the pension payable to a Participant or his surviving spouse, who consents to payment prior to what would have been his Normal Retirement Date shall commence upon, or any time after, what would have been his Early Retirement Date, reduced by the applicable factors pursuant to Plan Section 1.2 for each year by which the commencement of such pension precedes the Participant’s Normal Retirement Date.  The pension shall be payable pursuant to Plan Section 6; or Section 4.2, as applicable. Notwithstanding the foregoing, if the present value Actuarial Equivalent of a Participant’s vested Accrued Benefit is $5,000 or less, payment shall be made with a reasonable period of time after the end of the Plan Year in which the Participant’s termination of employment occurs.  However, in the event of a mandatory distribution that is greater than $1,000, if the Participant does not elect, in accordance with Plan sections 6.2(d) and 6.2(e), to have such distribution paid directly to an Eligible Retirement Plan specified by the Participant in a direct rollover, or consent to receive the distribution directly, then the Plan Administrator may elect to leave the Participant’s Accrued Benefit in the Plan until the earlier of (i) the Participant’s Normal Retirement Date, or (ii) the time the Plan Administrator pays the distribution in a direct rollover to an individual retirement plan designated by the Plan Administrator.

-28-

7.3           Special Lump Sum Window Benefit.  Notwithstanding any other provision of Plan Sections 4, 5 and 6 to the contrary:

(a)           any Participant (i) whose most recent termination of employment was on or before February 2, 2015; (ii) who as of the date that the distribution of his or her Accrued Benefit is processed pursuant to an election made pursuant to this Section 7.3 has not returned to employment with the Primary Sponsor or any Affiliate since his or her most recent termination of employment (the “Window Determination Date”), (iii) whose vested Accrued Benefit has a lump sum present value of $25,000.00 or less determined as of the annuity starting date described in Section 7.3(d); and (iv) who (A) has experienced a termination of employment with a vested Accrued Benefit but has not become eligible to commence distribution of his or her vested Accrued Benefit under Sections 6 or 7 as of the Window Determination Date; or (B) has become eligible to commence, but has not commenced or been required by the Plan to commence, distribution of his or her vested Accrued Benefit under Sections 6 or 7 as of or prior tothe Window Determination Date (an “Eligible Window Participant”) may make an election on or after February 2, 2015and on or before March 31, 2015(the “Window Period”) to receive his or her Accrued Benefit pursuant to this Section 7.2.

(b)           An Eligible Window Participant (1) who has not otherwise become eligible to commence distribution of the vested Accrued Benefit (or portion thereof) under terms of the Plan as of the Window Determination Date; or (2) who has become eligible to commence, but has not commenced or been required by the Plan to commence distribution of the vested Accrued Benefit (or portion thereof) under the terms of the Plan as of or prior to the Window Determination Date may elect during the Window Period to commence distribution of the vested Accrued Benefit (or portion thereof) in one of the following forms:

(i)           An Eligible Window Participant may elect to receive the distribution in the form of an Actuarial Equivalent (A) lump sum (determined as of the date distribution is to be made on the basis of the Participant’s unsubsidized benefit commencing on or after the Participant’s Normal Retirement Age, as applicable), or (B) a Normal Fund Payment or, subject to any applicable eligibility criteria, a Qualified Optional Survivor Annuity.

(ii)           A Participant who has become eligible to commence distribution of his or her Accrued Benefit may elect any other form of payment described in Section 6.2.

(c)           The period to make a payment election under this Section will be the Window Period, provided that such election may be revoked until the Window Determination Date. Proper elections must be postmarked or received in the manner required by the Plan Administrator on or before the last day of the Window Period,

-29-

provided, however, that the Plan Administrator will permit Eligible Window Participants whose elections are postmarked or received by the Plan Administrator in the manner required by the Plan Administrator by the last day of the Window Period to correct any errors or deficiencies in the election within a reasonable period of time following the end of the Window Period as determined by the Plan Administrator.  The payment election process under this Section 7.3 is subject to the consent, timing and explanation rules under Sections 6.2.  The payment election under this Section 7.3 of a Participant who is married as of his or her annuity starting date, determined in accordance with Section 7.3(d), is subject to the spousal consent rules of Section 6.2.

(d)           The Plan Administrator shall commence payment of any distribution elected by an Eligible Window Participant as soon as administratively feasible following confirmation of the Eligible Window Participant’s eligibility to receive distribution of the vested Accrued Benefit (or portion thereof) under this Section 7.3, but no earlier than March 1, 2015.  An electing Eligible Window Participant’s annuity starting date will be the first day of the calendar month in which payment of the Accrued Benefit (or portion thereof) is made or commences during the Window Period.

(e)           In the case of payments made other than in a lump sum, the Accrued Benefit attributable to an Eligible Window Participant who has not yet reached his or her Early Retirement Age shall be actuarially adjusted for years prior to attaining such Participant’s Early Retirement Age in accordance with the factors set forth in Appendix E.

(f)           Notwithstanding any other provision to the contrary in this Section 7.3, the following Participants shall not be an Eligible Window Participant:

(1)           any Eligible Window Participant whose election is postmarked or received, in the manner required by the Plan Administrator, after the calendar date on which the elections by other Eligible Window Participants selecting the lump sum form of payment first equal or exceed a collective payment amount of $330,000;

(2) any Participant whose vested Accrued Benefit is subject to a domestic relations order that has been delivered to the Plan Administrator, or for which the Plan Administrator is on notice that it may become subject to a domestic relations order, but which the Plan Administrator has not determined to be a qualified domestic relations order before the Window Determination Date;

(3) any Participant who is eligible for a Disability benefit under Section 5.4;

-30-

(4) any individual receiving or eligible to receive death benefits under the Plan; or

(5) any alternate payee receiving or eligible to receive benefits under the Plan.

7.4           Forfeitures. As of a Participant’s death or termination of employment, that portion of his Accrued Benefit in which he is not vested shall be forfeited, and any forfeitures resulting from the operation of this Section 7 shall be used to reduce the cost of the Plan by reducing future Plan Sponsor contributions.

7.5           Cashout/Buyback

(a)For the purpose of determining a Participant’s Accrued Benefit only, the Plan shall disregard years of Credited Service (and Benefit Service) performed by the Participant with respect to which the Participant received a distribution of the present value of his vested Accrued Benefit attributable to his years of Credited Service and Benefit Service.  For this purpose, a nonvested Participant shall be deemed to have received a distribution of zero dollars.

(b)In the case of a cash out described in Plan Section 7.4(a) which is less than the lump sum present value of the Participant’s vested Accrued Benefit immediately prior to the distribution, the Accrued Benefit due to his termination of participation in the Plan attributable to Credited Service (and Benefit Service) that is not required to be taken into account is the Accrued Benefit multiplied by a fraction, the numerator of which is the amount of the distribution and the denominator of which is the lump sum present value of his total vested Accrued Benefit immediately prior to the distribution.

(c)The Accrued Benefit of a Participant which is disregarded under Plan Section 7.4(a) shall be restored upon repayment to the Plan of the full amount of the distribution with interest on that amount compounded annually at the rate of 120% of the federal mid-term rate as in effect under Code Section 1274 at the beginning of each Plan Year from the date of distribution to the date of repayment, or upon reemployment if the Participant received a deemed distribution of zero dollars; provided that:

(1)The distribution received under Plan Section 7.4(a) was less than the lump sum present value of the Participant’s Accrued Benefit, and

(2)The Participant resumes employment covered under the Plan and makes repayment within five years of the resumption of employment.

7.6           Change to Vesting Schedule. In the event that an amendment to the Plan directly or indirectly changes the vesting schedule of the Plan, the vested percentage for each Participant accumulated to the date when the amendment is adopted shall not be reduced as a result of such amendment.  In addition, any Participant with at least three (3) years of Vesting Service

-31-

may irrevocably elect to remain under the vesting schedule in operation prior to the amendment with respect to benefits accrued both before and after the amendment.

SECTION 8

ADMINISTRATION OF THE PLAN

8.1Trust Agreement.  The Primary Sponsor shall enter into a Trust with the Trustee for the management of the Fund, which Trust shall form a part of the Plan and is incorporated herein by reference.

8.2Operation of the Plan Administrator.  The Primary Sponsor shall appoint the Plan Administrator.  If an organization is appointed to serve as the Plan Administrator, then the Plan Administrator may designate in writing a person who may act on behalf of the Plan Administrator.  The Primary Sponsor shall have the right to remove the Plan Administrator at any time by notice in writing.  The Plan Administrator may resign at any time by written notice of resignation to the Trustee and the Primary Sponsor.  Upon removal or resignation, or in the event of the dissolution of the Plan Administrator, the Primary Sponsor shall appoint a successor.

8.3Fiduciary Responsibility.

  (a)The Plan Administrator, as a Named Fiduciary, may allocate its fiduciary responsibilities among Fiduciaries, other than the Trustee, designated in writing by the Plan Administrator and may designate in writing other persons (other than the Trustee) to carry out its fiduciary responsibilities under the Plan.  The Plan Administrator may remove any such person designated to carry out its fiduciary responsibilities under the Plan by notice in writing to such person.

  (b)The Plan Administrator and each other Fiduciary may employ persons to perform services and to render advice with regard to any of the Fiduciary’s responsibilities under the Plan.  Charges for all services performed shall be directly paid by the Fund.

  (c)To the extent not prohibited by law, each Plan Sponsor shall indemnify and hold harmless each person constituting the Plan Administrator from and against any and all claims, losses, costs, expenses (including, without limitation, attorney’s fees and court costs), damages, actions or causes of action arising from, on account of or in connection with the performance by such person of his duties in such capacity, other than such of the foregoing arising from, on account of or in connection with the willful neglect or willful misconduct or gross negligence of such person so acting.

-32-

8.4Duties of the Plan Administrator.

   (a)The Plan Administrator shall advise the Trustee with respect to all payments made under the terms of the Plan and shall direct the Trustee in writing to make such payments; provided, however, in no event shall the Trustee be required to make payments if the Trustee has actual knowledge that the payments are contrary to the terms of this Plan or the Trust.

   (b)The Plan Administrator shall establish rules, not contrary to the provisions of the Plan and the Trust, for the administration of the Plan and the transaction of its business.  All elections and designations to be made under the Plan by a Participant or Beneficiary shall be made on forms prescribed by the Plan Administrator.  The Plan Administrator shall have discretionary authority to construe the terms of the Plan and shall determine all questions arising in the administration, interpretation and application of the Plan, including, but not limited to, those concerning eligibility for benefits.  All determinations of the Plan Administrator shall be conclusive and binding on all parties, including, without limitation, Employees, Participants, Beneficiaries, and Fiduciaries, subject to the provisions of the Plan and the Trust and subject to applicable law.

   (c)The Plan Administrator shall furnish Participants and Beneficiaries with all disclosures now or hereafter required by ERISA or the Code.  The Plan Administrator shall file the various reports and disclosures concerning the Plan and its operations as required by ERISA and by the Code, and shall be responsible for maintaining all records of the Plan.

   (d)The statement of specific duties for a Plan Administrator in this Section 8.4 is not in derogation of any other duties which a Plan Administrator has under the provisions of the Plan or the Trust or under applicable law..

8.5Investment Manager.  The Primary Sponsor may, by action in writing certified by notice to the Trustee, appoint an investment manager.  Any Investment Manager may be removed in the same manner in which appointed, and in the event of removal, the investment Manager shall, as soon as possible, but in no event more than thirty (30) days after notice of removal, turn over all assets managed by it to the Trustee or to any successor investment Manager appointed, and shall make a full accounting to the Primary Sponsor with respect to all assets managed by it since its appointment as an Investment Manager.

8.6Investment Committee.  The Primary Sponsor may, by action in writing certified by notice to the Trustee, appoint an Investment Committee to direct the investment of the Plan.  The Investment Committee shall consist of one or more persons and the Primary Sponsor shall have the right to remove any person constituting any part of the Investment Committee at any time by notice in writing to such person.  A person constituting any part of the Investment Committee may resign at any time by written notice of resignation to the Primary Sponsor.  

-33-

Upon removal, resignation or death, the Primary Sponsor may appoint a successor to that person.  Until a successor has been appointed, the remaining persons constituting the Investment Committee may continue to act as the Investment Committee.

8.7Action by the Primary Sponsor or a Plan Sponsor.  Any action to be taken by the Primary Sponsor or a Plan Sponsor shall be taken by resolution or written direction duly adopted by its board of directors or appropriate governing body; provided, however, that by resolution or written direction, the board of directors or appropriate governing body may delegate to any officer or other appropriate person the authority to take any such actions as may be specified in such resolution or written direction.

8.8Employees of Commonly Controlled Businesses.  Except as provided in Section 3 of Appendix B to the Plan, all employees of all corporations which are members of a controlled group of corporations (as defined in Section 414(b) of the Code), all employees of all trades or businesses (whether or not incorporated) which are under common control (as defined in Section 414(c) of the Code), and all employees of all corporations, partnerships, or other organizations which are members of an affiliated service group (as defined in Section 414(m) of the Code) and all employees of any other entity required to be aggregated with a Plan Sponsor pursuant to regulations under Section 414(o) of the Code shall be treated as employed by a single employer.

8.9Appeals Fiduciary. The Primary Sponsor shall appoint an Appeals Fiduciary. The Appeals Fiduciary shall be required to review claims for benefits payable due to a Participant’s Disability that are initially denied by the Plan Administrator and for which the claimant requests a full and fair review pursuant to Section 9.4.  The Appeals Fiduciary may not be the individual who made the initial adverse determination with respect to any claim he reviews and may not be a subordinate of any individual who made the initial adverse determination.  The Appeals Fiduciary may be removed in the same manner in which appointed or may resign at any time by written notice of resignation to the Primary Sponsor.  Upon such removal or resignation, the Primary Sponsor shall appoint a successor.

8.10Corrective Action.  Notwithstanding any provision of the Plan to the contrary, the Plan Sponsor may make corrective contributions, allocations, or distributions or take any other corrective action required to comply with, or otherwise permitted by, any program provided pursuant to applicable law, including without limitation the Employee Plans Compliance Resolution System or any successor guidance.

SECTION 9

CLAIM REVIEW PROCEDURE

9.1Notice of Denial. If a Participant (or other person entitled to file a claim for benefits under ERISA) (a “claimant”) is denied a claim for benefits under the Plan, the Plan Administrator shall provide to the claimant written notice of the denial within ninety (90) days

-34-

 (forty-five (45) days with respect to a denial of any claim for benefits due to the Participant’s Disability) after the Plan Administrator receives the claim, unless special circumstances require an extension of time for processing the claim.  If such an extension of time is required, written notice of the extension shall be furnished to the claimant prior to the termination of the initial 90-day period.  In no event shall the extension exceed a period of ninety (90) days (thirty (30) days with respect to a claim for benefits due to the Participant’s Disability) from the end of such initial period.  With respect to a claim for benefits due to the Participant’s Disability, an additional extension of up to thirty (30) days beyond the initial 30-day extension period may be required for processing the claim.  In such event, written notice of the extension shall be furnished to the claimant within the initial 30-day extension period.  Any extension notice shall indicate the special circumstances requiring the extension of time, the date by which the Plan Administrator expects to render the final decision, the standards on which entitlement to benefits are based, the unresolved issues that prevent a decision on the claim and the additional information needed to resolve those issues.

9.2Contents of Notice of Denial. If a claimant is denied a claim for benefits under a Plan, the Plan Administrator shall provide to such claimant written notice of the denial which shall set forth:

   (a)the specific reasons for the denial;

   (b)specific references to the pertinent provisions of the Plan on which the denial is based;

   (c)a description of any additional material or information necessary for the claimant to perfect the claim and an explanation of why such material or information is necessary;

   (d)an explanation of the Plan’s claim review procedures, and the time limits applicable to such procedures, including a statement of the claimant’s right to bring a civil action under Sections 502(a) of ERISA following an adverse benefit determination on review;

   (e)in the case of a claim for benefits due to a Participant’s Disability, if an internal rule, guideline, protocol or other similar criterion is relied upon in making the adverse determination, either the specific rule, guideline, protocol or other similar criterion; or a statement that such rule, guideline, protocol or other similar criterion was relied upon in making the decision and that a copy of such rule, guideline, protocol or other similar criterion will be provided free of charge upon request; and

   (f)in the case of a claim for benefits due to a Participant’s Disability, if a denial of the claim is based on a medical necessity or experimental treatment or similar exclusion or limit, an explanation of the scientific or clinical judgment for the denial, an explanation applying the terms of the Plan to the claimant’s medical circumstances or a statement that such explanation will be provided free of charge upon request.

-35-

9.3Right to Review. After receiving written notice of the denial of a claim or that a domestic relations order is a qualified domestic relations order, a claimant or his representative shall be entitled to:

   (a)request a full and fair review of the denial of the claim or determination that a domestic relations order is a qualified domestic relations order by written application to the Plan Administrator (or Appeals Fiduciary in the case of a claim for benefits payable due to a Participant’s Disability);

   (b)request, free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the claim;

   (c)submit written comments, documents, records, and other information relating to the denied claim to the Plan Administrator or Appeals Fiduciary, as applicable; and

   (d)a review that takes into account all comments, documents, records, and other information submitted by the claimant relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination.

9.4Application for Review.

   (a)If a claimant wishes a review of the decision denying his claim to benefits under the Plan, other than a claim described in Subsection (b) of this Section 9.4, or if a claimant wishes to appeal a decision that a domestic relations order is a qualified domestic relations order, he must submit the written application to the Plan Administrator within sixty (60) days after receiving written notice of the denial or notice that the domestic relations order is a qualified domestic relations order.

   (b)If the claimant wishes a review of the decision denying his claim to benefits under the Plan due to a Participant’s Disability, he must submit the written application to the Appeals Fiduciary within one hundred eighty (180) days after receiving written notice of the denial.  With respect to any such claim, in deciding an appeal of any denial based in whole or in part on a medical judgment (including determinations with regard to whether a particular treatment, drug, or other item is experimental, investigational, or not medically necessary or appropriate), the Appeals Fiduciary shall

(1)consult with a health care professional who has appropriate training and experience in the field of medicine involved in the medical judgment; and

(2)identify the medical and vocational experts whose advice. was obtained on behalf of the Plan in connection with the denial without regard to

-36-

whether the advice was relied upon in making the determination to deny the claim.

Notwithstanding the foregoing, the health care professional consulted pursuant to this Subsection (b) shall be an individual who was not consulted with respect to the initial denial of the claim that is the subject of the appeal or a subordinate such individual.

9.5Hearing. Upon receiving such written application for review, the Plan Administrator or Appeals Fiduciary, as applicable, may schedule a hearing for purposes of reviewing the claimant’s claim, which hearing shall take place not more than thirty (30) days from the date on which the Plan Administrator or Appeals Fiduciary received such written application for review.

9.6Notice of Hearing. At least ten (10) days prior to the scheduled hearing, the claimant and his representative designated in writing by him, if any, shall receive written notice of the date, time, and place of such scheduled hearing.  The claimant or his representative, if any, may request that the hearing be rescheduled, for his convenience, on another reasonable date or at another reasonable time or place.

9.7Counsel. All claimants requesting a review of the decision denying their claim for benefits may employ counsel for purposes of the hearing.

9.8Decision on Review. No later than sixty (60) days (forty-five (45) days with respect to a claim for benefits due to the Participant’s Disability) following the receipt of the written application for review, the Plan Administrator or the Appeals Fiduciary, as applicable, shall submit its decision on the review in writing to the claimant involved and to his representative, if any, unless the Plan Administrator or Appeals Fiduciary determines that special circumstances (such as the need to hold a hearing) require an extension of time, to a day no later than one hundred twenty (120) days (ninety (90) days with respect to a claim for benefits due to the Participant’s Disability) after the date of receipt of the written application for review.  If the Plan Administrator or Appeals Fiduciary determines that the extension of time is required, the Plan Administrator or Appeals Fiduciary shall furnish to the claimant written notice of the extension before the expiration of the initial sixty (60) day (forty-five (45) days with respect to a claim for benefits due to the Participant’s Disability) period.  The extension notice shall indicate the special circumstances requiring an extension of time and the date by which the Plan Administrator or Appeals Fiduciary expects to render its decision on review.  In the case of a decision adverse to the claimant, the Plan Administrator or Appeals Fiduciary shall provide to the claimant written notice of the denial which shall include:

(a)the specific reasons for the decision;

(b)specific references to the pertinent provisions of the Plan on which the decision is based;

-37-

(c)a statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the claimant’s claim for benefits;

(d)a statement describing any available voluntary appeal procedures (if any) and of the claimant’s right to obtain information about such procedures as required by ERISA and a statement of the claimant’s right to bring an action under Section 502(a) of ERISA following the denial of the claim upon review;

(e)in the case of a claim for benefits due to the Participant’s Disability, if an internal rule, guideline, protocol or other similar criterion is relied upon in making the adverse determination, either the specific rule, guideline, protocol or other similar criterion; or a statement that such rule, guideline, protocol or other similar criterion was relied upon in making the decision and that a copy of such rule, guideline, protocol or other similar criterion will be provided free of charge upon request;

(f)in the case of a claim for benefits due to a Participant’s Disability, if a denial of the claim is based on a medical necessity or experimental treatment or similar exclusion or limit, an explanation of the scientific or clinical judgment for the denial, an explanation applying the terms of the Plan to the claimant’s medical circumstances or a statement that such explanation will be provided free of charge upon request; and

(g)in the case of a claim for benefits due to a Participant’s Disability, a statement regarding the availability of other voluntary alternative dispute resolution options.

SECTION 10

LIMITATION OF ASSIGNMENT PAYMENTS TO LEGALLY

INCOMPETENT DISTRIBUTEE AND UNCLAIMED PAYMENTS

10.1Anti-Alienation. No benefit which shall be payable under the Plan to any person shall be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge, and any attempt to anticipate, alienate, sell, transfer, assign, pledge, encumber or charge same shall be void.  No benefit shall in any manner be liable for, or subject to, the debts, contracts, liabilities, engagements or torts of any person, nor shall it be subject to attachment legal process for, or against, any person, and the same shall not be recognized under the Plan, except to such extent as may be required by law.  If any person who shall be entitled to any benefit under the Plan shall become bankrupt or shall attempt to anticipate, alienate, sell, transfer, assign, pledge, encumber or charge the benefit under the Plan, then the payment of that benefit shall, in the discretion of the Plan Administrator, terminate and in that event the Trustee shall hold or apply the same for the benefit of such person, his spouse, children, other dependents or any of them in the manner and proportion as the Plan Administrator shall determine.  Notwithstanding the above, this Section shall not apply to a qualified domestic

-38-

relations order (as defined in Section 414(p) of the Code), and benefits may be paid pursuant to the provisions of such an order.  The Plan Administrator shall develop procedures in accordance with applicable federal regulations to determine whether a domestic relations order is qualified, and, if so, the procedures for complying therewith.

10.2Exceptions to Anti-Alienation.  Notwithstanding any other provision of the Plan, the benefit of a Participant shall be subject to legal process and may be assigned, alienated or attached pursuant to a court judgment or settlement provided:

(a)such Participant is ordered or required to pay the Plan in accordance with the following:

(1)a judgment or conviction for a crime involving the Plan;

(2)a civil judgment entered by a court in an action brought in connection with a violation of part 4 of subtitle B of Title I of ERISA; or

(3)a settlement agreement between such Participant and the Secretary of Labor, in connection with a violation (or alleged violation) of part 4 of subtitle B of Title I of ERISA by a fiduciary or any other person; and

(b)the judgment, order, decree, or settlement agreement shall expressly provide for the offset of all or part of the amount ordered or required to be paid to the Plan against such Participant’s benefits under the Plan.

10.3Minors and Incompetents.  Whenever any benefit which shall be payable under the Plan is to be paid to or for the benefit of any person who is then a minor or determined to be incompetent by qualified medical advice, the Plan Administrator need not require the appointment of a guardian or custodian, but shall be authorized to cause the same to be paid over to the person having custody of the minor or incompetent, or to cause the same to be paid to the minor or incompetent without the intervention of a guardian or custodian, or to cause the same to be paid to a legal guardian or custodian of the minor or incompetent if one has been appointed or to cause the same to be used for the benefit of the minor or incompetent.

10.4Missing Recipients. If the Plan Administrator cannot ascertain the whereabouts of any person to whom a payment is due under the Plan, the Plan Administrator may direct that the payment and all remaining payments otherwise due to the person be cancelled on the records of the Plan and the amount thereof applied as a forfeiture in accordance with Plan Section 0, except that, in the event the person later notifies the Plan Administrator of his whereabouts and requests the payments due to him under the Plan, the Plan Sponsor shall contribute to the Plan an amount equal to be paid to him as soon as administratively feasible.

10.5Non-Liability.  Any payment to a person, or to the legal representative of a person in accordance with the provisions of this Plan, shall to the extent thereof be in full satisfaction of all claims under this Plan against the Trustee, the Plan Administrator and the

-39-

Plan Sponsor, any of whom may require such person as a condition precedent to such payment, to execute a receipt and release therefor in such form as shall be determined by the Trustee, the Plan Administrator, or the Plan Sponsor, as the case may be. The Plan Sponsor does not guarantee the Trust, or any person entitled to a benefit under the Plan against loss of or depreciation in value of any right or benefit that any of them may acquire under the terms of this Plan. All of the benefits payable under this Plan shall be paid or provided solely from the Trust, and the Plan Sponsor does not assume any liability or responsibility for payment of such benefits.

SECTION 11

PROHIBITION AGAINST DIVERSION

At no time shall any part of the Fund be used for or diverted to purposes other than the exclusive benefit of the Participants or their Beneficiaries, subject, however, to the payment of all taxes and administrative expenses and subject to the provisions of the Plan with respect to returns of contributions.  Expenses incurred in the administration of the Plan shall be paid from the Trust, to the extent permitted by ERISA, unless such expenses are paid by the Plan Sponsor; provided, further, that the Plan Sponsor may be reimbursed by the Fund, to the extent permitted by ERISA, for Plan expenses originally paid by the Plan Sponsor.

SECTION 12

LIMITATION OF RIGHTS

Neither the Plan, the Trust nor the fact of Plan participation shall give any Employee or other person any right except to the extent that the right is specifically fixed under the terms of the Plan and the Fund is sufficient therefor.  The establishment of the Plan shall not be construed to give any Employee a right to continue in the employ of a Plan Sponsor or as interfering with the right of the Plan Sponsor to terminate the employment of any Employee at any time.

SECTION 13

AMENDMENT AND TERMINATION

13.1Right to Amend or Terminate Plan.  The Primary Sponsor reserves the right at any time to modify, amend, or terminate the Plan or the Trust in whole or in part by notice thereof in writing delivered to the Trustee; provided, however,

(a)that the Primary Sponsor shall have no power to modify or amend the Plan in such manner as would cause or permit any portion of the funds held under the Plan to be used for, or diverted to, purposes other than for the exclusive benefit of Participants or their Beneficiaries, or as would cause or permit any portion of any funds held under the Plan to become the property of a Plan Sponsor;

-40-

(b)the duties or liabilities of the Trustee shall not be increased without the Trustee’s written consent; and

(c)no amendment to the Plan that has the effect of increasing liabilities of the Plan by reason of increases in benefits, establishment of new benefits, changing the rate of benefit accrual, or changing the rate at which benefits become vested and nonforfeitable may take effect in any Plan Year if the Funding Target Attainment Percentage for the Plan Year is either

(1)less than eighty percent (80%); or

(2)eighty percent (80%) or more, but would be less than eighty percent (80%) if the benefits attributable to the amendment were taken into account in determining the Funding Target Attainment Percentage;

provided, however that the restriction in this Subsection shall not apply (i) as of the later of the first day of the Plan Year or the effective date of the amendment  upon payment by the Plan Sponsor of a contribution to the Trust (in addition to any minimum required contribution under Code Section 430) equal to, in the case of Paragraph (1), the amount of the increase in the funding target of the Plan (under Code Section 430) for the Plan Year attributable to the amendment, or in the case of Paragraph (2), the amount sufficient to result in a Funding Target Attainment Percentage of eighty percent (80%) or greater; or (ii) to an amendment that increases benefits under a formula that is not based on a Participant’s compensation, but only if the rate of increase in benefits does not exceed the contemporaneous rate of increase in average wages of Participants covered by the amendment.

In the event of termination of the Plan, the benefit of each Participant who is a former or present highly compensated employee as defined in Code Section 414(q) is limited to a benefit that is non-discriminatory under Code Section 401(a)(4).  No modifications or amendments shall have the effect of retroactively changing or depriving Participants or Beneficiaries of rights already accrued under the Plan.  No Plan Sponsor other than the Primary Sponsor shall have the right to so modify, amend or terminate the Plan or the Trust.

13.2Right to Terminate by Adopting Affiliate.  Each Plan Sponsor, other than the Primary Sponsor, shall have the right to terminate its participation in the Plan and Trust by the adoption of a resolution of its board of directors or other appropriate governing body and the giving of notice in writing to the Primary Sponsor and the Trustee, unless the termination would result in the disqualification of the Plan or the Trust as to any other Plan Sponsor.  If contributions by or on behalf of a Plan Sponsor completely and permanently cease, the Plan and Trust shall be deemed terminated as to such Plan Sponsor, provided, however, that if contributions of a Plan Sponsor completely and permanently cease in connection with a bankruptcy proceeding where that Plan Sponsor is the bankrupt entity, such circumstances, in and of themselves, shall not cause any portion of the Plan and Trust to be deemed terminated.  

-41-

In the event of the termination of the Plan, the benefits payable to any “highly compensated employee,” as defined in Code Section 414(q), is limited to an amount that is nondiscriminatory under Code Section 401(a)(4).

13.3Notice of Termination.  In the event that the Primary Sponsor shall desire to terminate the Plan, within meaning of Section 4041 of ERISA, the Plan Administrator shall notify the PBGC, each Participant, each Beneficiary, and each other affected party of the proposed termination of the Plan in accordance with the provisions of the Single-Employer Pension Plan Amendments Act of 1986 (“SEPPAA”) and regulations issued by the PBGC thereunder.  Amounts paid from the Fund pursuant to a termination of the Plan and final distribution of the Fund shall be in accordance with Section 13.4 of the Plan, subject to SEPPAA and regulations issued by the PBGC thereunder.

13.4Priority Categories. In the event of the termination of the Plan in accordance with Section 4041 of ERISA, the assets of the Plan shall be distributed in accordance with Section 4044 of ERISA and any regulations issued thereunder.  In order that the assets of the Plan may be properly allocated, the total benefits payable under the Plan shall be divided with respect to each affected Participant among the priority categories (a) through (g) set forth below.  Each affected Participant’s benefit assigned to a particular priority category shall then be separated between basic benefits and non-basic benefits.  The Plan Administrator shall then value each type of benefit in each priority category in accordance with the valuation factors prescribed by the PBGC, and shall then allocate the assets of the Plan sequentially to the following priority categories:

   (a)That portion, if any, of each Participant’s Accrued Benefit which is derived from his voluntary employee contributions.

   (b)That portion, if any, of each Participant’s Accrued Benefit which is derived from his mandatory employee contributions.

   (c)Those benefits, excluding any increases in such benefits resulting from Plan amendments during the preceding five (5) years, payable as an annuity under the terms of the Plan to all Participants and Beneficiaries:

  (1)to whom benefits have been in pay status for at least three (3) years prior to the date of the Plan’s termination, taking the lowest benefit in pay status during such three (3) year period, and

  (2)to whom benefits (other than those described in the foregoing priority (c)(1)) would have been in pay status as of the beginning of such three (3) year period had an eligible Participant actually retired on a retirement date prior to the beginning of such three (3) year period, as if such benefits had commenced as a Normal Fund Payment as of the beginning of such three (3) year period.

-42-

  (d)Those basic benefits, other than those benefits payable pursuant to the foregoing priority categories (b) and (c) to which Participants or their Beneficiaries are entitled, or would be, entitled if their employment were terminated on the date of the Plan’s termination, to the extent such benefits are guaranteed by the PBGC.  For purposes of this Section, the term “basic benefits” means the type of benefits which are, or would be, guaranteed under Section 4022 of ERISA and the regulations issued thereunder, without regard to the limitations set forth in Section 4022(b) of ERISA.

  (e)All other benefits payable in which such Participant is vested as of the date of its termination; provided, however, that if the Plan assets are insufficient to satisfy in full the benefits provided pursuant to this priority category (e), the available assets shall be allocated in accordance with Section 13.6 of the Plan.

  (f)All other benefits provided for under the Plan.

  (g)If any assets remain as a result of actuarial error after complete allocation pursuant to this Section 13.4, such remaining assets shall be paid to the terminating Plan Sponsor.

13.5Insufficient Assets. In the event Plan assets shall be insufficient to provide in full the benefits of the entire class of individuals described within any priority category other than priority category (e), the available assets for such class shall be allocated among the Participants of that class and their Beneficiaries, pro rata among such individuals on the basis of the present value (as of the Participating Plan’s termination date) of their respective benefits as described in such Section 4044.

13.6Insufficient Assets for Category (e) In the event that the assets available for allocation under Section 13.4(e) are insufficient to satisfy in full the benefits of Participants described within that Section, the available assets for such class shall be allocated on the basis of the benefits of Participants of that class and their Beneficiaries, based upon the Plan as in effect at the beginning of the five (5) year period ending on the date of termination; or, if additional assets remain available for allocation under such Section 13.4(e), the available assets shall be allocated on the basis of the Plan as amended by the most recent amendment to the Plan effective during such five (5) year period, under which the assets available for allocation are sufficient to satisfy in full the benefits of the class of individuals described in Section 13.4(e) and any assets thereafter remaining to be allocated under such Section 13.4(e) shall be allocated on the basis of the Plan as amended by the next succeeding amendment to the Plan effective during such five (5) year period.

13.7Benefits Payable.  The Plan Administrator may direct that any benefit payable in accordance with Section 13.4 shall be provided through the continuance of the existing Trust or through the purchase of annuity contracts from an insurance company, or by a combination thereof.

-43-

13.8Merger or Consolidation.  In the case of any merger or consolidation of the Plan with, or any transfer of the assets or liabilities of the Plan to any other plan qualified under Code Section 401, the terms of the merger, consolidation or transfer shall be such that each Participant in the Plan would receive (in the event of termination of the Plan or its successor immediately thereafter) a benefit which is no less than the benefit which such Participant would have received in the event of termination of the Plan immediately before the merger, consolidation or transfer.

13.9Full Vesting.  Subject to the limitations on entitlements to benefits contained in this Section 13 and in Section 14 of the Plan, in the event of the termination or partial termination of the Plan, each affected Participant’s Accrued Benefit as of the date of such termination or partial termination, to the extent funded as of such date, shall be fully vested, notwithstanding the provisions of Section 0.

13.10Elimination of Benefits. A Plan amendment--

   (a)which eliminates or reduces an early retirement benefit, if any, or which eliminates or reduces a retirement-type subsidy (as defined in regulations issued by the Department of the Treasury), if any, or

   (b)which eliminates an optional form of benefit,

shall not be effective with respect to benefits attributable to service before the amendment is adopted.  In the case of a retirement-type subsidy described in Subsection (a) of this Section, this Section shall be applicable only to a Participant who satisfies, either before or after the amendment, the preamendment conditions for the subsidy.

13.11Assumption of Plan; Transfer of Assets.  If the Primary Sponsor merges or consolidates with or into a corporation, or if substantially all of the assets of the Primary Sponsor are transferred to another business, the Plan hereby created shall terminate on the effective date of such merger, consolidation or transfer.  However, if the surviving corporation resulting from such merger or consolidation, or the business to which the Primary Sponsor’s assets have been transferred, adopts this Plan, it shall continue and such corporation or business shall succeed to all rights, powers and duties of the Primary Sponsor hereunder.  The employment of any Employee who continues in the employ of such successor corporation or business shall not be deemed to have been terminated for any purpose hereunder.

In no event shall this Plan be merged or consolidated with any other plan, nor shall there be any transfer of assets or liabilities from this Plan to any other plan, unless immediately after such merger, consolidation or transfer, each Participant’s benefits, if such other plan were then to terminate, are at least equal to or greater than the benefits to which the Participant would have been entitled, had this Plan been terminated immediately before such merger, consolidation, or transfer.

-44-

Notwithstanding any other provision hereof to the contrary, to the extent specified in a resolution of the board of directors of the Primary Sponsor, or such person or persons to whom authority has been delegated by such board of directors,  assets and liabilities in an amount determined by the Actuary may be transferred to another company’s qualified plan.  Thereafter, the Primary Sponsor and the Plan shall be completely discharged of all obligations to a Participant, the company to which an employee is transferred and the plan to which assets are transferred.

SECTION 14

ADOPTION OF PLAN BY AFFILIATES

Any trade or business related to the Primary Sponsor by function or operation and any Affiliate, if the trade or business or Affiliate is authorized to do so by a written direction adopted by the Primary Sponsor, may adopt the Plan and Trust by action of the trade of business or Affiliate.  Any adoption shall be evidenced by certified copies of the resolutions indicating the adoption and by the execution of the Trust by the adopting trade or business or Affiliate.  The resolution shall state the Effective Date for the purpose of the adopting trade or business Affiliate and, for the purpose of Code Section 415, the limitation year as to the adopting trade business or Affiliate.  However, if the Plan and Trust as adopted by a trade or business or Affiliate under the foregoing provisions shall fail to receive the initial approval of the Internal Revenue Service as a qualified Plan and Trust, any contributions by the adopting trade or business or Affiliate after payment of all expenses will be returned to the adopting trade or business or Affiliate free of any trust, and the Plan and Trust shall terminate as to the adopting trade or business or Affiliate.

SECTION 15

RETURN OF CONTRIBUTIONS

All contributions to the Plan are conditioned upon deductibility under Code Section 404.  To the extent permitted by the Code and other applicable laws and regulations thereunder, upon a Plan Sponsor’s request, a contribution which was made by a mistake-in-fact, or conditioned upon initial qualification or upon the deductibility of the contribution under Section 404 of the Code shall be returned to a Plan Sponsor within one (1) year after the payment of the contribution, the denial of the qualification, or the disallowance of the deduction (to the extent disallowed), whichever is applicable.  The amount to be returned to the Plan Sponsor shall be the excess of the contribution above the amount that would have been contributed had the mistake of fact or the mistake in determining the deduction not occurred, less any net loss attributable to such excess.  Any net income attributable to such excess shall not be returned to the Plan Sponsor.  In the event of a contribution which was conditioned upon initial qualification of the Plan, the amount to be returned to the Plan sponsor shall be all of the assets of the Fund.

-45-

SECTION 16

INCORPORATION OF SPECIAL LIMITATIONS

Appendices A, B, C and D to the Plan attached hereto are hereby incorporated by reference and the provisions of the same shall apply notwithstanding anything to the contrary herein.

[Signature is on the following page.]

-46-

IN WITNESS WHEREOF, the Primary Sponsor has caused this indenture to be executed as of the day and year first above written.

RUBY TUESDAY, INC.

By: /s/ James J. Buettgen

James J. Buettgen

President, Chairman, and Chief Executive Officer

ATTEST:

/s/ Brian Wanamaker

Brian Wanamaker

Assistant Secretary

[CORPORATE SEAL]

-47-

APPENDIX A

LIMITATION ON BENEFITS

SECTION 1

(a)Notwithstanding any other provision of the Plan, in no event shall the annual pension benefit of a Participant attributable to Plan Sponsor contributions and payable as a straight life annuity at Normal Retirement Age exceed the lesser of (1) the dollar limit in effect under Code Section 415(b)(1)(A) $210,000, subject to adjustment in accordance with regulations issued by the Secretary of Treasury or other applicable provision of law, provided that any adjustment shall be effective as of January 1 of each calendar year and shall be applicable with respect to the limitation year ending with or within each calendar year or (2) 100% of the Participant’s average Annual Compensation for the three consecutive calendar years during which (A) he was a Participant and (B) his aggregate Annual Compensation from a Plan Sponsor was the highest (the “High Consecutive Three Years”).  For purposes of determining a Participant’s High Consecutive Three Years, any “break in service,” within the meaning of Treas. Reg. Section 1.415(b)-1(a)(5)(iii), will be disregarded.

(b)Effective July 1, 2008, the limitations in Section 1(a) shall be adjusted annually permitting an increase in a Participant’s periodic payments effective for payments due on or after January 1 of the limitation year for which the increase in the limitation year is effective.  The adjusted limitation in Section 1 shall be equal to the greater of the amount that would be permitted without regard to the adjustment multiplied by a fraction, the numerator of which is the limitation under Section 1(a)(1) or Section 1(a)(2), whichever is less, taking into account the adjustment and the denominator of which is the limitation in effect for the immediately preceding limitation year.

(1)The limitation under Section 1(a)(1) shall be adjusted for each limitation year by multiplying the limitation applicable for the immediately preceding limitation year by an annual adjustment factor, with any result that is not a multiple of $5,000 rounded down to the next lowest multiple of $5,000.  For purposes of this Section 1(b)(1), the “annual adjustment factor” is a fraction, the numerator of which is the value of the applicable index for the calendar quarter ending September 30 of the calendar year preceding the calendar year for which the adjustment is being made and the denominator of which is the value of such index for the calendar quarter beginning July 1, 2001; provided that if the fraction determined under this sentence is less than one (1), then such fraction shall be deemed to be equal to (1).

(2)The limitation under Section 1(a)(2) shall be adjusted for each limitation year after the Participant’s termination of employment by multiplying

A-1

the limitation applicable for the immediately preceding limitation year by an annual adjustment factor.  For purposes of this Section 1(c), the “annual adjustment factor” is a fraction, the numerator of which is the value of the “applicable index” for the calendar quarter ending September 30 of the calendar year preceding the calendar year for which the adjustment is being made and the denominator of which is the value of such index for the September 30 of the calendar year prior to the calendar year used in the numerator; provided that if the fraction determined under this sentence is less than one (1), then such fraction shall be deemed to be equal to one (1) and the adjustment factor for future calendar years will be determined in accordance with revenue rulings, notices, or other published guidance prescribed by the Commissioner of the Internal Revenue Service and published in the Internal Revenue Bulletin.  Any rehired Participant’s High Consecutive Three Years will be the amount determined under Section 1(a)(2) or, if greater, the amount determined under Treas. Reg. Section 1.415(d)-1(a)(2)(iii).

(3)For purposes of this Section 1(b), the “applicable index” is determined consistent with the procedures to adjust benefit amounts under Section 215(i)(2)(A) of the Social Security Act (92 P.L. 336).

(c)For purposes of determining the annual pension benefit due to Plan Sponsor contributions, a Participant will be treated as having elected a straight life annuity for his own life commencing on the same date as the form of benefit chosen by the Participant, which annuity is the actuarial equivalent of the form of benefit chosen by the Participant.

(1)For purposes of this Subsection (c), the actuarial equivalent of the Participant’s chosen form of benefit will be determined by whichever of the following factors results in the largest equivalent straight life annuity:

   (A)for benefits to which Code Section 417(e)(3) does not apply the actuarially equivalent straight life annuity benefit is the greater of:

   (i)           the annual amount of the straight life annuity (if any) payable to the Participant under the Plan commencing at the same annuity starting date as the form of benefit payable to the Participant; or

   (ii)           the annual amount of the straight life annuity commencing at the same annuity starting date that has the same actuarial present value as the form of benefit payable to the Participant, computed using a five percent (5%) interest assumption and the applicable mortality table described in Treas. Reg. Section 1.417(e)-1(d)(2) for that annuity starting date.

A-2

(B)for benefits to which Code Section 417(e)(3) applies, the actuarial equivalent straight life annuity is the annual amount of the straight life annuity commencing at the annuity starting date that has the same actuarial present value as the particular form of benefit payable computed using whichever of the following factors yields the greatest benefit:

(i)           the interest rate and mortality table, or tabular factor, specified in the Plan;

(ii)           a five and a half percent (5.5%) interest rate assumption and the applicable mortality table for the distribution under Treas. Reg. Section 1.417(e)-1(d)(2); or

(iii)          the applicable interest rate for the distribution under Treas. Reg. Section 1.417(e)-1(d)(3) and the applicable mortality table for the distribution under Treas. Reg. Section 1.417(e)-1(d)(2), with the amount so computed divided by 1.05.

Notwithstanding the foregoing, for distributions to which Code Section 417(e)(3) applies which have annuity starting dates in the Plan Years beginning in 2004 or 2005, except as provided in Section 101(d)(3) of the Pension Funding Equity Act of 2004 (108 P.L. 218), the actuarial equivalent straight life annuity is the annual amount of the straight life annuity commencing at the annuity starting date that has the same actuarial present value as the particular form of benefit payable, computed using the interest rate and mortality table (or tabular factor) specified in the Plan or a five and a half percent (5.5%) interest rate assumption and the applicable mortality table for the distribution under Treas. Reg. Section 1.417(e)-1(d)(2), whichever yields the greater benefit.

(2)For purposes of the adjustments under paragraph (1) of this Subsection (c) above, the following benefits are not taken into account:

(A)Survivor benefits payable to a surviving spouse under a qualified joint and survivor annuity (as defined in Code Section 417(b)), whether or not such qualified joint and survivor annuity is paid in conjunction with some other form of benefit (such as a single-sum distribution), to the extent that such benefits would not be payable if the participant’s benefit were not paid in the form of a qualified joint and survivor annuity.

(B)Ancillary benefits (other than a social security supplement described in Code Section 411(a)(9) and Treas. Reg. Section 1.411(a)-7(c)(4)) that are not directly related to retirement benefits, such as

A-3

preretirement disability benefits not in excess of the qualified disability benefit, preretirement incidental death benefits (including a qualified preretirement survivor annuity), and post-retirement medical benefits.

(3)Notwithstanding the preceding provisions of this Section 1, no adjustment is required to a benefit that is paid in a form that is not a straight life annuity to take into account the inclusion in that form of an automatic benefit increase feature if the benefit is paid in a form to which Code Section 417(e)(3) does not apply and the form of benefit, without regard to the automatic benefit increase feature, satisfies the requirements of Code Section 415(b) and this Appendix.  If the form of benefit without regard to the automatic benefit increase feature is not a straight life annuity, then the limitations in Sections 1(a)(1) and (2) are applied by reducing the limitation applicable at the annuity starting date to an actuarially equivalent amount (determined using the assumptions specified in paragraph (1)(A)(ii) of this section) that takes into account the death benefits under the form of benefit (other than the survivor portion of a qualified joint and survivor annuity).   For purposes of this paragraph (3), an “automatic benefit increase feature” is included in a form of benefit if that form provides for automatic, periodic increases to the benefits paid in that form, such as a form of benefit that automatically increases the benefit paid under that form annually according to a specified percentage or objective index, or a form of benefit that automatically increases the benefit paid in that form to share favorable investment returns on Plan assets.

SECTION 2

If annual pension benefits to a Participant commence before the Participant attains age 62, the limitation under Section 1(a)(1) of this Appendix shall be age-adjusted as provided in this Section 2.  The age-adjusted limit is determined as the actuarial equivalent of the annual amount of a straight life annuity commencing on the annuity starting date that has the same actuarial present value as a deferred straight life annuity commencing at age 62, where annual payments under the straight life annuity commencing at age 62 are equal to the adjusted Section 1(a)(1) limitation and where the actuarial equivalent straight life annuity is computed assuming a five percent (5%) interest rate and the applicable mortality table that is effective for that annuity starting date under Treas. Reg. Section 1.417(e)-1(d)(2) (expressing the Participant’s age based on completed calendar months as of the annuity starting date).  However, if the Plan has an immediately commencing straight life annuity payable at both age 62 and the age of benefit commencement, the age-adjusted limitation shall be the lesser of the age-adjusted limitation described in the immediately preceding sentence or the adjusted Section 1(a)(1) limitation multiplied by the ratio of the annual amount of the immediately commencing straight life annuity under the Plan to the annual amount of the straight life annuity under the Plan commencing at age 62, with both annual amounts determined using the Plan factors for determining the Accrued Benefit of the Participant and without applying the limitation rules under this Appendix.  No adjustment for mortality shall be taken into account in performing

A-4

the first calculation required by this Section 2 to the extent permitted by Treas. Reg. Section 1.415(b)-1(d)(2).  Notwithstanding any of the foregoing provisions of this Section 2 to the contrary, the age adjusted dollar limit may no decrease on account of an increase in age or the performance of additional service by the Participant.

SECTION 3

If annual pension benefits to a Participant commence after the Participant attains age 65, the limitation under Section 1(a)(1) of this Appendix shall be age-adjusted as provided in this Section 3.  The age-adjusted limitation is determined as the actuarial equivalent of the annual amount of a straight life annuity commencing on the annuity starting date that has the same actuarial present value as a straight life annuity commencing at age 65, where annual payments under the straight life annuity commencing at age 65 are equal to the adjusted Section 1(a)(1) limitation and where the actuarial equivalent straight life annuity is computed using a five percent (5%) interest rate and the applicable mortality table under Treas. Reg. Section 417(e)-1(d)(2) that is effective for that annuity starting date (expressing the Participant’s age based on completed calendar months as of the annuity starting date).  However, if the Plan has an immediately commencing straight life annuity payable as of the Annuity Starting Date and an immediately commencing straight life annuity payable at age 65, the age-adjusted limitation shall be the lesser of the age-adjusted limitation described in the immediately preceding sentence or the adjusted Section 1(a)(1) limitation multiplied by the adjustment ratio, which is equal to the ratio of the “adjusted immediately commencing straight life annuity” described in Treas. Reg. Section 1.415(b)-1(e)(ii) to the “adjusted age 65 straight life annuity” described in Treas. Reg. Section 1.415(b)-(1)(e)(iii).  No adjustment for mortality shall be taken into account in performing the first calculation required by this Section 3 to the extent permitted by Treas. Reg. Section 1.415(b)-1(e)(2).

SECTION 4

In the case of a Participant who has less than ten (10) years of participation in the Plan, as determined under Treas. Reg. Section 1.415(b)-1(g), the limitation under Section 1(a)(1) of this Appendix shall be determined by multiplying the otherwise applicable limit by a fraction, the numerator of which is the number of years (or part thereof) of participation in the Plan and the denominator of which is ten (10).  In the case of a Participant who has less than ten (10) years of Credited Service, the limitation under Section 1(a)(2) of this Appendix shall be determined by multiplying the otherwise applicable limit by a fraction, the numerator of which is the number of years of Credited Service (or part thereof) with a Plan Sponsor and the denominator of which is ten (10).  Notwithstanding the above, in no event shall the limitations contained in this Subsection reduce the limitations referred to in Section 1(a) of this Appendix to an amount less than one-tenth (1/10) of the applicable limitation provided in Section 1(a) (as determined without regard to this Subsection). To the extent provided in regulations promulgated by the Secretary of the Treasury, this Section shall be applied separately with respect to each change in the benefit structure of the Plan.

A-5

SECTION 5

If a Participant is a participant in any other defined benefit pension plan sponsored by Plan Sponsor and its Affiliates, his pension benefit under that plan shall be aggregated with his projected benefit under the Plan to the extent required by Code Section 415(f) and the regulations thereunder, and his benefit under the Plan shall be reduced, if necessary, so that the aggregate of the benefits does not exceed the foregoing limitations.

SECTION 6

For purposes of this Appendix, the term “limitation year” shall mean the Plan Year unless a Plan Sponsor elects, by adoption of a written resolution, to use any other twelve-month period in accordance with regulations issued by the Secretary of the Treasury.

SECTION 7

For purposes of applying the limitations of this Appendix, all defined benefit plans now or previously maintained or deemed to be maintained by a Plan Sponsor shall be treated as one defined benefit plan to the extent required by Code Section 415(f) and the regulations thereunder.

SECTION 8

In the event that the limitations set forth in this Appendix are exceeded with respect to a Participant for a particular limitation year, the Plan Administrator shall, in writing, direct the Trustee to take such actions as are permitted by the Internal Revenue Service for the correction of such errors as the Plan Administrator shall deem appropriate, specifying in each case the amount or amounts of contributions involved.

SECTION 9

For purposes of applying the limitations set forth in this Appendix, the term “Plan Sponsor” shall be deemed to mean the Plan Sponsor, its Affiliates, and any other corporations which are members of the same controlled group of corporations (as described in Code Section 414(b), as modified by Code Section 415(h)) with a Plan Sponsor, any other trades or businesses under common control (as described in Code Section 414(c), as modified by Code Section 415(h)) with a Plan Sponsor, any other corporations, partnerships or other organizations which are members of an affiliated service group (within the meaning of Code Section 414(m)) with the Plan Sponsor and any other entity required to be aggregated with a Plan Sponsor pursuant to regulations under Code Section 414(o).  For purposes of applying the limitations set forth in this Appendix, where a defined benefit plan provides for employee contributions, the annual benefit attributable to those contributions is not taken into account, but those contributions are considered a separate defined contribution plan maintained by the Plan Sponsor which is subject to the limitations set forth in this Appendix.

A-6

SECTION 10

Effective for the limitation year commencing July 1, 2008, the definition of Annual Compensation for a year that is used for purposes of applying the limitations of this Appendix shall not reflect Annual Compensation for a limitation year that is in excess of the Annual Compensation Limit that applies to that year.  Notwithstanding the foregoing, the application of the rules under this Appendix shall not reduce the Accrued Benefit of a Participant determined under the provisions of the Plan addressing these annual limitations that were in effect immediately prior to the provisions of this Appendix.  However, any additional accruals following July 1, 2008 shall not be recognized unless and until the sum of the Participant’s grandfathered benefit and additional future accruals satisfy the limitations under this Appendix.

SECTION 11

The provisions of this Appendix shall be construed in a manner consistent with the provisions of Treas. Reg. Section 1.415(a)-1 et. seq. and any successor guidance.  The foregoing provisions of this Appendix shall be interpreted in a manner consistent with the corresponding provisions of Treas. Reg. Section 1.415(a)-1 et. seq. except to the extent such corresponding provisions suggest an alternative methodology.  To the extent the foregoing provisions of this Appendix do not specify a method of application where more than one application is permissible, the default application under Treas. Reg. Section 1.415(a)-1 et. seq. shall apply.

SECTION 12

The provisions of this Appendix are generally effective July 1, 2008, except as otherwise provided in the foregoing provisions of this Appendix.  The limitations set forth in the Plan prior to July 1, 2008 shall be applicable to limitation years ending prior to July 1, 2008, except to the extent expressly provided in the foregoing provisions of this Appendix.

A-7

APPENDIX B

TOP HEAVY PROVISIONS

SECTION 1

As used in this Appendix B, the following words shall have the following meanings:

(a)“Determination Date” means, with respect to any Plan Year, the last day of the preceding Plan Year, or, in the case of the first Plan Year, means the last day of the first Plan Year.

(b)“Key Employee” means an Employee or former Employee (including a Beneficiary of a Key Employee or former Key Employee) who at any time during the Plan Year containing the Determination Date was:

(1)an officer of the Plan Sponsor or any Affiliate whose Annual Compensation was greater than $170,000 (as adjusted for changes in the cost of living as provided in regulations issued by the Secretary of the Treasury), where the term “officer” means an administrative executive in regular and continual service to the Plan Sponsor or an Affiliate; provided, however, that in no event shall the number of officers exceed the lesser of (A) fifty (50) employees; or (B) the greater of (I) three (3) employees or (II) ten percent (10%) of the number of Employees during the Plan Year, with any non-integer being increased to the next integer.  If for any year, no officer of the Plan Sponsor meets the requirements of this Paragraph (1), the highest paid officer of the Plan Sponsor for the Plan Year shall be considered an officer for purposes of this Paragraph (1);

(2)an owner of more than five percent (5%) of the outstanding stock of the Plan Sponsor or an Affiliate or more than five percent (5%) of the total combined voting power of all stock of the Plan Sponsor or an Affiliate; or

(3)an owner of more than one percent (1%) of the outstanding stock of the Plan Sponsor or an Affiliate or more than one percent (1%) of the total combined voting power of all stock of the Plan Sponsor or an Affiliate, and who in such Plan Year had Annual Compensation from the Plan Sponsor and all of its Affiliates of more than $150,000.

For purposes of determining ownership under Paragraphs (2) and (3) above, the rules set forth in Code Section 318(a)(2) shall be applied as follows (i) in the case of any Plan Sponsor or Affiliate which is a corporation, by substituting five percent (5%) for fifty percent (50%) and, (ii) in the case of any Plan Sponsor or Affiliate which is not a corporation, ownership in such Plan Sponsor or Affiliate shall be determined in accordance with Treasury Regulations which shall be based on principles similar to the principles of Code Section 318(a)(2) as modified by clause (i) hereof.

B-1

Employees other than Key Employees are sometimes referred to in this Appendix B as “non-key employees.”

(c)“Required Aggregation Group” means:

(1)           each plan of a Plan Sponsor and its Affiliates which qualifies under Code Section 401(a) in which a Key Employee is a participant, and

(2)           each other plan of a Plan Sponsor and its Affiliates which qualifies under Code Section 401(a) and which enables any plan described in Subsection (a) of this Section to meet the requirements of Section 401(a)(4) or 410 of the Code.

(d)“Top-Heavy” means:

(A)           if the Plan is not included in a Required Aggregation Group, the Plan’s condition in a Plan Year for which, as of the Determination Date:

(i)           the present value of the cumulative Accrued Benefits under the Plan for all Key Employees exceeds 60 percent of the present value of the cumulative Accrued Benefits under the Plan for all Participants; and

(ii)           the Plan when included in every potential combination, if any, with any or all of:

(I)           any Required Aggregation Group, and

(II)           any plan of a Plan Sponsor which is not part of any Required Aggregation Group and which qualifies under Code Section 401(a),

is part of a Top-Heavy Group (as defined in Paragraph (2) of this Subsection); and

(B)           if the Plan is included in a Required Aggregation Group, the Plan’s condition in a Plan Year for which, as of the Determination Date:

(i)           the Required Aggregation Group is a Top-Heavy Group (as defined in Paragraph (2) of this Subsection); and

(ii)           the Required Aggregation Group when included in every potential combination, if any, with any or all of the plans of a Plan Sponsor and its Affiliates which are not part of the

B-2

 Required Aggregation Group and which qualify under Code Section 401(a) is part of a Top-Heavy Group (as defined in Paragraph (2) of this Subsection).

(C)           For purposes of Subparagraphs (A)(i) and (B)(ii) of this Paragraph (1), any combination of plans must satisfy the requirements of Code Sections 401(a)(4) and 410.

(2)           A group shall be deemed to be a Top-Heavy Group if:

(A)           the sum, as of the Determination Date, of the present value of the cumulative accrued benefits for all Key Employees under all plans included in such group exceeds

(B)           60 percent of a similar sum determined for all participants in such plans.

(3)           (A)           For purposes of this Section, the present value of the accrued benefit for any participant in a defined contribution plan as of any Determination Date or last day of a plan year shall be the sum of:

(i)           as to any defined contribution plan other than a simplified employee pension, the account balance as of the most recent valuation date occurring within the plan year ending on the Determination Date or last day of a plan year, and

(ii)           as to any simplified employee pension, the aggregate employer contributions, and

(iii)           an adjustment for contributions due as of the Determination Date or last day of a plan year.

In the case of a plan that is not subject to the minimum funding requirements of Code Section 412, the adjustment in Clause (iii) of this Subparagraph (A) shall be the amount of any contributions actually made after the valuation date but on or before the Determination Date or last day of the plan year to the extent not included under Clause (i) or (ii) of this Subparagraph (A); provided, however, that in the first plan year of the plan, the adjustment in Clause (iii) Subparagraph (A) shall also reflect the amount of any contributions made thereafter that are allocated as of a date in such first Plan Year.  In the case of a plan that is subject to the minimum funding requirements, the account balance in Clause (i) of this Subparagraph (A) and the aggregate contributions in Clause (i) of this Subparagraph (A) shall include contributions that would be allocated as of a date not later than the Determination Date or last day of a plan year,

B-3

 even though those amounts are not yet required to be contributed, and the adjustment in Clause (iii) of this Subparagraph (A) shall be the amount of any contribution actually made (or due to be made) after the valuation date to the extent permitted by regulations or other guidance of general applicability and not otherwise included under Clause (i) or (ii) of this Subparagraph (A).

(B)           For purposes of this Subsection, the present value of the accrued benefit for any participant in a defined benefit plan as of any Determination Date or last day of a plan year must be determined as of the most recent valuation date which is within a 12-month period ending on the Determination Date or last day of a plan year as if such participant terminated as of such valuation date; provided, however, that in the first plan year of a plan, the present value of the accrued benefit for a current participant must be determined either (i) as if the participant terminated service as of the Determination Date or last day of a plan year or (ii) as if the participant terminated service as of such valuation date, but taking into account the estimated accrued benefit as of the Determination Date or last day of a plan year.  For purposes of this Subparagraph (B), the valuation date must be the same valuation date used for computing plan costs for minimum funding, regardless of whether a valuation is performed that year.  The actuarial assumptions utilized in calculating the present value of the accrued benefit for any participant in a defined benefit plan for purposes of this Subparagraph (B) shall be established by the Plan Administrator after consultation with the actuary for the plan, and shall be reasonable in the aggregate and shall comport with the requirements set forth by the Internal Revenue Service in Q&A T-26 and T-27 of Regulation Section 1.416-1.

(C)           For purposes of determining the present value of the cumulative accrued benefit under a plan for any Participant in accordance with this Subsection, the present value shall be increased by the aggregate distributions made with respect to the Participant (including distributions paid on account of death to the extent they do not exceed the present value of the cumulative accrued benefit existing immediately prior to death) under each plan being considered, and under any terminated plan which if it had not been terminated would have been in a Required Aggregation Group with the Plan, during the 1-year period ending on the Determination Date or the last day of the Plan Year that falls within the calendar year in which the Determination Date falls.  In the case of a distribution made with respect to a Participant made for a reason other than severance from employment, death, or disability, this provision shall be applied by substituting a 5-year period for the 1-year period.

B-4

(D)           For purposes of this Paragraph (3), participant contributions which are deductible as “qualified retirement contributions” within the meaning of Code Section 219 or any successor, as adjusted to reflect income, gains, losses, and other credits or charges attributable thereto, shall not be considered to be part of the accrued benefits under any plan.

(E)           For purposes of this Paragraph (3), if any employee is not a Key Employee with respect to any plan for any plan year, but such employee was a Key Employee with respect to such plan for any prior plan year, any accrued benefit for such employee shall not be taken into account.

(F)           For purposes of this Paragraph (3), if any Employee has not performed any service for a Plan Sponsor or an Affiliate maintaining the plan during the 1-year period ending on the Determination Date, any accrued benefit for that Employee shall not be taken into account.

(G)           (i)           In the case of an “unrelated rollover” (as defined below) between plans which qualify under Code Section 401(a), (a) the plan providing the distribution shall count the distribution as a distribution under Subparagraph (C) of this Paragraph (3), and (b) the plan accepting the distribution shall not consider the distribution part of the accrued benefit under this Section; and

(ii)           in the case of a “related rollover” (as defined below) between plans which qualify under Code Section 401(a), (a) the plan providing the distribution shall not count the distribution as a distribution under Subparagraph (C) of this Paragraph (3), and (b) the plan accepting the distribution shall consider the distribution part of the accrued benefit under this Section.

For purposes of this Subparagraph (G), an “unrelated rollover” is a rollover as defined in Code Section 402(a)(5) or 408(d)(3) or a plan-to-plan transfer which is both initiated by the participant and made from a plan maintained by one employer to a plan maintained by another employer where the employers are not Affiliates.  For purposes of this Subparagraph (G), a “related rollover” is a rollover as defined in Code Section 402(a)(5) or 408(d)(3) or a plan-to-plan transfer which is either not initiated by the participant or made to a plan maintained by the employer or an Affiliate.

B-5

SECTION 2

Notwithstanding anything contained in the Plan to the contrary, in any Plan Year during which the Plan is Top-Heavy, a Participant’s interest in his Accrued Benefit shall not vest at any rate which is slower than the following schedule, effective as of the Anniversary Date in that Plan Year:

Full Years of Vesting Service	Percentage Vested
One year or less	0%
Two years	20%
Three years	40%
Four years	60%
Five years	100%
Six years or more	100%

The schedule set forth above in this Section of Appendix B of the Plan shall be inapplicable to a Participant who has failed to perform an Hour of Service after the Determination Date on which the Plan has become Top-Heavy.  When the Plan ceases to be Top-Heavy, the schedule set forth above in this Section of Appendix B to the Plan shall cease to be applicable; provided however, that the provisions of Section 7.6 of the Plan shall apply.

SECTION 3

(a)Notwithstanding anything contained in the Plan to the contrary, and except as otherwise provided in Subsection (b) of this Section, the Accrued Benefit derived from Plan Sponsor contributions of each Participant who is not a Key Employee, when expressed as an annual retirement benefit (as defined below), shall not be less than the applicable percentage (as defined in Subsection (b) of this Section) of the Participant’s average compensation (as defined in Subsection (d) of this Section below).

(b)For purposes of Subsection (a) of this Section, the term “applicable percentage” means the lesser of:

(1)2 percent multiplied by the number of years of service (as defined in (c) below) with a Plan Sponsor, or

(2)20 percent.

(c)For purposes of this Section:

(1)Except as provided in Paragraph (2) of this Subsection (c), years of service shall be determined under the rules of Paragraphs (4), (5), and (6) of Code Section 411(a).

B-6

(2)A year of service with a Plan Sponsor shall not be taken into account if:

  (A)the Plan was not Top-Heavy for any Plan Year ending during that year of service,

   (B)that year of service was completed in a Plan Year beginning before January 1, 1984, or

   (C)no Key Employees or former Key Employees accrued a benefit during any Plan Year ending on that year of service.

(d)(1)           For purposes of Subsection (a) of this Section, “average compensation” means the average of a Participant’s compensation (as defined in Paragraph (3) of this Subsection) for each Plan Year in the Participant’s testing period (as defined in Paragraph (2) of this Subsection).

(2)(A)      A Participant’s testing period shall be the period of consecutive Plan Years (not exceeding 5) during which the Participant had the greatest aggregate compensation from a Plan Sponsor.

   (B)The Plan Years taken into account under Subparagraph (A) of this Paragraph (2) shall not include years for which the Participant did not earn a year of service under the rules of paragraphs (4), (5) and (6) of Code Section 411(a).

(C)A Plan Year shall not be taken into account under Subparagraph (A) of this Paragraph (2) if:

   (i)           that Plan Year ends before January 1, 1984, or

   (ii)           that Plan Year begins after the close of the last Plan Year in which the Plan was Top-Heavy.

(3)For purposes of this Subsection (d), “compensation” means a Participant’s Annual Compensation calculated on the basis of a Plan Year.

(e) (1)        For purposes of Subsection (a) of this Section, the term “annual retirement benefit” means a benefit payable annually in the form of a single life annuity (with no ancillary benefits) beginning at Normal Retirement age.

(2)If the Participant’s benefit under this Plan begins at a date other than his Normal Retirement age, the Participant shall receive a benefit which is no less than the Actuarial Equivalent of the annual retirement benefit provided under this Section.

B-7

(f)The minimum Accrued Benefit described under this Section shall be provided to any Employee who is otherwise eligible for participation in the Plan, even if:

(1)The Employee fails to make mandatory employee contributions required as a condition of participation in the Plan, or

(2)The Employee’s compensation is less than a stated amount, or

(3)The Employee is not employed by a Plan Sponsor or Affiliate on a given date.

SECTION 4

Notwithstanding anything in the Plan to the contrary, this Appendix shall only apply to the extent required by Code Section 416 including, without limitation, Code Section 416(i)(4).

B-8

APPENDIX C

ACTUARIAL EQUIVALENT FACTORS

Joint and Survivor and Contingent Annuitant Factors shall be as determined by the following formulas for Employees retiring at age 65.

100% Continuation:	75% plus 1% for each year the contingent annuitant is older than the Employee or, minus 1% for each year the contingent annuitant is younger than the Employee.
75% Continuation:	80% plus 3/4% for each year the contingent annuitant is older than the Employee or minus 3/4% for each year the contingent annuitant is younger than the Employee.
50% Continuation:	86% plus 1/2% for each year the contingent annuitant is older than the Employee or minus 1/2% for each year the contingent annuitant is younger than the Employee.

The initial factor should be increased by .6% for each full year the Employee is under age 65 and decreased by .6% for each full year the Employee is over age 65.  Age shall be determined as the age on the individual’s nearest birthday.

Table Illustrating the Factors at Various Ages

Participant’s        Age	Contingent Annuitant’s        Age	100% Continuance	75% Continuance	50% Continuance
65	70	.800	.837	.885
65	65	.750	.800	.860
65	60	.700	.762	.835
65	55	.650	.725	.810
62	64	.788	.833	.888
62	60	.748	.803	.868
60	62	.800	.845	.900
55	53	.790	.845	.910

C-1

Guaranteed Period Option Factors

Age	120 Months		240 Months
65		.910	.740
64		.917	.756
63		.924	.772
62		.931	.788
61		.938	.804
60		.945	.820
59		.952	.836
58		.959	.852
57		.966	.868
56		.973	.884
55		.980	.900

Early Retirement and Terminated Employee Reduction Factors

(Plan Sections 5.1 and 7.2)

Age	Factor
64	.930
63	.860
62	.790
61	.720
60	.650
59	.620
58	.590
57	.560
56	.530
55	.500

C-2

Social Security Adjustment Option Factors

Participant’s Age at Social Security Commencement
	65		64		63		62
Years From  Benefit  Commencement  to Social  Security  Commencement 1 2 3 4 5 6 7 8 9 10	(a) Adjustment  Factor 0.886 0.787 0.701 0.626 0.560 0.502 0.451 0.406 0.366 0.331	(b) Alternate  Adjustment Factor 8.764 4.695 3.344 2.673 2.273 2.009 1.823 1.684 1.578 1.495	(a) Adjustment  Factor 0.888 0.791 0.706 0.632 0.567 0.509 0.459 0.414 0.374	(b) Alternate  Adjustment Factor 8.957 4.790 3.406 2.719 2.309 2.039 1.847 1.705 1.597	(a) Adjustment  Factor 0.891 0.795 0.712 0.638 0.573 0.516 0.466 0.421	(b) Alternate  Adjustment Factor 9.146 4.883 3.468 2.764 2.345 2.067 1.871 1.726		(a) Adjustment Factor 0.893 0.799 0.717 0.644 0.580 0.523 0.472	(b) Alternate Adjustment Factor 9.332 4.975 3.528 2.808 2.379 2.095 1.895

These factors are multiplied by the estimated Social Security benefit payable at the stated age and the result, plus the early retirement benefit payable under the Plan, is the benefit payable until the selected age is attained.

The “Alternate Adjustment Factor” will be used if, under this form of benefit, the Participant’s entire Accrued Benefit will be distributed on or before the date that the Participant’s Social Security benefit is projected to commence.

C-3

These factors shall apply to Participants who retire on or after November 1, 2004.  The table in effect prior to the adoption of the SEVENTH AMENDMENT to the Plan (as in effect prior to the November 1, 2004 restatement of the Plan) shall apply to Participants who retired before such date.

Notwithstanding the foregoing, the amount of any form of payment calculated under the table above titled “Social Security Adjustment Option Factors” shall be no less than an amount determined using the actuarial equivalent factors set forth in Section 1.2(b) of the Plan but only if such form of payment is determined to be a nondecreasing annuity exempt from the requirements of Code Section 417(e) by reason of Treasury Regulations Section 1.417(e)-1(d)(6).

C-4

APPENDIX D

MINIMUM DISTRIBUTION REQUIREMENTS

SECTION 1

GENERAL RULES

(a)           Effective Date and Precedence. The provisions of this Appendix D will apply for purposes of determining required minimum distributions for calendar years beginning with the 2003 calendar year.  The provisions of this Appendix D will take precedence over any inconsistent provisions of the Plan.

(b)           Requirements of Treasury Regulations Incorporated. All distributions required under this Appendix D will be determined and made in accordance with the Treasury Regulations promulgated under Code Section 401(a)(9).

(c)           TEFRA Section 242(b)(2) Elections. Notwithstanding the provisions of this Appendix D, distributions may be made under a designation made before January 1, 1984, in accordance with Section 242(b)(2) of the Tax Equity and Fiscal Responsibility Act (TEFRA) and the provisions of the Plan that relate to Section 242(b)(2) of TEFRA.

SECTION 2

TIME AND MANNER OF DISTRIBUTION

(a)           Required Beginning Date. The Participant’s entire interest will be distributed, or begin to be distributed, to the Participant no later than the Participant’s Required Beginning Date.

(b)           Death of Participant Before Distributions Begin. If the Participant dies before distributions begin, the Participant’s entire interest will be distributed, or begin to be distributed, no later than as follows:

(1)           If the Participant’s surviving spouse is the Participant’s sole Designated Beneficiary, then distributions to the surviving spouse will begin by December 31 of the calendar year immediately following the calendar year in which the Participant died, or by December 31 of the calendar year in which the Participant would have attained age 70½, if later.

(2)           If the Participant’s surviving spouse is not the Participant’s sole Designated Beneficiary, then distributions to the Designated Beneficiary will begin by December 31 of the calendar year immediately following the calendar year in which the Participant died.

D-1

(3)           If there is no Designated Beneficiary as of September 30 of the year following the year of the Participant’s death, the Participant’s entire interest will be distributed by December 31 of the calendar year containing the fifth anniversary of the Participant’s death.

(4)           If the Participant’s surviving spouse is the Participant’s sole Designated Beneficiary and the surviving spouse dies after the Participant but before distributions to the surviving spouse begin, this Section 2(b), other than this Section 2(b)(1), will apply as if the surviving spouse were the Participant.

For purposes of this Section 2(b) and Section 5 of Appendix D, unless Section 2(b)(4) of this Appendix D applies, distributions are considered to begin on the Participant’s Required Beginning Date. If Section 2(b) of this Appendix D applies, distributions are considered to begin on the date distributions are required to begin to the surviving spouse under Section 2(b)(1) of this Appendix D. If distributions under an annuity purchased from an insurance company irrevocably commence to the Participant before the Participant’s Required Beginning Date (or to the Participant’s surviving spouse before the date distributions are required to begin to the surviving spouse under Section 2(b)(1)), the date distributions are considered to begin is the date distributions actually commence.

(c)           Form of Distribution. Unless the Participant’s interest is distributed in the form of an annuity purchased from an insurance company or in a single sum on or before the Required Beginning Date, as of the first Distribution Calendar Year, distributions will be made in accordance with Sections 3, 4 and 5 of this Appendix D.  If the Participant’s interest is distributed in the form of an annuity purchased from an insurance company, distributions thereunder will be made in accordance with the requirements of Section 401(a)(9) of the Code and Treasury Regulations promulgated thereunder.  Any part of the Participant’s interest which is in the form of an individual account as described in Code Section 414(k) will be distributed in a manner satisfying the requirements of Code Section 40l(a)(9) and Treasury Regulations promulgated thereunder that apply to individual accounts.

SECTION 3

DETERMINATION OF AMOUNT

TO BE DISTRIBUTED EACH YEAR

(a)           General Annuity Requirements. If the Participant’s interest is paid in the form of annuity distributions under the Plan, payments under the annuity will satisfy the following requirements:

(1)           the annuity distributions will be paid in periodic payments made at intervals not longer than one year;

D-2

(2)           the distribution period will be over a life (or lives) or over a period certain not longer than the period described in Section 4 or 5 of this Appendix D;

(3)           once payments have begun over a period certain, the period certain will not be changed even if the period certain is shorter than the maximum permitted;

(4)           payments will either be nonincreasing or increase only as follows:

(A)           by an annual percentage increase that does not exceed the annual percentage increase in a cost-of-living index that is based on prices of all items and issued by the Bureau of Labor Statistics;

(B)           to the extent of the reduction in the amount of the Participant’s payments to provide for a survivor benefit upon death, but only if the Beneficiary whose life was being used to determine the distribution period described in Section 4 of this Appendix D dies or is no longer the Participant’s Beneficiary pursuant to a qualified domestic relations order within the meaning of Code Section 414(p);

(C)           to provide cash refunds of employee contributions upon the Participant’s death; or

(D)           to pay increased benefits that result from a Plan amendment.

(b)           Amount Required to be Distributed by Required Beginning Date. The amount that must be distributed on or before the Participant’s Required Beginning Date (or, if the Participant dies before distributions begin, the date distributions are required to begin under Section 2(b)(1) or (2) of this Appendix D) is the payment that is required for one payment interval.  The second payment need not be made until the end of the next payment interval even if that payment interval ends in the next calendar year.  Payment intervals are the periods for which payments are received (e.g., bimonthly, monthly, semi-annually, or annually).  All of the Participant’s benefit accruals as of the last day of the first Distribution Calendar Year will be included in the calculation of the amount of the annuity payments for payment intervals ending on or after the Participant’s Required Beginning Date.

(c)           Additional Accruals After First Distribution Calendar Year. Any additional benefits accruing to the Participant in a calendar year after the first Distribution Calendar Year will be distributed beginning with the first payment interval ending in the calendar year immediately following the calendar year in which such amount accrues.

D-3

SECTION 4

REQUIREMENTS FOR ANNUITY DISTRIBUTIONS

THAT COMMENCE DURING PARTICIPANT’S LIFETIME

(a)           Joint Life Annuities Where the Beneficiary Is Not the Participant’s Spouse.  If the Participant’s interest is being distributed in the form of a joint and survivor annuity for the joint lives of the Participant and a nonspouse Beneficiary, annuity payments to be made on or after the Participant’s Required Beginning Date to the Designated Beneficiary after the Participant’s death must not at any time exceed the applicable percentage of the annuity payment for such period that would have been payable to the Participant using the table set forth in Q&A-2 of Treasury Regulation Section 1.40l(a)(9)-6T.  If the form of distribution combines a joint and survivor annuity for the joint lives of the Participant and a nonspouse Beneficiary and a period certain annuity, the requirement in the preceding sentence will apply to annuity payments to be made to the Designated Beneficiary after the expiration of the period certain.

(b)           Period Certain Annuities. Unless the Participant’s spouse is the sole Designated Beneficiary and the form of distribution is a period certain and no life annuity, the period certain for an annuity distribution commencing during the Participant’s lifetime may not exceed the applicable distribution period for the Participant under the Uniform Lifetime Table set forth in Treasury Regulation Section 1.401 (a)(9)-9 for the calendar year that contains the annuity starting date.  If the annuity starting date precedes the year in which the Participant reaches age 70, the applicable distribution period for the Participant is the distribution period for age 70 under the Uniform Lifetime Table set forth in Treasury Regulation Section 1.401(a)(9)-9 plus the excess of 70 over the age of the Participant as of the Participant’s birthday in the year that contains the annuity starting date.  If the Participant’s spouse is the Participant’s sole Designated Beneficiary and the form of distribution is a period certain and no life annuity, the period certain may not exceed the longer of the Participant’s applicable distribution period, as determined under this Section 4(b), or the joint life and last survivor expectancy of the Participant and the Participant’s spouse as determined under the Joint and Last Survivor Table set forth in Treasury Regulation Section 1 .401(a)(9)-9, using the attained ages of the Participant and the Participant’s spouse as of the birthday of the Participant and the Participant’s spouse in the calendar year that contains the annuity starting date.

SECTION 5

REQUIREMENTS FOR MINIMUM DISTRIBUTIONS WHERE

PARTICIPANT DIES BEFORE DATE DISTRIBUTIONS BEGIN

(a)           Participant Survived by Designated Beneficiary. If the Participant dies before the date distribution of his or her interest begins and there is a Designated Beneficiary, the Participant’s entire interest will be distributed, beginning no later than the time described in Section 2(b)(1) or (2) of this Appendix D, over the life of the Designated Beneficiary or over a period certain not exceeding:

D-4

(1)           unless the annuity starting date is before the first Distribution Calendar Year, the Life Expectancy of the Designated Beneficiary determined using the Beneficiary’s age as of the Beneficiary’s birthday in the calendar year immediately following the calendar year of the Participant’s death; or

(2)           if the annuity starting date is before the first Distribution Calendar Year, the Life Expectancy of the Designated Beneficiary determined using the Beneficiary’s age as of the Beneficiary’s birthday in the calendar year that contains the annuity starting date.

(b)           No Designated Beneficiary. If the Participant dies before the date distributions begin and there is no Designated Beneficiary as of September 30 of the year following the year of the Participant’s death, distribution of the Participant’s entire interest will be completed by December 31 of the calendar year containing the fifth anniversary of the Participant’s death.

(c)           Death of Surviving Spouse Before Distributions to Surviving Spouse Begin. If the Participant dies before the date distribution of his or her interest begins, the Participant’s surviving spouse is the Participant’s sole Designated Beneficiary, and the surviving spouse dies before distributions to the surviving spouse begin, this Section 5 will apply as if the surviving spouse were the Participant, except that the time by which distributions must begin will be determined without regard to Section 2(b)(1) of this Appendix D.

SECTION 6

DEFINITIONS

As used in this Appendix D, the following words and phrases shall have the meaning set forth below:

(a)           Designated Beneficiary. The individual who is designated as the Beneficiary under Section 1.9 of the Plan and is the Designated Beneficiary under Code Section 40l(a)(9) and Treasury Regulation Section 1.401(a)(9)-4, Q&A-1.

(b)           Distribution Calendar Year. A calendar year for which a minimum distribution is required.  For distributions beginning before the Participant’s death, the first Distribution Calendar Year is the calendar year immediately preceding the calendar year which contains the Participant’s Required Beginning Date.  For distributions beginning after the Participant’s death, the first Distribution Calendar Year is the calendar year in which distributions are required to begin pursuant to Section 2(b) of this Appendix D.

(c)           Life Expectancy. Life Expectancy as computed by use of the Single Life Table in Treasury Regulations Section 1.401(a)(9)-9.

D-5

(d)           Required Beginning Date. The term “Required Beginning Date” means April 1 of the calendar year following the later of (i) the calendar year in which the Participant attains age 70½, or (ii) the calendar year in which the Participant retires; except that in the case of a Participant described in Section 1(b)(2) of Appendix B, the term “Required Beginning Date” means April 1 of the calendar year following the calendar year in which the Participant attains age 70½.

D-6

APPENDIX E

FACTORS

Morrison Retirement Plan
Early Reduction Factor Table - For Annuities to Participants < 55
For Distributions between July 1, 2014 and June 30, 2015
June 2014 Applicable Interest Rates: 1.23%   4.01%   5.09%
2014 Applicable Mortality Table:   RP-2000 PPA@2014 Combined - Unisex 50/50
2014    650    RP-2000 PPA@ProjYear Combined - Unisex 50/50
AGE	0	1	2	3	4	5	6	7	8	9	10	11
25	0.07603	0.07638	0.07672	0.07707	0.07741	0.07776	0.07811	0.07845	0.07880	0.07914	0.07949	0.07983
26	0.08018	0.08055	0.08091	0.08128	0.08164	0.08201	0.08238	0.08274	0.08311	0.08347	0.08384	0.08420
27	0.08457	0.08496	0.08535	0.08573	0.08612	0.08651	0.08690	0.08728	0.08767	0.08806	0.08845	0.08883
28	0.08922	0.08963	0.09004	0.09045	0.09086	0.09127	0.09168	0.09209	0.09250	0.09291	0.09332	0.09373
29	0.09414	0.09458	0.09501	0.09545	0.09588	0.09632	0.09675	0.09719	0.09762	0.09806	0.09849	0.09893
30	0.09936	0.09982	0.10028	0.10074	0.10120	0.10166	0.10213	0.10259	0.10305	0.10351	0.10397	0.10443
31	0.10489	0.10538	0.10587	0.10636	0.10684	0.10733	0.10782	0.10831	0.10880	0.10929	0.10977	0.11026
32	0.11075	0.11127	0.11179	0.11231	0.11282	0.11334	0.11386	0.11438	0.11490	0.11542	0.11593	0.11645
33	0.11697	0.11752	0.11807	0.11862	0.11917	0.11972	0.12027	0.12082	0.12137	0.12192	0.12247	0.12302
34	0.12357	0.12415	0.12474	0.12532	0.12590	0.12649	0.12707	0.12765	0.12824	0.12882	0.12940	0.12999
35	0.13057	0.13119	0.13181	0.13243	0.13305	0.13367	0.13430	0.13492	0.13554	0.13616	0.13678	0.13740
36	0.13802	0.13868	0.13934	0.14000	0.14066	0.14132	0.14198	0.14263	0.14329	0.14395	0.14461	0.14527
37	0.14593	0.14663	0.14733	0.14804	0.14874	0.14944	0.15014	0.15084	0.15154	0.15225	0.15295	0.15365
38	0.15435	0.15510	0.15584	0.15659	0.15734	0.15808	0.15883	0.15958	0.16032	0.16107	0.16182	0.16256
39	0.16331	0.16411	0.16490	0.16570	0.16649	0.16729	0.16808	0.16888	0.16967	0.17047	0.17126	0.17206
40	0.17285	0.17370	0.17455	0.17539	0.17624	0.17709	0.17794	0.17878	0.17963	0.18048	0.18133	0.18217
41	0.18302	0.18393	0.18483	0.18574	0.18664	0.18755	0.18845	0.18936	0.19026	0.19117	0.19207	0.19298
42	0.19388	0.19485	0.19581	0.19678	0.19774	0.19871	0.19968	0.20064	0.20161	0.20257	0.20354	0.20450
43	0.20547	0.20650	0.20753	0.20857	0.20960	0.21063	0.21166	0.21269	0.21372	0.21476	0.21579	0.21682
44	0.21785	0.21895	0.22006	0.22116	0.22227	0.22337	0.22448	0.22558	0.22668	0.22779	0.22889	0.23000
45	0.2311	0.23265	0.23420	0.23575	0.23730	0.23885	0.24041	0.24196	0.24351	0.24506	0.24661	0.24816
46	0.24971	0.25135	0.25298	0.25462	0.25626	0.25789	0.25953	0.26117	0.26280	0.26444	0.26608	0.26771
47	0.26935	0.27108	0.27281	0.27454	0.27627	0.27800	0.27974	0.28147	0.28320	0.28493	0.28666	0.28839
48	0.29012	0.29195	0.29378	0.29561	0.29744	0.29927	0.30111	0.30294	0.30477	0.30660	0.30843	0.31026
49	0.31209	0.31403	0.31597	0.31792	0.31986	0.32180	0.32374	0.32568	0.32762	0.32957	0.33151	0.33345
50	0.33539	0.33745	0.33951	0.34157	0.34363	0.34569	0.34776	0.34982	0.35188	0.35394	0.35600	0.35806
51	0.36012	0.36231	0.36450	0.36670	0.36889	0.37108	0.37327	0.37546	0.37765	0.37985	0.38204	0.38423
52	0.38642	0.38876	0.39109	0.39343	0.39576	0.39810	0.40043	0.40277	0.40510	0.40744	0.40977	0.41211
53	0.41444	0.41693	0.41942	0.42192	0.42441	0.42690	0.42939	0.43188	0.43437	0.43687	0.43936	0.44185
54	0.44434	0.44701	0.44967	0.45234	0.45500	0.45767	0.46034	0.46300	0.46567	0.46833	0.47100	0.47366

E-1

Morrison Retirement Plan
Joint & 50% Contingent Annuity Factors - For Participants < 55
	Spouse Age
Participant Age	25	26	27	28	29	30	31	32	33	34	35	36	37	38
25	0.988	0.989	0.989	0.990	0.990	0.991	0.991	0.992	0.992	0.992	0.993	0.993	0.994	0.994
26	0.987	0.988	0.988	0.989	0.989	0.990	0.990	0.991	0.991	0.992	0.992	0.993	0.993	0.993
27	0.986	0.986	0.987	0.988	0.988	0.989	0.989	0.990	0.990	0.991	0.991	0.992	0.992	0.993
28	0.985	0.985	0.986	0.986	0.987	0.988	0.988	0.989	0.989	0.990	0.990	0.991	0.991	0.992
29	0.983	0.984	0.984	0.985	0.986	0.986	0.987	0.988	0.988	0.989	0.989	0.990	0.991	0.991
30	0.982	0.982	0.983	0.984	0.984	0.985	0.986	0.986	0.987	0.988	0.988	0.989	0.990	0.990
31	0.980	0.981	0.981	0.982	0.983	0.984	0.984	0.985	0.986	0.987	0.987	0.988	0.988	0.989
32	0.978	0.979	0.980	0.981	0.981	0.982	0.983	0.984	0.984	0.985	0.986	0.987	0.987	0.988
33	0.976	0.977	0.978	0.979	0.980	0.981	0.981	0.982	0.983	0.984	0.985	0.985	0.986	0.987
34	0.974	0.975	0.976	0.977	0.978	0.979	0.980	0.981	0.981	0.982	0.983	0.984	0.985	0.985
35	0.972	0.973	0.974	0.975	0.976	0.977	0.978	0.979	0.980	0.981	0.981	0.982	0.983	0.984
36	0.970	0.971	0.972	0.973	0.974	0.975	0.976	0.977	0.978	0.979	0.980	0.981	0.982	0.982
37	0.968	0.969	0.970	0.971	0.972	0.973	0.974	0.975	0.976	0.977	0.978	0.979	0.980	0.981
38	0.965	0.966	0.967	0.968	0.969	0.970	0.971	0.972	0.974	0.975	0.976	0.977	0.978	0.979
39	0.962	0.963	0.964	0.965	0.967	0.968	0.969	0.970	0.971	0.972	0.973	0.975	0.976	0.977
40	0.959	0.960	0.962	0.963	0.964	0.965	0.966	0.967	0.969	0.970	0.971	0.972	0.973	0.975
41	0.956	0.957	0.958	0.960	0.961	0.962	0.963	0.965	0.966	0.967	0.968	0.970	0.971	0.972
42	0.953	0.954	0.955	0.956	0.958	0.959	0.960	0.961	0.963	0.964	0.965	0.967	0.968	0.969
43	0.949	0.950	0.952	0.953	0.954	0.955	0.957	0.958	0.960	0.961	0.962	0.964	0.965	0.967
44	0.945	0.947	0.948	0.949	0.951	0.952	0.953	0.955	0.956	0.958	0.959	0.960	0.962	0.963
45	0.941	0.943	0.944	0.945	0.947	0.948	0.949	0.951	0.952	0.954	0.955	0.957	0.958	0.960
46	0.937	0.938	0.940	0.941	0.942	0.944	0.945	0.947	0.948	0.950	0.951	0.953	0.955	0.956
47	0.933	0.934	0.935	0.937	0.938	0.939	0.941	0.942	0.944	0.946	0.947	0.949	0.951	0.952
48	0.928	0.929	0.930	0.932	0.933	0.935	0.936	0.938	0.939	0.941	0.943	0.945	0.946	0.948
49	0.923	0.924	0.925	0.927	0.928	0.930	0.931	0.933	0.935	0.936	0.938	0.940	0.942	0.943
50	0.917	0.918	0.920	0.921	0.923	0.924	0.926	0.928	0.929	0.931	0.933	0.935	0.937	0.938
51	0.911	0.913	0.914	0.916	0.917	0.919	0.920	0.922	0.924	0.925	0.927	0.929	0.931	0.933
52	0.905	0.906	0.908	0.909	0.911	0.913	0.914	0.916	0.918	0.920	0.921	0.923	0.925	0.927
53	0.899	0.900	0.901	0.903	0.904	0.906	0.908	0.910	0.911	0.913	0.915	0.917	0.919	0.921
54	0.892	0.893	0.894	0.896	0.898	0.899	0.901	0.903	0.905	0.906	0.908	0.910	0.913	0.915
	Spouse Age
Participant Age	39	40	41	42	43	44	45	46	47	48	49	50	51	52
25	0.994	0.995	0.995	0.995	0.995	0.996	0.996	0.996	0.996	0.997	0.997	0.997	0.997	0.997
26	0.994	0.994	0.994	0.995	0.995	0.995	0.996	0.996	0.996	0.996	0.997	0.997	0.997	0.997
27	0.993	0.993	0.994	0.994	0.994	0.995	0.995	0.995	0.996	0.996	0.996	0.996	0.997	0.997
28	0.992	0.993	0.993	0.994	0.994	0.994	0.995	0.995	0.995	0.996	0.996	0.996	0.996	0.997
29	0.992	0.992	0.992	0.993	0.993	0.994	0.994	0.994	0.995	0.995	0.995	0.996	0.996	0.996
30	0.991	0.991	0.992	0.992	0.993	0.993	0.993	0.994	0.994	0.995	0.995	0.995	0.996	0.996
31	0.990	0.990	0.991	0.991	0.992	0.992	0.993	0.993	0.994	0.994	0.994	0.995	0.995	0.995
32	0.989	0.989	0.990	0.990	0.991	0.992	0.992	0.992	0.993	0.993	0.994	0.994	0.995	0.995
33	0.987	0.988	0.989	0.989	0.990	0.991	0.991	0.992	0.992	0.993	0.993	0.994	0.994	0.994
34	0.986	0.987	0.988	0.988	0.989	0.990	0.990	0.991	0.991	0.992	0.992	0.993	0.993	0.994
35	0.985	0.986	0.986	0.987	0.988	0.989	0.989	0.990	0.991	0.991	0.992	0.992	0.993	0.993
36	0.983	0.984	0.985	0.986	0.987	0.987	0.988	0.989	0.990	0.990	0.991	0.991	0.992	0.993
37	0.982	0.983	0.984	0.984	0.985	0.986	0.987	0.988	0.988	0.989	0.990	0.991	0.991	0.992
38	0.980	0.981	0.982	0.983	0.984	0.985	0.986	0.986	0.987	0.988	0.989	0.990	0.990	0.991
39	0.978	0.979	0.980	0.981	0.982	0.983	0.984	0.985	0.986	0.987	0.988	0.988	0.989	0.990
40	0.976	0.977	0.978	0.979	0.980	0.981	0.982	0.983	0.984	0.985	0.986	0.987	0.988	0.989
41	0.973	0.975	0.976	0.977	0.978	0.979	0.981	0.982	0.983	0.984	0.985	0.986	0.987	0.988
42	0.971	0.972	0.973	0.975	0.976	0.977	0.978	0.980	0.981	0.982	0.983	0.984	0.985	0.986
43	0.968	0.969	0.971	0.972	0.974	0.975	0.976	0.978	0.979	0.980	0.981	0.982	0.983	0.985
44	0.965	0.966	0.968	0.969	0.971	0.972	0.974	0.975	0.976	0.978	0.979	0.980	0.982	0.983
45	0.962	0.963	0.965	0.966	0.968	0.969	0.971	0.972	0.974	0.975	0.977	0.978	0.979	0.981
46	0.958	0.960	0.961	0.963	0.965	0.966	0.968	0.970	0.971	0.973	0.974	0.976	0.977	0.979
47	0.954	0.956	0.958	0.959	0.961	0.963	0.965	0.966	0.968	0.970	0.971	0.973	0.975	0.976
48	0.950	0.952	0.954	0.955	0.957	0.959	0.961	0.963	0.965	0.966	0.968	0.970	0.972	0.973
49	0.945	0.947	0.949	0.951	0.953	0.955	0.957	0.959	0.961	0.963	0.965	0.967	0.968	0.970
50	0.940	0.942	0.944	0.946	0.949	0.951	0.953	0.955	0.957	0.959	0.961	0.963	0.965	0.967
51	0.935	0.937	0.939	0.941	0.944	0.946	0.948	0.950	0.952	0.955	0.957	0.959	0.961	0.963
52	0.929	0.932	0.934	0.936	0.938	0.941	0.943	0.945	0.947	0.950	0.952	0.954	0.957	0.959
53	0.923	0.926	0.928	0.930	0.933	0.935	0.937	0.940	0.942	0.945	0.947	0.950	0.952	0.954
54	0.917	0.919	0.922	0.924	0.926	0.929	0.931	0.934	0.936	0.939	0.942	0.944	0.947	0.949

E-2

	Spouse Age
Participant Age	53	54	55	56	57	58	59	60	61	62	63	64
25	0.997	0.998	0.998	0.998	0.998	0.998	0.998	0.998	0.998	0.999	0.999	0.999
26	0.997	0.997	0.998	0.998	0.998	0.998	0.998	0.998	0.998	0.998	0.999	0.999
27	0.997	0.997	0.997	0.998	0.998	0.998	0.998	0.998	0.998	0.998	0.998	0.999
28	0.997	0.997	0.997	0.997	0.997	0.998	0.998	0.998	0.998	0.998	0.998	0.998
29	0.996	0.997	0.997	0.997	0.997	0.997	0.998	0.998	0.998	0.998	0.998	0.998
30	0.996	0.996	0.997	0.997	0.997	0.997	0.997	0.998	0.998	0.998	0.998	0.998
31	0.996	0.996	0.996	0.996	0.997	0.997	0.997	0.997	0.997	0.998	0.998	0.998
32	0.995	0.996	0.996	0.996	0.996	0.997	0.997	0.997	0.997	0.997	0.998	0.998
33	0.995	0.995	0.995	0.996	0.996	0.996	0.997	0.997	0.997	0.997	0.997	0.998
34	0.994	0.995	0.995	0.995	0.996	0.996	0.996	0.997	0.997	0.997	0.997	0.997
35	0.994	0.994	0.995	0.995	0.995	0.996	0.996	0.996	0.996	0.997	0.997	0.997
36	0.993	0.994	0.994	0.994	0.995	0.995	0.995	0.996	0.996	0.996	0.997	0.997
37	0.992	0.993	0.993	0.994	0.994	0.995	0.995	0.995	0.996	0.996	0.996	0.997
38	0.991	0.992	0.993	0.993	0.994	0.994	0.995	0.995	0.995	0.996	0.996	0.996
39	0.991	0.991	0.992	0.992	0.993	0.993	0.994	0.994	0.995	0.995	0.996	0.996
40	0.990	0.990	0.991	0.992	0.992	0.993	0.993	0.994	0.994	0.995	0.995	0.996
41	0.988	0.989	0.990	0.991	0.991	0.992	0.993	0.993	0.994	0.994	0.995	0.995
42	0.987	0.988	0.989	0.990	0.990	0.991	0.992	0.992	0.993	0.993	0.994	0.995
43	0.986	0.987	0.987	0.988	0.989	0.990	0.991	0.991	0.992	0.993	0.993	0.994
44	0.984	0.985	0.986	0.987	0.988	0.989	0.990	0.990	0.991	0.992	0.993	0.993
45	0.982	0.983	0.984	0.985	0.986	0.987	0.988	0.989	0.990	0.991	0.992	0.992
46	0.980	0.981	0.982	0.984	0.985	0.986	0.987	0.988	0.989	0.990	0.991	0.991
47	0.978	0.979	0.980	0.982	0.983	0.984	0.985	0.986	0.987	0.988	0.989	0.990
48	0.975	0.977	0.978	0.979	0.981	0.982	0.983	0.985	0.986	0.987	0.988	0.989
49	0.972	0.974	0.975	0.977	0.978	0.980	0.981	0.983	0.984	0.985	0.986	0.987
50	0.969	0.971	0.972	0.974	0.976	0.977	0.979	0.980	0.982	0.983	0.985	0.986
51	0.965	0.967	0.969	0.971	0.973	0.975	0.976	0.978	0.980	0.981	0.982	0.984
52	0.961	0.963	0.965	0.968	0.970	0.972	0.973	0.975	0.977	0.979	0.980	0.982
53	0.957	0.959	0.961	0.964	0.966	0.968	0.970	0.972	0.974	0.976	0.977	0.979
54	0.952	0.954	0.957	0.959	0.962	0.964	0.966	0.969	0.971	0.973	0.975	0.976

E-3

Morrison Retirement Plan
Joint & 50% Contingent Annuity Factors - For Participants < 55
	Spouse Age
Participant Age	25	26	27	28	29	30	31	32	33	34	35	36	37	38
25	0.982	0.983	0.984	0.985	0.985	0.986	0.987	0.987	0.988	0.989	0.989	0.990	0.990	0.991
26	0.981	0.981	0.982	0.983	0.984	0.985	0.985	0.986	0.987	0.988	0.988	0.989	0.989	0.990
27	0.979	0.980	0.981	0.982	0.982	0.983	0.984	0.985	0.986	0.986	0.987	0.988	0.988	0.989
28	0.977	0.978	0.979	0.980	0.981	0.982	0.982	0.983	0.984	0.985	0.986	0.986	0.987	0.988
29	0.975	0.976	0.977	0.978	0.979	0.980	0.981	0.982	0.983	0.983	0.984	0.985	0.986	0.987
30	0.973	0.974	0.975	0.976	0.977	0.978	0.979	0.980	0.981	0.982	0.983	0.984	0.984	0.985
31	0.970	0.971	0.972	0.974	0.975	0.976	0.977	0.978	0.979	0.980	0.981	0.982	0.983	0.984
32	0.968	0.969	0.970	0.971	0.972	0.974	0.975	0.976	0.977	0.978	0.979	0.980	0.981	0.982
33	0.965	0.966	0.967	0.969	0.970	0.971	0.972	0.974	0.975	0.976	0.977	0.978	0.979	0.980
34	0.962	0.963	0.965	0.966	0.967	0.968	0.970	0.971	0.972	0.974	0.975	0.976	0.977	0.978
35	0.959	0.960	0.962	0.963	0.964	0.966	0.967	0.968	0.970	0.971	0.972	0.974	0.975	0.976
36	0.956	0.957	0.958	0.960	0.961	0.963	0.964	0.966	0.967	0.968	0.970	0.971	0.973	0.974
37	0.952	0.954	0.955	0.956	0.958	0.959	0.961	0.963	0.964	0.966	0.967	0.969	0.970	0.971
38	0.948	0.950	0.951	0.953	0.954	0.956	0.958	0.959	0.961	0.962	0.964	0.966	0.967	0.969
39	0.944	0.946	0.947	0.949	0.951	0.952	0.954	0.956	0.957	0.959	0.961	0.962	0.964	0.966
40	0.940	0.942	0.943	0.945	0.947	0.948	0.950	0.952	0.954	0.955	0.957	0.959	0.961	0.962
41	0.936	0.937	0.939	0.941	0.942	0.944	0.946	0.948	0.950	0.951	0.953	0.955	0.957	0.959
42	0.931	0.933	0.934	0.936	0.938	0.940	0.941	0.943	0.945	0.947	0.949	0.951	0.953	0.955
43	0.926	0.927	0.929	0.931	0.933	0.935	0.937	0.939	0.941	0.942	0.945	0.947	0.949	0.951
44	0.920	0.922	0.924	0.926	0.928	0.930	0.931	0.933	0.936	0.938	0.940	0.942	0.944	0.946
45	0.915	0.916	0.918	0.920	0.922	0.924	0.926	0.928	0.930	0.932	0.935	0.937	0.939	0.941
46	0.909	0.910	0.912	0.914	0.916	0.918	0.920	0.922	0.924	0.927	0.929	0.931	0.934	0.936
47	0.902	0.904	0.906	0.908	0.910	0.912	0.914	0.916	0.918	0.921	0.923	0.925	0.928	0.930
48	0.895	0.897	0.899	0.901	0.903	0.905	0.907	0.910	0.912	0.914	0.917	0.919	0.922	0.924
49	0.888	0.890	0.892	0.894	0.896	0.898	0.900	0.903	0.905	0.907	0.910	0.912	0.915	0.918
50	0.881	0.882	0.884	0.886	0.889	0.891	0.893	0.895	0.898	0.900	0.903	0.905	0.908	0.910
51	0.873	0.874	0.876	0.878	0.881	0.883	0.885	0.887	0.890	0.892	0.895	0.897	0.900	0.903
52	0.864	0.866	0.868	0.870	0.872	0.874	0.877	0.879	0.881	0.884	0.887	0.889	0.892	0.895
53	0.855	0.857	0.859	0.861	0.863	0.865	0.868	0.870	0.873	0.875	0.878	0.881	0.883	0.886
54	0.846	0.848	0.850	0.852	0.854	0.856	0.858	0.861	0.863	0.866	0.869	0.871	0.874	0.877
	Spouse Age
Participant Age	39	40	41	42	43	44	45	46	47	48	49	50	51	52
25	0.991	0.992	0.992	0.993	0.993	0.994	0.994	0.994	0.995	0.995	0.995	0.995	0.996	0.996
26	0.991	0.991	0.992	0.992	0.992	0.993	0.993	0.994	0.994	0.994	0.995	0.995	0.995	0.996
27	0.990	0.990	0.991	0.991	0.992	0.992	0.993	0.993	0.994	0.994	0.994	0.995	0.995	0.995
28	0.989	0.989	0.990	0.990	0.991	0.991	0.992	0.992	0.993	0.993	0.994	0.994	0.994	0.995
29	0.987	0.988	0.989	0.989	0.990	0.991	0.991	0.992	0.992	0.993	0.993	0.993	0.994	0.994
30	0.986	0.987	0.988	0.988	0.989	0.990	0.990	0.991	0.991	0.992	0.992	0.993	0.993	0.994
31	0.985	0.985	0.986	0.987	0.988	0.989	0.989	0.990	0.990	0.991	0.992	0.992	0.993	0.993
32	0.983	0.984	0.985	0.986	0.987	0.987	0.988	0.989	0.989	0.990	0.991	0.991	0.992	0.992
33	0.981	0.982	0.983	0.984	0.985	0.986	0.987	0.988	0.988	0.989	0.990	0.990	0.991	0.992
34	0.979	0.981	0.982	0.983	0.984	0.985	0.986	0.986	0.987	0.988	0.989	0.989	0.990	0.991
35	0.977	0.979	0.980	0.981	0.982	0.983	0.984	0.985	0.986	0.987	0.988	0.988	0.989	0.990
36	0.975	0.977	0.978	0.979	0.980	0.981	0.982	0.983	0.984	0.985	0.986	0.987	0.988	0.989
37	0.973	0.974	0.976	0.977	0.978	0.979	0.981	0.982	0.983	0.984	0.985	0.986	0.987	0.988
38	0.970	0.972	0.973	0.975	0.976	0.977	0.979	0.980	0.981	0.982	0.983	0.984	0.985	0.986
39	0.967	0.969	0.970	0.972	0.973	0.975	0.976	0.978	0.979	0.980	0.982	0.983	0.984	0.985
40	0.964	0.966	0.967	0.969	0.971	0.972	0.974	0.975	0.977	0.978	0.980	0.981	0.982	0.983
41	0.961	0.962	0.964	0.966	0.968	0.969	0.971	0.973	0.974	0.976	0.977	0.979	0.980	0.981
42	0.957	0.959	0.961	0.963	0.964	0.966	0.968	0.970	0.972	0.973	0.975	0.976	0.978	0.979
43	0.953	0.955	0.957	0.959	0.961	0.963	0.965	0.967	0.969	0.970	0.972	0.974	0.975	0.977
44	0.948	0.950	0.953	0.955	0.957	0.959	0.961	0.963	0.965	0.967	0.969	0.971	0.973	0.974
45	0.943	0.946	0.948	0.950	0.953	0.955	0.957	0.959	0.961	0.964	0.966	0.968	0.970	0.971
46	0.938	0.941	0.943	0.946	0.948	0.950	0.953	0.955	0.957	0.960	0.962	0.964	0.966	0.968
47	0.933	0.935	0.938	0.940	0.943	0.945	0.948	0.950	0.953	0.955	0.958	0.960	0.962	0.965
48	0.927	0.929	0.932	0.935	0.937	0.940	0.943	0.945	0.948	0.951	0.953	0.956	0.958	0.961
49	0.920	0.923	0.926	0.928	0.931	0.934	0.937	0.940	0.942	0.945	0.948	0.951	0.953	0.956
50	0.913	0.916	0.919	0.922	0.925	0.928	0.931	0.934	0.937	0.940	0.942	0.945	0.948	0.951
51	0.906	0.909	0.912	0.915	0.918	0.921	0.924	0.927	0.930	0.933	0.936	0.940	0.943	0.946
52	0.898	0.901	0.904	0.907	0.910	0.913	0.917	0.920	0.923	0.927	0.930	0.933	0.936	0.940
53	0.889	0.892	0.896	0.899	0.902	0.905	0.909	0.912	0.916	0.919	0.923	0.926	0.930	0.933
54	0.880	0.884	0.887	0.890	0.893	0.897	0.900	0.904	0.908	0.911	0.915	0.919	0.922	0.926

E-4

	Spouse Age
Participant Age	53	54	55	56	57	58	59	60	61	62	63	64
25	0.996	0.996	0.997	0.997	0.997	0.997	0.997	0.998	0.998	0.998	0.998	0.998
26	0.996	0.996	0.996	0.997	0.997	0.997	0.997	0.997	0.998	0.998	0.998	0.998
27	0.996	0.996	0.996	0.996	0.997	0.997	0.997	0.997	0.997	0.997	0.998	0.998
28	0.995	0.995	0.996	0.996	0.996	0.996	0.997	0.997	0.997	0.997	0.997	0.998
29	0.995	0.995	0.995	0.996	0.996	0.996	0.996	0.997	0.997	0.997	0.997	0.997
30	0.994	0.994	0.995	0.995	0.995	0.996	0.996	0.996	0.997	0.997	0.997	0.997
31	0.994	0.994	0.994	0.995	0.995	0.995	0.996	0.996	0.996	0.996	0.997	0.997
32	0.993	0.993	0.994	0.994	0.995	0.995	0.995	0.996	0.996	0.996	0.996	0.997
33	0.992	0.993	0.993	0.994	0.994	0.994	0.995	0.995	0.996	0.996	0.996	0.996
34	0.991	0.992	0.993	0.993	0.994	0.994	0.994	0.995	0.995	0.995	0.996	0.996
35	0.991	0.991	0.992	0.992	0.993	0.993	0.994	0.994	0.995	0.995	0.995	0.996
36	0.990	0.990	0.991	0.992	0.992	0.993	0.993	0.994	0.994	0.995	0.995	0.995
37	0.988	0.989	0.990	0.991	0.991	0.992	0.993	0.993	0.994	0.994	0.995	0.995
38	0.987	0.988	0.989	0.990	0.991	0.991	0.992	0.992	0.993	0.994	0.994	0.995
39	0.986	0.987	0.988	0.989	0.989	0.990	0.991	0.992	0.992	0.993	0.993	0.994
40	0.984	0.985	0.986	0.987	0.988	0.989	0.990	0.991	0.991	0.992	0.993	0.993
41	0.983	0.984	0.985	0.986	0.987	0.988	0.989	0.990	0.991	0.991	0.992	0.993
42	0.981	0.982	0.983	0.984	0.986	0.987	0.988	0.989	0.989	0.990	0.991	0.992
43	0.978	0.980	0.981	0.983	0.984	0.985	0.986	0.987	0.988	0.989	0.990	0.991
44	0.976	0.978	0.979	0.981	0.982	0.983	0.985	0.986	0.987	0.988	0.989	0.990
45	0.973	0.975	0.977	0.978	0.980	0.981	0.983	0.984	0.985	0.986	0.987	0.988
46	0.970	0.972	0.974	0.976	0.977	0.979	0.981	0.982	0.983	0.985	0.986	0.987
47	0.967	0.969	0.971	0.973	0.975	0.976	0.978	0.980	0.981	0.983	0.984	0.985
48	0.963	0.965	0.967	0.970	0.972	0.974	0.975	0.977	0.979	0.980	0.982	0.983
49	0.959	0.961	0.964	0.966	0.968	0.970	0.972	0.974	0.976	0.978	0.980	0.981
50	0.954	0.957	0.959	0.962	0.964	0.967	0.969	0.971	0.973	0.975	0.977	0.979
51	0.949	0.952	0.954	0.957	0.960	0.962	0.965	0.967	0.970	0.972	0.974	0.976
52	0.943	0.946	0.949	0.952	0.955	0.958	0.961	0.963	0.966	0.968	0.970	0.973
53	0.937	0.940	0.943	0.947	0.950	0.953	0.956	0.959	0.961	0.964	0.967	0.969
54	0.930	0.933	0.937	0.940	0.944	0.947	0.950	0.954	0.957	0.959	0.962	0.965

E-5

EX-12.1

Ruby Tuesday, Inc
Unaudited Computation of Ratio of Consolidated Earnings to Fixed Charges
(Dollar Amounts in Millions)
	Twenty-six Weeks Ended		Fiscal Year Ended
	December 2,			June 3,		June 4,		June 5,		May 31,		June 1,
	2014			2014		2013		2012		2011		2010
Earnings before fixed charges:
(Loss)/income from continuing operations before income taxes	$	(9.9)	$	(69.6)	$	(21.9)	$	(8.6)	$	57.1	$	58.6
Add equity in losses (deduct equity in earnings) of equity interest		-		-		-		-		0.6		0.3
Less Capitalized interest		0.2		0.5		0.5		0.5		0.6		0.6
		(9.7)		(69.1)		(21.4)		(8.1)		58.3		59.5
Fixed charges:
Interest expense		11.3		25.0		26.7		23.5		14.1		18.0
Interest portion of rent expense		7.7		16.0		16.6		15.8		14.7		14.0
Total fixed charges		19.0		41.0		43.3		39.3		28.8		32.0
Adjusted earnings from continuing operations before income taxes available to cover fixed charges	$	9.3	$	(28.1)	$	21.9	$	31.2	$	87.1	$	91.5
Ratio of earnings to fixed charges		.49		(0.69)		0.51		0.79		3.03		2.86
Amount by which earnings were insufficient to cover fixed charges		(9.7)		(69.1)	$	(21.4)		(8.1)		N/A		N/A
* We are presenting the ratio above solely pursuant to the requirement set forth in Item 503 of Regulation S-K.  The earnings and fixed charges in the above ratio are calculated using the definitions as set for by Regulation S-K.

EX-31.1

EXHIBIT 31.1

CERTIFICATION PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, James J. Buettgen, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Ruby Tuesday, Inc.;

2.   Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.   Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.   The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)   Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)   Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)   Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)   Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of the annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.   The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)   All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)   Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: January 12, 2015	/s/ James J. Buettgen
	James J. Buettgen
	Chairman of the Board, President,
	and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Jill M. Golder, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Ruby Tuesday, Inc.;

2.   Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.   Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.   The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)   Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)   Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)   Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)   Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of the annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.   The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)   All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)   Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: January 12, 2015	/s/ Jill M. Golder
	Jill M. Golder
	Executive Vice President,
	Chief Financial Officer, Treasurer, and Assistant Secretary

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Ruby Tuesday, Inc. (the “Company”) on Form 10-Q for the quarter ended December 2, 2014 (the “Report”), as filed with the Securities and Exchange Commission on the date hereof, I, James J. Buettgen, Chairman of the Board, President, and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)   The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)   The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: January 12, 2015	/s/ James J. Buettgen
	James J. Buettgen
	Chairman of the Board, President, and Chief Executive Officer

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Ruby Tuesday, Inc. (the “Company”) on Form 10-Q for the quarter ended December 2, 2014 (the “Report”), as filed with the Securities and Exchange Commission on the date hereof, I, Jill M. Golder, Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)   The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)   The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: January 12, 2015	/s/ Jill M. Golder
	Jill M. Golder
	Executive Vice President,
	Chief Financial Officer, Treasurer, and Assistant Secretary

XML

Note E - Accounts Receivable (Details) (USD $) In Thousands, unless otherwise specified	Dec. 02, 2014	Jun. 03, 2014
Note E - Accounts Receivable (Details) [Line Items]
Other Receivables, Net, Current	$ 1,645	$ 1,014
Due from Distributor [Member]
Note E - Accounts Receivable (Details) [Line Items]
Other Receivables, Net, Current	800	400
Sales and Other Miscellaneous Tax Refunds [Member]
Note E - Accounts Receivable (Details) [Line Items]
Other Receivables, Net, Current	200	200
Settlement Proceeds from Lawsuit [Member]
Note E - Accounts Receivable (Details) [Line Items]
Other Receivables, Net, Current	$ 200

XML

Note K - Income Taxes (Details) (USD $)	3 Months Ended			6 Months Ended
	Dec. 02, 2014	Sep. 02, 2014	Dec. 03, 2013	Dec. 02, 2014	Dec. 03, 2013	Jun. 03, 2014
Note K - Income Taxes (Details) [Line Items]
Reclassification Of Unrecognized Tax Benefit Amount		$ 5,000,000
Income Tax Expense (Benefit)	(595,000)		(1,910,000)	(3,229,000)	(7,063,000)
Immaterial Prior Period Correction	3,200,000
Deferred Tax Assets, Valuation Allowance	57,600,000			57,600,000		54,600,000
Unrecognized Tax Benefits	4,400,000			4,400,000		7,000,000
Unrecognized Tax Benefits that Would Impact Effective Tax Rate	2,500,000			2,500,000		2,600,000
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued	400,000			400,000		500,000
Accrual Interest and Penalties Increase Decrease				100,000
Reasonably Possible Amounts Will Change Within Next Twelve Months [Member]
Note K - Income Taxes (Details) [Line Items]
Unrecognized Tax Benefits	$ 300,000			$ 300,000

XML

Note I - Closure and Impairments Expense (Details) - Future Liabilites Associated with Closed Properties (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Dec. 02, 2014	Jun. 02, 2014
Future Liabilites Associated with Closed Properties [Abstract]
Balance at June 3, 2014		$ 10,873
Closing expense including rent and other lease charges	761
Payments	(2,309)
Other	(340)
Balance at December 2, 2014	$ 8,985	$ 10,873

XML

Note L - Share-based Employee Compensation (Details) (USD $)	3 Months Ended		6 Months Ended
	Dec. 02, 2014	Dec. 03, 2013	Dec. 02, 2014	Dec. 03, 2013
Note L - Share-based Employee Compensation (Details) [Line Items]
Share-based Compensation			$ 3,720,000	$ 4,049,000
Employee Stock Option [Member] | SIP and 1996 SIP [Member]
Note L - Share-based Employee Compensation (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant (in Shares)	1,899,000		1,899,000
Employee Stock Option [Member]
Note L - Share-based Employee Compensation (Details) [Line Items]
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized	2,400,000		2,400,000
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition			1 year 6 months
Restricted Stock [Member] | SIP and 1996 SIP [Member]
Note L - Share-based Employee Compensation (Details) [Line Items]
Share-based Compensation	2,000,000	2,300,000	3,700,000	4,000,000
Restricted Stock [Member]
Note L - Share-based Employee Compensation (Details) [Line Items]
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized	$ 4,800,000		$ 4,800,000
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition			1 year 6 months
SIP and 1996 SIP [Member]
Note L - Share-based Employee Compensation (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period			3 years
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term			7 years
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number (in Shares)	2,457,000		2,457,000
SIP [Member]
Note L - Share-based Employee Compensation (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized (in Shares)	4,356,000		4,356,000
SIP 1996 [Member]
Note L - Share-based Employee Compensation (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized (in Shares)	4,356,000		4,356,000

XML

Note I - Closure and Impairments Expense (Details) (USD $) In Thousands, unless otherwise specified	Dec. 02, 2014	Jun. 02, 2014	Jun. 04, 2014
Note I - Closure and Impairments Expense (Details) [Line Items]
Operating Lease Obligation	$ 8,985	$ 10,873
Rent and Other [Member]
Note I - Closure and Impairments Expense (Details) [Line Items]
Operating Lease Obligation	$ 8,800		$ 10,500

XML

Note P – Supplemental Condensed Consolidating Financial Statements (Tables)

6 Months Ended

Dec. 02, 2014

Disclosure Text Block Supplement [Abstract]

Condensed Balance Sheet [Table Text Block]

	Parent			Guarantors			Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	47,866		$	304		$	-		$	48,170
Accounts receivable		2,088			3,543			-			5,631
Inventories		18,762			7,958			-			26,720
Income tax receivable		143,164			-			(139,990	)		3,174
Other current assets		16,694			3,040			-			19,734
Total current assets		228,574			14,845			(139,990	)		103,429
Property and equipment, net		570,506			201,320			-			771,826
Investment in subsidiaries		134,430			-			(134,430	)		-
Due from/(to) subsidiaries		79,676			220,055			(299,731	)		-
Other assets		47,471			11,989			-			59,460
Total assets	$	1,060,657		$	448,209		$	(574,151	)	$	934,715
Liabilities & Shareholders’ Equity
Current liabilities:
Accounts payable	$	21,339		$	5,626		$	-		$	26,965
Accrued and other current liabilities		43,125			34,346			-			77,471
Current maturities of long-term debt, including capital leases		(354	)		4,860			-			4,506
Deferred income taxes		3,062			(3,004	)		-			58
Income tax payable		-			139,990			(139,990	)		-
Total current liabilities		67,172			181,818			(139,990	)		109,000
Long-term debt and capital leases, less current maturities		213,204			34,711			-			247,915
Deferred income taxes		(1,867	)		4,091			-			2,224
Due to/(from) subsidiaries		220,055			79,676			(299,731	)		-
Other deferred liabilities		102,762			13,483			-			116,245
Total liabilities		601,326			313,779			(439,721	)		475,384
Shareholders’ equity:
Common stock		621			-			-			621
Capital in excess of par value		80,165			-			-			80,165
Retained earnings		388,518			134,430			(134,430	)		388,518
Accumulated other comprehensive loss		(9,973	)		-			-			(9,973	)
Total shareholders’ equity		459,331			134,430			(134,430	)		459,331
Total liabilities & shareholders’ equity	$	1,060,657		$	448,209		$	(574,151	)	$	934,715

	Parent			Guarantors		Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	51,012		$	314	$	-		$	51,326
Accounts receivable		1,725			3,136		-			4,861
Inventories		15,114			6,060		-			21,174
Income tax receivable		138,524			-		(136,391	)		2,133
Deferred income taxes		(548	)		3,945		-			3,397
Other current assets		14,610			2,289		-			16,899
Total current assets		220,437			15,744		(136,391	)		99,790
Property and equipment, net		587,783			207,063		-			794,846
Investment in subsidiaries		158,266			-		(158,266	)		-
Due from/(to) subsidiaries		78,612			243,665		(322,277	)		-
Other assets		48,780			13,011		-			61,791
Total assets	$	1,093,878		$	479,483	$	(616,934	)	$	956,427
Liabilities & Shareholders’ Equity
Current liabilities:
Accounts payable	$	20,545		$	5,656	$	-		$	26,201
Accrued and other current liabilities		46,450			36,356		-			82,806
Current maturities of long-term debt, including capital leases		(341	)		5,157					4,816
Income tax payable		-			136,391		(136,391	)		-
Total current liabilities		66,654			183,560		(136,391	)		113,823
Long-term debt and capital leases, less current maturities		213,039			40,836		-			253,875
Deferred income taxes		(445	)		3,945		-			3,500
Due to/(from) subsidiaries		243,665			78,612		(322,277	)		-
Other deferred liabilities		109,756			14,264		-			124,020
Total liabilities		632,669			321,217		(458,668	)		495,218
Shareholders’ equity:
Common stock		614			-		-			614
Capital in excess of par value		76,269			-		-			76,269
Retained earnings		395,226			158,266		(158,266	)		395,226
Accumulated other comprehensive loss		(10,900	)		-		-			(10,900	)
Total shareholders’ equity		461,209			158,266		(158,266	)		461,209
Total liabilities & shareholders’ equity	$	1,093,878		$	479,483	$	(616,934		$	956,427

Condensed Income Statement [Table Text Block]

	Parent			Guarantors			Eliminations			Consolidated
Revenue:
Restaurant sales and operating revenue	$	188,572		$	72,634		$	-		$	261,206
Franchise revenue		38			1,415			-			1,453
		188,610			74,049			-			262,659
Operating costs and expenses:
Cost of goods sold		51,718			19,928			-			71,646
Payroll and related costs		66,348			27,616			-			93,964
Other restaurant operating costs		43,496			16,601			-			60,097
Depreciation		9,344			3,194			-			12,538
Selling, general, and administrative		16,548			10,744			-			27,292
Intercompany selling, general, and administrative allocations		10,473			(10,473	)		-			-
Closures and impairments		1,073			2			-			1,075
Equity in earnings of subsidiaries		(4,326	)		-			4,326			-
Interest expense, net		4,736			1,179			-			5,915
Intercompany interest expense/(income)		2,998			(2,998	)		-			-
		202,408			65,793			4,326			272,527
(Loss)/income before income taxes		(13,798	)		8,256			(4,326	)		(9,868	)
(Benefit)/provision for income taxes		(4,525	)		3,930			-			(595	)
Net loss	$	(9,273	)	$	4,326		$	(4,326	)	$	(9,273	)
Other comprehensive loss:
Pension liability reclassification, net of tax		464			-			-			464
Total comprehensive loss	$	(8,809	)	$	4,326		$	(4,326	)	$	(8,809	)

	Parent			Guarantor			Eliminations			Consolidated
Revenue:
Restaurant sales and operating revenue	$	391,123		$	149,540		$	-		$	540,663
Franchise revenue		184			2,994			-			3,178
		391,307			152,534			-			543,841
Operating costs and expenses:
Cost of goods sold		106,248			40,545			-			146,793
Payroll and related costs		134,390			55,416			-			189,806
Other restaurant operating costs		86,908			32,988			-			119,896
Depreciation		18,731			6,465			-			25,196
Selling, general, and administrative		36,769			21,424			-			58,193
Intercompany selling, general, and administrative allocations		21,615			(21,615	)		-			-
Closures and impairments		2,304			253			-			2,557
Equity in earnings of subsidiaries		(12,107	)		-			12,107			-
Interest expense, net		9,247			2,090			-			11,337
Intercompany interest expense/(income)		5,890			(5,890	)		-			-
		409,995			131,676			12,107			553,778
(Loss)/income before income taxes		(18,688	)		20,858			(12,107	)		(9,937	)
(Benefit)/provision for income taxes		(11,980	)		8,751			-			(3,229	)
Net loss	$	(6,708	)	$	12,107		$	(12,107	)	$	(6,708	)
Other comprehensive loss:
Pension liability reclassification, net of tax		927			-			-			927
Total comprehensive loss	$	(5,781	)	$	12,107		$	(12,107	)	$	(5,781	)

	Parent			Guarantors			Eliminations			Consolidated
Revenue:
Restaurant sales and operating revenue	$	198,850		$	75,869		$	-		$	274,719
Franchise revenue		98			1,392			-			1,490
		198,948			77,261			-			276,209
Operating costs and expenses:
Cost of goods sold		56,320			21,349			-			77,669
Payroll and related costs		69,365			28,152			-			97,517
Other restaurant operating costs		46,493			18,796			-			65,289
Depreciation		10,208			3,707			-			13,915
Selling, general, and administrative		25,724			11,307			-			37,031
Intercompany selling, general, and administrative allocations		14,008			(14,008	)		-			-
Closures and impairments		8,058			6,085			-			14,143
Equity in earnings of subsidiaries		104			-			(104	)		-
Interest expense, net		5,171			1,449			-			6,620
Intercompany interest expense/(income)		3,229			(3,229	)		-			-
Loss on extinguishment of debt		672			-			-			672
		239,352			73,608			(104	)		312,856
(Loss)/income from continuing operations before income taxes		(40,404	)		3,653			104			(36,647	)
(Benefit)/provision for income taxes from continuing operations		(5,667	)		3,757			-			(1,910	)
(Loss)/income from continuing operations		(34,737	)		(104	)		104			(34,737	)
Income from discontinued operations, net of tax		354			-			-			354
Net (loss)/income	$	(34,383	)	$	(104	)	$	104		$	(34,383	)
Other comprehensive income:
Pension liability reclassification, net of tax		477			-			-			477
Total comprehensive (loss)/income	$	(33,906	)	$	(104	)	$	104		$	(33,906	)

	Parent			Guarantors			Eliminations			Consolidated
Revenue:
Restaurant sales and operating revenue	$	408,932		$	153,879		$	-		$	562,811
Franchise revenue		119			2,953			-			3,072
		409,051			156,832			-			565,883
Operating costs and expenses:
Cost of goods sold		114,847			42,760			-			157,607
Payroll and related costs		142,891			57,359			-			200,250
Other restaurant operating costs		94,895			37,928			-			132,823
Depreciation		20,572			7,552			-			28,124
Selling, general, and administrative		51,718			22,328			-			74,046
Intercompany selling, general, and administrative allocations		28,771			(28,771	)		-			-
Closures and impairments		13,223			8,953			-			22,176
Equity in earnings of subsidiaries		(4,421	)		-			4,421			-
Interest expense, net		10,231			3,142			-			13,373
Intercompany interest expense/(income)		6,414			(6,414	)		-			-
Loss on extinguishment of debt		1,183			-			-			1,183
		480,324			144,837			4,421			629,582
(Loss)/income from continuing operations before income taxes		(71,273	)		11,995			(4,421	)		(63,699	)
(Benefit)/provision for income taxes from continuing operations		(14,637	)		7,574			-			(7,063	)
(Loss)/income from continuing operations		(56,636	)		4,421			(4,421	)		(56,636	)
Income from discontinued operations, net of tax		11			-			-			11
Net (loss)/income	$	(56,625	)	$	4,421		$	(4,421	)	$	(56,625	)
Other comprehensive income:
Pension liability reclassification, net of tax		955			-			-			955
Total comprehensive (loss)/income	$	(55,670	)	$	4,421		$	(4,421	)	$	(55,670	)

Condensed Cash Flow Statement [Table Text Block]

	Parent			Guarantors			Eliminations			Consolidated
Net cash provided by operating activities	$	25,640		$	43,870		$	(59,553	)	$	9,957
Investing activities:
Purchases of property and equipment		(11,002	)		(2,819	)		-			(13,821	)
Proceeds from disposal of assets		4,607			997			-			5,604
Other, net		1,146			135			-			1,281
Net cash used by investing activities		(5,249	)		(1,687	)		-			(6,936	)
Financing activities:
Principal payments on long-term debt		(16	)		(6,250	)		-			(6,266	)
Stock repurchases		(55	)		-			-			(55	)
Payments for debt issuance costs		(75	)		-			-			(75	)
Proceeds from exercise of stock options		197			-			-			197
Excess tax benefits from share-based compensation		22			-			-			22
Intercompany transactions		(23,610	)		(35,943	)		59,553			-
Net cash used by financing activities		(23,537	)		(42,193	)		59,553			(6,177	)
Decrease in cash and cash equivalents		(3,146	)		(10	)		-			(3,156	)
Cash and cash equivalents:
Beginning of year		51,012			314			-			51,326
End of quarter	$	47,866		$	304		$	-		$	48,170

	Parent			Guarantors			Eliminations			Consolidated
Net cash (used)/provided by operating activities	$	(22,630	)	$	36,648		$	(13,590	)	$	428
Investing activities:
Purchases of property and equipment		(12,902	)		(4,795	)		-			(17,697	)
Proceeds from sale-leaseback transactions, net		5,637			-			-			5,637
Proceeds from disposal of assets		7,434			1,023			-			8,457
Other, net		187			-			-			187
Net cash provided/(used) by investing activities		356			(3,772	)		-			(3,416	)
Financing activities:
Principal payments on long-term debt		(12,968	)		(12,838	)		-			(25,806	)
Stock repurchases		(540	)		-			-			(540	)
Payments for debt issuance costs		(1,718	)		-			-			(1,718	)
Proceeds from exercise of stock options		1,480			-			-			1,480
Excess tax benefits from share-based compensation		283			-			-			283
Intercompany transactions		6,415			(20,005	)		13,590			-
Net cash used by financing activities		(7,048	)		(32,843	)		13,590			(26,301	)
(Decrease)/increase in cash and cash equivalents		(29,322	)		33			-			(29,289	)
Cash and cash equivalents:
Beginning of year		52,635			272			-			52,907
End of quarter	$	23,313		$	305		$	-		$	23,618

XML

Note L - Share-based Employee Compensation (Details) - Summary of Restricted Stock Activity (USD $) In Thousands, except Per Share data, unless otherwise specified	6 Months Ended
	Dec. 02, 2014	Jun. 02, 2014
Restricted Stock, Performance-based [Member]
Note L - Share-based Employee Compensation (Details) - Summary of Restricted Stock Activity [Line Items]
Unvested at June 3, 2014		68
Unvested at June 3, 2014		$ 7.81
Unvested at September 2, 2014	68	68
Unvested at September 2, 2014	$ 7.81	$ 7.81
Restricted Stock, Service-based [Member]
Note L - Share-based Employee Compensation (Details) - Summary of Restricted Stock Activity [Line Items]
Unvested at June 3, 2014		1,008
Unvested at June 3, 2014		$ 8.11
Granted	603
Granted	$ 6.01
Vested	(204)
Vested	$ 7.78
Forfeited	(3)
Forfeited	$ 7.51
Unvested at September 2, 2014	1,404	1,008
Unvested at September 2, 2014	$ 7.26	$ 8.11

XML

Note E - Accounts Receivable (Tables)

6 Months Ended

Dec. 02, 2014

Receivables [Abstract]

Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block]

	December 2, 2014		June 3, 2014
Rebates receivable	$	706	$	930
Amounts due from franchisees		1,725		1,281
Third-party gift card sales		1,555		1,636
Other receivables		1,645		1,014
	$	5,631	$	4,861

XML

Note J - Employee Post-employment Benefits (Details) - Components of Net Periodic Benefit Cost (USD $) In Thousands, unless otherwise specified	3 Months Ended			6 Months Ended
	Dec. 02, 2014	Dec. 03, 2013		Dec. 02, 2014	Dec. 03, 2013
Note J - Employee Post-employment Benefits (Details) - Components of Net Periodic Benefit Cost [Line Items]
Amortization of prior service cost (a)		$ 11			$ 22
Recognized actuarial loss	464	488		927	977
Pension Plan [Member]
Note J - Employee Post-employment Benefits (Details) - Components of Net Periodic Benefit Cost [Line Items]
Service cost	75	89		150	178
Interest cost	444	434		887	868
Expected return on plan assets	(125)	(111)		(249)	(222)
Recognized actuarial loss	430	428		860	856
Net periodic benefit cost	824	840		1,648	1,680
Postretirement Medical and Life Benefit Plans [Member]
Note J - Employee Post-employment Benefits (Details) - Components of Net Periodic Benefit Cost [Line Items]
Service cost	1	3		2	6
Interest cost	11	17		23	34
Amortization of prior service cost (a)		(11)	[1]		(22)	[1]
Recognized actuarial loss	34	61		67	122
Net periodic benefit cost	$ 46	$ 70		$ 92	$ 140

[1] Prior service costs are amortized on a straight-line basis over the average remaining service period of employees expected to receive benefits.

XML

Note G - Property, Equipment, Assets Held for Sale, Operating Leases, and Sale-leaseback Transactions (Details) (USD $)	3 Months Ended		6 Months Ended
	Dec. 02, 2014	Dec. 03, 2013	Dec. 02, 2014	Dec. 03, 2013	Jun. 03, 2014
Note G - Property, Equipment, Assets Held for Sale, Operating Leases, and Sale-leaseback Transactions (Details) [Line Items]
Disposal Group, Including Discontinued Operation, Assets, Current	$ 7,075,000		$ 7,075,000		$ 4,683,000
Property, Plant and Equipment, Disposals	4,500,000	5,600,000	4,500,000	8,200,000
Gain (Loss) on Disposition of Property Plant Equipment	800,000	300,000	1,100,000	200,000
Proceeds from Sale of Property, Plant, and Equipment, Net	5,300,000	5,800,000	5,600,000	8,400,000
Percentage of Restaurants Located on Leased Properties	56.00%		56.00%
Number of Restaurants	683		683
Percentage of Restaurants Located on Leased Land	68.00%		68.00%
Percentage of Restaurants Located on Leased Land and Building	32.00%		32.00%
Expiration of Operating Leases			22 years
Sale Leaseback Transaction, Gross Proceeds, Investing Activities				5,900,000
Sale Leaseback Transaction Costs				300,000
Sale Leaseback Transaction, Net Book Value		4,800,000		4,800,000
Sale Leaseback Transaction Lease Terms 1			15 years
Sale Leaseback Transaction Lease Renewal Terms			20 years
Sale Leaseback Transaction, Deferred Gain, Gross		800,000		800,000
Sale Leaseback Transactions Current Portion of Deferred Gain	1,100,000		1,100,000		1,100,000
Sale Leaseback Transactions Noncurrent Portion of Deferred Gain	12,400,000		12,400,000		13,000,000
Amortization of Deferred Charges	300,000	300,000	500,000	500,000
Construction in Progress [Member]
Note G - Property, Equipment, Assets Held for Sale, Operating Leases, and Sale-leaseback Transactions (Details) [Line Items]
Assets Held for Sale, Property Plant and Equipment, Noncurrent	$ 14,700,000		$ 14,700,000		$ 18,400,000
Company Owned Ruby Tuesday Concept Restaurants [Member]
Note G - Property, Equipment, Assets Held for Sale, Operating Leases, and Sale-leaseback Transactions (Details) [Line Items]
Sale Leaseback Transaction, Number of Restaurants				3

XML

Note C - Franchise Programs (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended	6 Months Ended	3 Months Ended	6 Months Ended
	Dec. 02, 2014	Dec. 02, 2014	Dec. 03, 2013	Dec. 03, 2013
Note C - Franchise Programs (Details) [Line Items]
Support service and marketing and purchasing fees (in Dollars)	$ 0.2	$ 0.7
Ruby Tuesday [Member]
Note C - Franchise Programs (Details) [Line Items]
Number of Franchise Restaurants	81	81
Royalty fee percentage	4.00%
Operating agreements, support service fee, gross sales contribution, maximum	2.00%
Operating agreements, marketing and purchase fee,gross sales contribution, maximum	1.50%
Support service and marketing and purchasing fees (in Dollars)			$ 0.3	$ 0.5
Lime Fresh [Member]
Note C - Franchise Programs (Details) [Line Items]
Number of Franchise Restaurants	8	8
Royalty fee percentage	5.25%
Domestic [Member]
Note C - Franchise Programs (Details) [Line Items]
Operating agreements, national advertising fund gross sales contribution	1.50%
Operating agreements, national advertising fund gross sales contribution, maximum	3.00%

XML

Note J - Employee Post-employment Benefits (Details) - Roll Forward of Accumulated other Comprehensive Loss (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Dec. 02, 2014	Jun. 03, 2014
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance at June 3, 2014		$ (10,900)
Balance at December 2, 2014	(9,973)	(10,900)
Accumulated Defined Benefit Plans Adjustment [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance at June 3, 2014	(10,900)
Pension liability reclassification	927
Balance at December 2, 2014	$ (9,973)

XML

Note P – Supplemental Condensed Consolidating Financial Statements (Details) - Condensed Consolidated Statements of Operations and Comprehensive Loss (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Dec. 02, 2014	Dec. 03, 2013	Dec. 02, 2014	Dec. 03, 2013
Revenue:
Restaurant sales and operating revenue	$ 261,206	$ 274,719	$ 540,663	$ 562,811
Franchise revenue	1,453	1,490	3,178	3,072
Total revenue	262,659	276,209	543,841	565,883
Operating costs and expenses:
Cost of goods sold	71,646	77,669	146,793	157,607
Payroll and related costs	93,964	97,517	189,806	200,250
Other restaurant operating costs	60,097	65,289	119,896	132,823
Depreciation	12,538	13,915	25,196	28,124
Selling, general, and administrative	27,292	37,031	58,193	74,046
Closures and impairments	1,075	14,143	2,557	22,176
Interest expense, net	5,915	6,620	11,337	13,373
Loss on extinguishment of debt		672		1,183
Total costs and expenses	272,527	312,856	553,778	629,582
(Loss)/income from continuing operations before income taxes	(9,868)	(36,647)	(9,937)	(63,699)
(Benefit)/provision for income taxes	(595)	(1,910)	(3,229)	(7,063)
(Loss)/income from continuing operations	(9,273)	(34,737)	(6,708)	(56,636)
Income from discontinued operations, net of tax		354		11
Net (loss)/income	(9,273)	(34,383)	(6,708)	(56,625)
Other comprehensive loss:
Pension liability reclassification, net of tax	464	477	927	955
Total comprehensive (loss)/income	(8,809)	(33,906)	(5,781)	(55,670)
Consolidation, Eliminations [Member]
Operating costs and expenses:
Equity in earnings of subsidiaries	4,326	(104)	12,107	4,421
Total costs and expenses	4,326	(104)	12,107	4,421
(Loss)/income from continuing operations before income taxes	(4,326)	104	(12,107)	(4,421)
(Loss)/income from continuing operations		104		(4,421)
Net (loss)/income	(4,326)	104	(12,107)	(4,421)
Other comprehensive loss:
Total comprehensive (loss)/income	(4,326)	104	(12,107)	(4,421)
Parent Company [Member]
Revenue:
Restaurant sales and operating revenue	188,572	198,850	391,123	408,932
Franchise revenue	38	98	184	119
Total revenue	188,610	198,948	391,307	409,051
Operating costs and expenses:
Cost of goods sold	51,718	56,320	106,248	114,847
Payroll and related costs	66,348	69,365	134,390	142,891
Other restaurant operating costs	43,496	46,493	86,908	94,895
Depreciation	9,344	10,208	18,731	20,572
Selling, general, and administrative	16,548	25,724	36,769	51,718
Intercompany selling, general, and administrative allocations	10,473	14,008	21,615	28,771
Closures and impairments	1,073	8,058	2,304	13,223
Equity in earnings of subsidiaries	(4,326)	104	(12,107)	(4,421)
Interest expense, net	4,736	5,171	9,247	10,231
Intercompany interest expense/(income)	2,998	3,229	5,890	6,414
Loss on extinguishment of debt		672		1,183
Total costs and expenses	202,408	239,352	409,995	480,324
(Loss)/income from continuing operations before income taxes	(13,798)	(40,404)	(18,688)	(71,273)
(Benefit)/provision for income taxes	(4,525)	(5,667)	(11,980)	(14,637)
(Loss)/income from continuing operations		(34,737)		(56,636)
Income from discontinued operations, net of tax		354		11
Net (loss)/income	(9,273)	(34,383)	(6,708)	(56,625)
Other comprehensive loss:
Pension liability reclassification, net of tax	464	477	927	955
Total comprehensive (loss)/income	(8,809)	(33,906)	(5,781)	(55,670)
Guarantor Subsidiaries [Member]
Revenue:
Restaurant sales and operating revenue	72,634	75,869	149,540	153,879
Franchise revenue	1,415	1,392	2,994	2,953
Total revenue	74,049	77,261	152,534	156,832
Operating costs and expenses:
Cost of goods sold	19,928	21,349	40,545	42,760
Payroll and related costs	27,616	28,152	55,416	57,359
Other restaurant operating costs	16,601	18,796	32,988	37,928
Depreciation	3,194	3,707	6,465	7,552
Selling, general, and administrative	10,744	11,307	21,424	22,328
Intercompany selling, general, and administrative allocations	(10,473)	(14,008)	(21,615)	(28,771)
Closures and impairments	2	6,085	253	8,953
Interest expense, net	1,179	1,449	2,090	3,142
Intercompany interest expense/(income)	(2,998)	(3,229)	(5,890)	(6,414)
Total costs and expenses	65,793	73,608	131,676	144,837
(Loss)/income from continuing operations before income taxes	8,256	3,653	20,858	11,995
(Benefit)/provision for income taxes	3,930	3,757	8,751	7,574
(Loss)/income from continuing operations		(104)		4,421
Net (loss)/income	4,326	(104)	12,107	4,421
Other comprehensive loss:
Total comprehensive (loss)/income	$ 4,326	$ (104)	$ 12,107	$ 4,421

XML

Note N - Commitments and Contingencies (Details) (USD $) In Millions, unless otherwise specified	0 Months Ended	6 Months Ended
	Nov. 24, 2014	Dec. 02, 2014
Note N - Commitments and Contingencies (Details) [Line Items]
Litigation Settlement, Amount	$ (1.3)	$ (3.0)
Rent and Other [Member]
Note N - Commitments and Contingencies (Details) [Line Items]
Litigation Settlement, Amount		$ (1.7)

XML

Note I - Closure and Impairments Expense (Details) - Closures and Impairments Expense (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Dec. 02, 2014	Dec. 03, 2013	Dec. 02, 2014	Dec. 03, 2013
Closures and impairments from continuing operations:
Closure and Impairment	$ 1,075	$ 14,143	$ 2,557	$ 22,176
Closed restaurant lease reserves			761
Property [Member] | Continuing Operations [Member]
Closures and impairments from continuing operations:
Closure and Impairment	1,216	12,318	2,272	17,248
Continuing Operations [Member] | Other Closing Expense [Member]
Closures and impairments from continuing operations:
Closure and Impairment	395	110	628	578
Continuing Operations [Member]
Closures and impairments from continuing operations:
Closure and Impairment	1,075	14,143	2,557	22,176
(Gain)/loss on sale of surplus properties	(831)	13	(1,104)	53
Closed restaurant lease reserves	295	1,702	761	4,297
Discontinued Operations [Member]
Closures and impairments from continuing operations:
Closure and Impairment		$ (453)		$ 65

XML

Note D - Discontinued Operations

6 Months Ended

Dec. 02, 2014

Discontinued Operations and Disposal Groups [Abstract]

Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]

NOTE D – DISCONTINUED OPERATIONS

In an effort to focus primarily on the sales turnaround of our core Ruby Tuesday concept and secondly, to improve the financial performance of our Lime Fresh concept, we completed the closure of our Marlin & Ray’s, Wok Hay, and Truffles restaurants during the fourth quarter of fiscal year 2013. We have classified the results of operations of our Company-owned Marlin & Ray’s, Wok Hay, and Truffles concepts as discontinued operations for the 13 and 26 weeks ended December 3, 2013. The results of operations of our discontinued operations are as follows (in thousands):

	Thirteen weeks ended		Twenty-six weeks ended
	December 3, 2013		December 3, 2013
Restaurant sales and operating revenue	$	-	$	-
Gain/(loss) before income taxes	$	453	$	(75	)
Provision/(benefit) for income taxes		99		(86	)
Income from discontinued operations	$	354	$	11

XML

Note O – Fair Value Measurements (Details) - Fair Values of Financial Assets and Liabilities Measured on a Recurring Basis (USD $) In Thousands, unless otherwise specified	Dec. 02, 2014	Jun. 03, 2014
Note O – Fair Value Measurements (Details) - Fair Values of Financial Assets and Liabilities Measured on a Recurring Basis [Line Items]
Deferred compensation plan: RTI common stock – Equity	$ 591	$ 622
Deferred compensation plan: RTI common stock – Equity	(591)	(622)
Fair Value, Inputs, Level 1 [Member] | Deferred Compensation Plan [Member]
Note O – Fair Value Measurements (Details) - Fair Values of Financial Assets and Liabilities Measured on a Recurring Basis [Line Items]
Deferred compensation plan: other investments – Assets	8,732	8,930
Deferred compensation plan: other investments – Liabilities	(8,732)	(8,930)
Fair Value, Inputs, Level 1 [Member]
Note O – Fair Value Measurements (Details) - Fair Values of Financial Assets and Liabilities Measured on a Recurring Basis [Line Items]
Deferred compensation plan: RTI common stock – Equity	591	622
Deferred compensation plan: RTI common stock – Equity	$ (591)	$ (622)

XML

Note G - Property, Equipment, Assets Held for Sale, Operating Leases, and Sale-leaseback Transactions (Details) - Property and Equipment, Net (USD $) In Thousands, unless otherwise specified	Dec. 02, 2014		Jun. 03, 2014
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment	$ 1,357,694		$ 1,366,838
Less accumulated depreciation	585,868		571,992
	771,826		794,846
Land [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment	212,282		214,277
Building [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment	426,800		430,988
Building Improvements [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment	364,520		365,599
Restaurant Equipment [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment	249,436		248,852
Other Equipment [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment	86,658		84,876
Construction in Progress and Other [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment	$ 17,998	[1]	$ 22,246	[1]

[1] Included in Construction in progress and other as of December 2, 2014 and June 3, 2014 are $14.7 million and $18.4 million, respectively, of assets held for sale that are not classified as such in the Condensed Consolidated Balance Sheets as we do not expect to sell these assets within the next 12 months. These assets primarily consist of parcels of land upon which we have no intention to build restaurants and closed properties which include a building.

XML

Note J - Employee Post-employment Benefits (Tables)

6 Months Ended

Dec. 02, 2014

Compensation and Retirement Disclosure [Abstract]

Schedule of Net Benefit Costs [Table Text Block]

	Pension Benefits
	Thirteen weeks ended						Twenty-six weeks ended
	December 2,			December 3,			December 2,			December 3,
	2014			2013			2014			2013
Service cost	$	75		$	89		$	150		$	178
Interest cost		444			434			887			868
Expected return on plan assets		(125	)		(111	)		(249	)		(222	)
Recognized actuarial loss		430			428			860			856
Net periodic benefit cost	$	824		$	840		$	1,648		$	1,680

	Postretirement Medical and Life Benefits
	Thirteen weeks ended					Twenty-six weeks ended
	December 2,		December 3,			December 2,		December 3,
	2014		2013			2014		2013
Service cost	$	1	$	3		$	2	$	6
Interest cost		11		17			23		34
Amortization of prior service cost (a)		-		(11	)		-		(22	)
Recognized actuarial loss		34		61			67		122
Net periodic benefit cost	$	46	$	70		$	92	$	140

Schedule of Amounts Recognized in Other Comprehensive Income (Loss) [Table Text Block]

	Thirteen weeks ended					Twenty-six weeks ended
	December 2, 2014		December 3, 2013			December 2, 2014		December 3, 2013
Recognized actuarial loss	$	464	$	488		$	927	$	977
Amortization of prior service cost		-		(11	)		-		(22	)
Pension liability reclassification	$	464	$	477		$	927	$	955

Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block]

	Accumulated Other Comprehensive Loss
Balance at June 3, 2014	$	(10,900	)
Pension liability reclassification		927
Balance at December 2, 2014	$	(9,973	)

Schedule of Restructuring Reserve by Type of Cost [Table Text Block]

Balance at June 3, 2014	$	1,055
Employee severance and unused vacation accruals		934
Cash payments		(1,651	)
Balance at December 2, 2014	$	338

XML

Note I - Closure and Impairments Expense (Tables)

6 Months Ended

Dec. 02, 2014

Disclosure Text Block Supplement [Abstract]

Closures and Impairment Expenses [Table Text Block]

	Thirteen weeks ended						Twenty-six weeks ended
	December 2, 2014			December 3, 2013			December 2, 2014			December 3, 2013
Closures and impairments from continuing operations:
Property impairments	$	1,216		$	12,318		$	2,272		$	17,248
Closed restaurant lease reserves		295			1,702			761			4,297
Other closing costs		395			110			628			578
(Gain)/loss on sale of surplus properties		(831	)		13			(1,104	)		53
Closures and impairments, net	$	1,075		$	14,143		$	2,557		$	22,176
Closures and impairments from discontinued operations				$	(453	)				$	65

Future Lease Obligations Associated with Closed Properties [Table Text Block]

	Reserve for Lease Obligations
Balance at June 3, 2014	$	10,873
Closing expense including rent and other lease charges		761
Payments		(2,309	)
Other		(340	)
Balance at December 2, 2014	$	8,985

XML

Note L - Share-based Employee Compensation (Details) - Summary of Stock Option Activity (USD $) In Thousands, except Share data, unless otherwise specified	6 Months Ended
	Dec. 02, 2014	Jun. 02, 2014	Jun. 02, 2013
Stock Options, Service-based [Member]
Note L - Share-based Employee Compensation (Details) - Summary of Stock Option Activity [Line Items]
Stock Options		1,953,000
Weighted Average Exercise Price		$ 8.66
Granted	855,000
Granted	$ 5.92
Exercised	(37,000)
Exercised	$ 6.18
Stock Options	(136,000)
Weighted Average Exercise Price	$ 9.35
Stock Options	2,635,000	1,953,000
Weighted Average Exercise Price	$ 7.77	$ 8.66
Weighted Average Remaining Contractual Term	4 years 255 days
Aggregate Intrinsic Value	$ 1,967
Stock Options	1,414,000
Weighted Average Exercise Price	$ 8.52
Weighted Average Remaining Contractual Term (years)	3 years 138 days
Aggregate Intrinsic Value	273
Stock Options, Performanced-based [Member]
Note L - Share-based Employee Compensation (Details) - Summary of Stock Option Activity [Line Items]
Stock Options			735,000
Weighted Average Exercise Price			$ 8.82
Stock Options	(160,000)
Weighted Average Exercise Price	$ 9.34
Stock Options	575,000		735,000
Weighted Average Exercise Price	$ 8.67		$ 8.82
Weighted Average Remaining Contractual Term	5 years 135 days
Aggregate Intrinsic Value	$ 50

XML

Note H - Long-term Debt and Capital Leases (Details) (USD $)	6 Months Ended		3 Months Ended
	Dec. 02, 2014	Dec. 03, 2013	Dec. 02, 2014	Jun. 03, 2014	May 14, 2012
Note H - Long-term Debt and Capital Leases (Details) [Line Items]
Secured Debt	$ 39,002,000		$ 39,002,000	$ 45,252,000
Repayments of Long-term Debt	6,266,000	25,806,000
Replaced Credit Facility ]Member] | Revolving Credit Facility [Member]
Note H - Long-term Debt and Capital Leases (Details) [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity		200,000,000
Senior Notes [Member]
Note H - Long-term Debt and Capital Leases (Details) [Line Items]
Debt Instrument, Face Amount					250,000,000
Debt Instrument, Interest Rate, Stated Percentage					7.625%
Debt Instrument, Unamortized Discount	2,336,000		2,336,000	2,503,000	3,700,000
Debt Instrument, Maturity Date	May 15, 2020
Redemption Price Percentage on Principal Amount	100.00%		100.00%
Percentage of Senior Notes Redeemed from Equity Offering	35.00%		35.00%
Debt Instrument Repurchased Amount Authorized	20,000,000		20,000,000
Long-term Debt, Gross	215,000,000		215,000,000	215,000,000
Mortgages [Member] | Maximum [Member]
Note H - Long-term Debt and Capital Leases (Details) [Line Items]
Range of Loan Balances	7,500,000		7,500,000
Mortgages [Member]
Note H - Long-term Debt and Capital Leases (Details) [Line Items]
Secured Debt	39,000,000		39,000,000
Debt Instrument, Interest Rate, Effective Percentage Rate Range, Minimum	7.60%
Debt Instrument, Interest Rate, Effective Percentage Rate Range, Maximum	10.92%
Repayments of Long-term Debt			3,900,000
Payments of Debt Extinguishment Costs			400,000
Revolving Credit Facility [Member] | Federal Funds Rate [Member]
Note H - Long-term Debt and Capital Leases (Details) [Line Items]
Debt Instrument, Basis Spread on Variable Rate	0.50%
Revolving Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member]
Note H - Long-term Debt and Capital Leases (Details) [Line Items]
Debt Instrument, Basis Spread on Variable Rate	1.00%
Revolving Credit Facility [Member] | Eurodollar [Member] | Minimum [Member]
Note H - Long-term Debt and Capital Leases (Details) [Line Items]
Debt Instrument, Basis Spread on Variable Rate	2.50%
Revolving Credit Facility [Member] | Eurodollar [Member] | Maximum [Member]
Note H - Long-term Debt and Capital Leases (Details) [Line Items]
Debt Instrument, Basis Spread on Variable Rate	3.50%
Revolving Credit Facility [Member] | Base Rate [Member] | Minimum [Member]
Note H - Long-term Debt and Capital Leases (Details) [Line Items]
Debt Instrument, Basis Spread on Variable Rate	1.50%
Revolving Credit Facility [Member] | Base Rate [Member] | Maximum [Member]
Note H - Long-term Debt and Capital Leases (Details) [Line Items]
Debt Instrument, Basis Spread on Variable Rate	2.50%
Revolving Credit Facility [Member] | Minimum [Member]
Note H - Long-term Debt and Capital Leases (Details) [Line Items]
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage	0.40%
Revolving Credit Facility [Member] | Maximum [Member]
Note H - Long-term Debt and Capital Leases (Details) [Line Items]
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage	0.75%
Revolving Credit Facility [Member]
Note H - Long-term Debt and Capital Leases (Details) [Line Items]
Debt Instrument, Term	4 years
Line of Credit Facility, Current Borrowing Capacity		50,000,000
Option to Increase Revolving Credit Facility Capacity		35,000,000
Debt Instrument, Collateral Amount, Appraised Value		101,400,000
Debt Instrument, Collateral Amount	80,000,000		80,000,000
Long-term Line of Credit	0		0
Line of Credit Facility, Remaining Borrowing Capacity	37,500,000		37,500,000
Line of Credit Facility Maximum Leverage Ratio Thereafter			4.85
Line of Credit Facility, Minimum Fixed Charge Coverage Ratio Thereafter			1.35
Sublimit for Standby Letters of Credit [Member]
Note H - Long-term Debt and Capital Leases (Details) [Line Items]
Line of Credit Facility, Current Borrowing Capacity		$ 25,000,000

XML

Note L - Share-based Employee Compensation (Tables)

6 Months Ended

Dec. 02, 2014

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

Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]

	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		-		$	-		-	$	-

Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity [Table Text Block]

			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

XML

Note M - Segment Reporting (Tables)

6 Months Ended

3 Months Ended

Dec. 02, 2014

Sep. 02, 2014

Note M - Segment Reporting (Tables) [Line Items]

Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Table Text Block]

	Thirteen weeks ended						Twenty-six weeks ended
	December 2, 2014			December 3, 2013			December 2, 2014			December 3, 2013
Segment profit/(loss)	$	19,200		$	(913	)	$	49,365		$	6,484
Less:
Depreciation and amortization		(13,120	)		(14,598	)		(26,358	)		(29,472	)
Unallocated general and administrative expenses		(9,823	)		(13,760	)		(20,785	)		(25,657	)
Preopening expenses		(162	)		(41	)		(203	)		(395	)
Interest expense, net		(5,915	)		(6,620	)		(11,337	)		(13,373	)
Other expense, net		(48	)		(715	)		(619	)		(1,286	)
Loss from continuing operations before income taxes	$	(9,868	)	$	(36,647	)	$	(9,937	)	$	(63,699	)

Income Statement [Member]

Note M - Segment Reporting (Tables) [Line Items]

Schedule of Segment Reporting Information, by Segment [Table Text Block]

	Thirteen weeks ended						Twenty-six weeks ended
	December 2, 2014			December 3, 2013			December 2, 2014			December 3, 2013
Revenues:
Ruby Tuesday concept	$	257,814		$	270,741		$	533,857		$	554,763
Lime Fresh concept		4,845			5,468			9,984			11,120
Total revenues	$	262,659		$	276,209		$	543,841		$	565,883
Segment profit/(loss):
Ruby Tuesday concept	$	20,504		$	870		$	50,845		$	10,721
Lime Fresh concept		(1,304	)		(1,783	)		(1,480	)		(4,237	)
Total segment profit/(loss)	$	19,200		$	(913	)	$	49,365		$	6,484
Depreciation and amortization:
Ruby Tuesday concept	$	12,153		$	13,456		$	24,416		$	27,248
Lime Fresh concept		437			545			860			1,044
Support center and other		530			597			1,082			1,180
Total depreciation and amortization	$	13,120		$	14,598		$	26,358		$	29,472
Capital expenditures:
Ruby Tuesday concept							$	12,963		$	14,114
Lime Fresh concept								87			2,699
Support center and other								771			884
Total capital expenditures							$	13,821		$	17,697

Balance Sheet [Member]

Note M - Segment Reporting (Tables) [Line Items]

Schedule of Segment Reporting Information, by Segment [Table Text Block]

	December 2, 2014		June 3, 2014
Total assets:
Ruby Tuesday concept	$	812,660	$	824,293
Lime Fresh concept		13,224		15,203
Support center and other		108,831		116,931
Total assets	$	934,715	$	956,427

XML

Note C - Franchise Programs

6 Months Ended

Dec. 02, 2014

Franchise Programs [Abstract]

Franchise Programs [Text Block]

NOTE C – FRANCHISE PROGRAMS

As of December 2, 2014, our domestic and international franchisees collectively operated 81 Ruby Tuesday restaurants and eight Lime Fresh restaurants. We do not own any equity interest in our franchisees.

Under the terms of the franchise operating agreements, we charge a royalty fee (generally 4.0% of monthly gross sales for our Ruby Tuesday concept franchisees and 5.25% of monthly gross sales for our Lime Fresh concept franchisees) and require all domestic franchisees to contribute a percentage, 1.5% as of December 2, 2014, of monthly gross sales to a national advertising fund formed to cover their pro rata portion of the production and airing costs associated with our national advertising campaign. Under the terms of those agreements, we can charge up to 3.0% of monthly gross sales for this national advertising fund.

Advertising amounts received from domestic franchisees are considered by RTI to be reimbursements, recorded on an accrual basis as earned, and have been netted against Selling, general and administrative, net in the Condensed Consolidated Statements of Operations and Comprehensive Loss.

In addition to the advertising fee discussed above, our Ruby Tuesday concept franchise agreements allow us to charge up to a 2.0% support service fee and a 1.5% marketing and purchasing fee. For the 13 and 26 weeks ended December 2, 2014, we recorded $0.2 million and $0.7 million, respectively, and for the 13 and 26 weeks ended December 3, 2013, we recorded $0.3 million and $0.5 million, respectively, in support service and marketing and purchasing fees, which were an offset to Selling, general and administrative, net in our Condensed Consolidated Statements of Operations and Comprehensive Loss.

XML

Note O – Fair Value Measurements (Tables)

6 Months Ended

Dec. 02, 2014

Fair Value Disclosures [Abstract]

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]

	Level		December 2, 2014			June 3, 2014
Deferred compensation plan: other investments – Assets		1	$	8,732		$	8,930
Deferred compensation plan: other investments – Liabilities		1		(8,732	)		(8,930	)
Deferred compensation plan: RTI common stock – Equity		1		591			622
Deferred compensation plan: RTI common stock – Equity		1		(591	)		(622	)
Total			$	-		$	-

Fair Value Measurements, Nonrecurring [Table Text Block]

	Fair Value Measurements
	Level		December 2, 2014
Long-lived assets held for sale		2	$	1,770
Long-lived assets held for use		2		67
Total			$	1,837

Schedule of Gains and Losses Recognized from Fair Value Measurements on Non-recurring Basis [Table Text Block]

	Thirteen weeks ended				Twenty-six weeks ended
	December 2, 2014		December 3, 2013		December 2, 2014		December 3, 2013
Included within continuing operations
Long-lived assets held for sale	$	203	$	315	$	802	$	584
Long-lived assets held for use		1,013		12,003		1,470		16,664
	$	1,216	$	12,318	$	2,272	$	17,248
Included within discontinued operations			$	-			$	153

Fair Value, by Balance Sheet Grouping [Table Text Block]

	December 2, 2014				June 3, 2014
	Carrying Value		Fair Value (Level 2)		Carrying Value		Fair Value (Level 2)
Long-term debt	$	252,236	$	257,278	$	258,490	$	262,985

XML

Note E - Accounts Receivable (Details) - Accounts Receivable, Current (USD $) In Thousands, unless otherwise specified	Dec. 02, 2014	Jun. 03, 2014
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts receivable, net	$ 5,631	$ 4,861
Amounts due from franchisees	1,725	1,281
Third-party gift card sales	1,555	1,636
Other receivables	1,645	1,014
Rebates [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts receivable, net	$ 706	$ 930

XML

Note J - Employee Post-employment Benefits (Details) - Roll Forward of Employee Separation Obligations (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Dec. 02, 2014
Note J - Employee Post-employment Benefits (Details) - Roll Forward of Employee Separation Obligations [Line Items]
Employee severance and unused vacation accruals	$ 934
Cash payments	(1,651)
Employee Severance [Member]
Note J - Employee Post-employment Benefits (Details) - Roll Forward of Employee Separation Obligations [Line Items]
Balance at June 3, 2014	1,055
Employee severance and unused vacation accruals	300
Balance at December 2, 2014	$ 338

XML

Condensed Consolidated Balance Sheets (Unaudited) (USD $) In Thousands, unless otherwise specified	Dec. 02, 2014	Jun. 03, 2014
Current assets:
Cash and cash equivalents	$ 48,170	$ 51,326
Accounts receivable	5,631	4,861
Inventories:
Merchandise	18,893	12,924
China, silver and supplies	7,827	8,250
Income tax receivable	3,174	2,133
Deferred income taxes	0	3,397
Prepaid rent and other expenses	12,659	12,216
Assets held for sale	7,075	4,683
Total current assets	103,429	99,790
Property and equipment, net	771,826	794,846
Other assets	59,460	61,791
Total assets	934,715	956,427
Current liabilities:
Accounts payable	26,965	26,201
Accrued liabilities:
Taxes, other than income and payroll	10,597	11,221
Payroll and related costs	21,586	22,637
Insurance	6,324	5,962
Deferred revenue – gift cards	16,067	16,584
Rent and other	22,897	26,402
Current portion of long-term debt, including capital leases	4,506	4,816
Deferred income taxes	58	0
Total current liabilities	109,000	113,823
Long-term debt and capital leases, less current maturities	247,915	253,875
Deferred income taxes	2,224	3,500
Deferred escalating minimum rent	49,742	48,827
Other deferred liabilities	66,503	75,193
Total liabilities	475,384	495,218
Commitments and contingencies (Note N)
Shareholders’ equity:
Common stock, $0.01 par value; (authorized: 100,000 shares; issued and outstanding: 62,072 shares at 12/02/14; 61,442 shares at 6/03/14)	621	614
Capital in excess of par value	80,165	76,269
Retained earnings	388,518	395,226
Deferred compensation liability payable in Company stock	591	622
Company stock held by Deferred Compensation Plan	(591)	(622)
Accumulated other comprehensive loss	(9,973)	(10,900)
Total shareholders’ equity	459,331	461,209
Total liabilities & shareholders’ equity	$ 934,715	$ 956,427

XML

Note H - Long-term Debt and Capital Leases (Details) - Long-Term Debt and Capital Lease Obligations (USD $) In Thousands, unless otherwise specified	Dec. 02, 2014	Jun. 03, 2014	May 14, 2012
Debt Instrument [Line Items]
Senior unsecured notes less unamortized discount	$ 252,236	$ 258,490
Mortgage loan obligations	39,002	45,252
Unamortized premium on mortgage loan obligations	570	741
Capital lease obligations	185	201
	252,421	258,691
Less current maturities	4,506	4,816
	247,915	253,875
Senior Notes [Member]
Debt Instrument [Line Items]
Senior unsecured notes	215,000	215,000
Unamortized discount	(2,336)	(2,503)	(3,700)
Senior unsecured notes less unamortized discount	$ 212,664	$ 212,497

XML

Note A - Basis of Presentation

6 Months Ended

Dec. 02, 2014

Disclosure Text Block [Abstract]

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

NOTE A – BASIS OF PRESENTATION

Ruby Tuesday, Inc., including its wholly-owned subsidiaries (“RTI,” the “Company,” “we,” and/or “our”), owns and operates Ruby Tuesday® casual dining and Lime Fresh Mexican Grill® (“Lime Fresh”) fast casual restaurants. We also franchise the Ruby Tuesday and Lime Fresh concepts in selected domestic and international markets. The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles (“GAAP”) for complete financial statements. In the opinion of management, all adjustments (consisting only of normal recurring entries) considered necessary for a fair presentation have been included. The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Operating results for the 13- and 26-week periods ended December 2, 2014 are not necessarily indicative of results that may be expected for the 52-week year ending June 2, 2015.

The Condensed Consolidated Balance Sheet at June 3, 2014 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by GAAP.

For further information, refer to the consolidated financial statements and footnotes thereto included in RTI’s Annual Report on Form 10-K for the fiscal year ended June 3, 2014.

XML

Note M - Segment Reporting (Details) - Financial Results by Reportable Segment (USD $) In Thousands, unless otherwise specified	Dec. 02, 2014	Jun. 03, 2014
Total assets:
Total assets	$ 934,715	$ 956,427
Ruby Tuesday [Member]
Total assets:
Total assets	812,660	824,293
Lime Fresh [Member]
Total assets:
Total assets	13,224	15,203
Support Center and Other [Member]
Total assets:
Total assets	$ 108,831	$ 116,931

XML

Note B - Loss Per Share and Stock Repurchases (Details) - Weighted-Average Common and Dilutive Potential Common Shares Outstanding (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Dec. 02, 2014	Dec. 03, 2013	Dec. 02, 2014	Dec. 03, 2013
Weighted-Average Common and Dilutive Potential Common Shares Outstanding [Abstract]
Loss from continuing operations (in Dollars)	$ (9,273)	$ (34,737)	$ (6,708)	$ (56,636)
Income from discontinued operations, net of tax (in Dollars)		354		11
Net loss (in Dollars)	$ (9,273)	$ (34,383)	$ (6,708)	$ (56,625)
Weighted-average common shares outstanding (in Shares)	60,534	60,196	60,476	60,111
Weighted average common and dilutive potential common shares outstanding (in Shares)	60,534	60,196	60,476	60,111
Loss per share – Basic
Loss from continuing operations	$ (0.15)	$ (0.58)	$ (0.11)	$ (0.94)
Income from discontinued operations		$ 0.01
Net loss per share	$ (0.15)	$ (0.57)	$ (0.11)	$ (0.94)
Loss per share – Diluted
Loss from continuing operations	$ (0.15)	$ (0.58)	$ (0.11)	$ (0.94)
Income from discontinued operations		$ 0.01
Net loss per share	$ (0.15)	$ (0.57)	$ (0.11)	$ (0.94)

XML

Note O – Fair Value Measurements (Details) - Carrying Amounts and Fair Values of Other Financial Instruments Not Measured on a Recurring Basis (USD $) In Thousands, unless otherwise specified	Dec. 02, 2014	Jun. 03, 2014
Carrying Amounts and Fair Values of Other Financial Instruments Not Measured on a Recurring Basis [Abstract]
Long-term debt	$ 252,236	$ 258,490
Long-term debt	$ 257,278	$ 262,985

XML

Note Q – Recently Issued Accounting Pronouncements

6 Months Ended

Dec. 02, 2014

Disclosure Text Block [Abstract]

Description of New Accounting Pronouncements Not yet Adopted [Text Block]

NOTE Q – RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

Accounting Pronouncements Adopted During Fiscal Year 2015

As discussed further in Note K to the Condensed Consolidated Financial Statements, we adopted ASU 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists during the first quarter of fiscal year 2015.

Accounting Pronouncements Not Yet Adopted

In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements – Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASU 2014-15”). The guidance requires an entity to evaluate whether there are conditions or events, in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued (or within one year after the financial statements are available to be issued when applicable) and to provide related footnote disclosures in certain circumstances. The guidance is effective for the annual period ending after December 15, 2016, and for annual and interim periods thereafter (our fiscal year 2017). Early application is permitted. We do not believe the adoption of this guidance will have a significant impact on our Condensed Consolidated Financial Statements.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”). ASU 2014-09 is a jointly converged standard between the FASB and the International Accounting Standards Board, and will replace almost all existing revenue recognition guidance, including industry specific guidance, upon its effective date. The standard’s core principle is for companies to recognize revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration to which the company expects to be entitled in exchange for those goods and services. ASU 2014-09 also enhances disclosures about revenue, provides guidance for transactions that were not addressed comprehensively in previous guidance, and improves guidance for multiple-element arrangements. The standard permits the use of either the retrospective or cumulative effect transition method. The guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016 (the first quarter of our fiscal year 2018). We have not yet selected a transition method and are currently evaluating the impact of this guidance on our Condensed Consolidated Financial Statements.

XML

Note B - Loss Per Share and Stock Repurchases (Details) - Antidilutive Shares Excluded from Computation of Diluted Earnings/(Loss) Per Share In Thousands, unless otherwise specified	3 Months Ended				6 Months Ended
	Dec. 02, 2014		Dec. 03, 2013		Dec. 02, 2014		Dec. 03, 2013
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities	4,769		3,913		4,421		4,137
Equity Option [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities	3,301	[1]	2,839	[1]	3,102	[1]	2,977	[1]
Restricted Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities	1,468	[1]	1,074	[1]	1,319	[1]	1,160	[1]

[1] Due to a net loss from continuing operations for the 13 and 26 weeks ended December 2, 2014 and December 3, 2013, all outstanding share-based awards were excluded from the computation of diluted loss per share.

XML

Note D - Discontinued Operations (Tables)

6 Months Ended

Dec. 02, 2014

Discontinued Operations and Disposal Groups [Abstract]

Schedule of Disposal Groups, Including Discontinued Operations, Income Statement, Balance Sheet and Additional Disclosures [Table Text Block]

	Thirteen weeks ended		Twenty-six weeks ended
	December 3, 2013		December 3, 2013
Restaurant sales and operating revenue	$	-	$	-
Gain/(loss) before income taxes	$	453	$	(75	)
Provision/(benefit) for income taxes		99		(86	)
Income from discontinued operations	$	354	$	11

XML

Note P – Supplemental Condensed Consolidating Financial Statements (Details) - Condensed Consolidating Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Dec. 02, 2014	Dec. 03, 2013
Condensed Cash Flow Statements, Captions [Line Items]
Net cash provided by operating activities	$ 9,957	$ 428
Investing activities:
Purchases of property and equipment	(13,821)	(17,697)
Proceeds from sale-leaseback transactions, net		5,637
Proceeds from disposal of assets	5,604	8,457
Other, net	1,281	187
Net cash used by investing activities	(6,936)	(3,416)
Financing activities:
Principal payments on long-term debt	(6,266)	(25,806)
Stock repurchases	(55)	(540)
Payments for debt issuance costs	(75)	(1,718)
Proceeds from exercise of stock options	197	1,480
Excess tax benefits from share-based compensation	22	283
Net cash used by financing activities	(6,177)	(26,301)
Increase (Decrease) in cash and cash equivalents	(3,156)	(29,289)
Cash and cash equivalents:
Beginning of year	51,326	52,907
End of quarter	48,170	23,618
Consolidation, Eliminations [Member]
Condensed Cash Flow Statements, Captions [Line Items]
Net cash provided by operating activities	(59,553)	(13,590)
Financing activities:
Intercompany transactions	59,553	13,590
Net cash used by financing activities	59,553	13,590
Cash and cash equivalents:
End of quarter	0
Parent Company [Member]
Condensed Cash Flow Statements, Captions [Line Items]
Net cash provided by operating activities	25,640	(22,630)
Investing activities:
Purchases of property and equipment	(11,002)	(12,902)
Proceeds from sale-leaseback transactions, net		5,637
Proceeds from disposal of assets	4,607	7,434
Other, net	1,146	187
Net cash used by investing activities	(5,249)	356
Financing activities:
Principal payments on long-term debt	(16)	(12,968)
Stock repurchases	(55)	(540)
Payments for debt issuance costs	(75)	(1,718)
Proceeds from exercise of stock options	197	1,480
Excess tax benefits from share-based compensation	22	283
Intercompany transactions	(23,610)	6,415
Net cash used by financing activities	(23,537)	(7,048)
Increase (Decrease) in cash and cash equivalents	(3,146)	(29,322)
Cash and cash equivalents:
Beginning of year	51,012	52,635
End of quarter	47,866	23,313
Guarantor Subsidiaries [Member]
Condensed Cash Flow Statements, Captions [Line Items]
Net cash provided by operating activities	43,870	36,648
Investing activities:
Purchases of property and equipment	(2,819)	(4,795)
Proceeds from disposal of assets	997	1,023
Other, net	135
Net cash used by investing activities	(1,687)	(3,772)
Financing activities:
Principal payments on long-term debt	(6,250)	(12,838)
Intercompany transactions	(35,943)	(20,005)
Net cash used by financing activities	(42,193)	(32,843)
Increase (Decrease) in cash and cash equivalents	(10)	33
Cash and cash equivalents:
Beginning of year	314	272
End of quarter	$ 304	$ 305

XML

Note B - Loss Per Share and Stock Repurchases

6 Months Ended

Dec. 02, 2014

Earnings Per Share [Abstract]

Earnings Per Share [Text Block]

NOTE B – LOSS PER SHARE AND STOCK REPURCHASES

Basic loss per share is computed by dividing net loss by the weighted average number of common shares outstanding during each period presented. Diluted loss per share gives effect to stock options and restricted stock outstanding during the applicable periods, if dilutive. The following table reflects the calculation of weighted-average common and dilutive potential common shares outstanding as presented in the accompanying Condensed Consolidated Statements of Operations and Comprehensive Loss (in thousands, except per share data):

	Thirteen weeks ended						Twenty-six weeks ended
	December 2, 2014			December 3, 2013			December 2, 2014			December 3, 2013
Loss from continuing operations	$	(9,273	)	$	(34,737	)	$	(6,708	)	$	(56,636	)
Income from discontinued operations, net of tax		-			354			-			11
Net loss	$	(9,273	)	$	(34,383	)	$	(6,708	)	$	(56,625	)
Weighted-average common shares outstanding		60,534			60,196			60,476			60,111
Dilutive effect of stock options and restricted stock		-			-			-			-
Weighted average common and dilutive potential common shares outstanding		60,534			60,196			60,476			60,111
Loss per share – Basic
Loss from continuing operations	$	(0.15	)	$	(0.58	)	$	(0.11	)	$	(0.94	)
Income from discontinued operations		-			0.01			-			-
Net loss per share	$	(0.15	)	$	(0.57	)	$	(0.11	)	$	(0.94	)
Loss per share – Diluted
Loss from continuing operations	$	(0.15	)	$	(0.58	)	$	(0.11	)	$	(0.94	)
Income from discontinued operations		-			0.01			-			-
Net loss per share	$	(0.15	)	$	(0.57	)	$	(0.11	)	$	(0.94	)

Stock options with an exercise price greater than the average market price of our common stock and certain options and restricted shares with unrecognized compensation expense do not impact the computation of diluted loss per share because the effect would be anti-dilutive. The following table summarizes stock options and restricted shares that did not impact the computation of diluted loss per share because their inclusion would have had an anti-dilutive effect (in thousands):

	Thirteen weeks ended						Twenty-six weeks ended
	December 2, 2014			December 3, 2013			December 2, 2014			December 3, 2013
Stock options		3,301	*		2,839	*		3,102	*		2,977	*
Restricted shares		1,468	*		1,074	*		1,319	*		1,160	*
Total		4,769			3,913			4,421			4,137

*Due to a net loss from continuing operations for the 13 and 26 weeks ended December 2, 2014 and December 3, 2013, all outstanding share-based awards were excluded from the computation of diluted loss per share.

During the first two quarters of fiscal year 2015, we repurchased an insignificant number of shares of our common stock at a cost of $0.1 million. As of December 2, 2014, the total number of remaining shares authorized by our Board of Directors to be repurchased was 11.8 million. All shares repurchased during the first two quarters were cancelled as of December 2, 2014.

XML

Condensed Consolidated Balance Sheets (Unaudited) (Parentheticals) (USD $) In Thousands, except Per Share data, unless otherwise specified	Dec. 02, 2014	Jun. 03, 2014
Common stock, par value (in Dollars per share)	$ 0.01	$ 0.01
Common stock, authorized	100,000	100,000
Common stock, issued	62,072	61,442
Common stock, outstanding	62,072	61,442

XML

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.

XML

Document And Entity Information	6 Months Ended
	Dec. 02, 2014	Jan. 05, 2015
Document and Entity Information [Abstract]
Entity Registrant Name	RUBY TUESDAY INC
Document Type	10-Q
Current Fiscal Year End Date	--06-02
Entity Common Stock, Shares Outstanding		62,037,516
Amendment Flag	false
Entity Central Index Key	0000068270
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Accelerated Filer
Entity Well-known Seasoned Issuer	No
Document Period End Date	Dec. 02, 2014
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q2

XML

Note M - Segment Reporting

6 Months Ended

Dec. 02, 2014

Segment Reporting [Abstract]

Segment Reporting Disclosure [Text Block]

NOTE M – SEGMENT REPORTING

Our President and Chief Executive Officer, who is our chief operating decision maker, with the assistance of our senior management, reviews discrete financial information for both the Ruby Tuesday and Lime Fresh restaurant concepts to assess performance and allocate resources. We consider the Ruby Tuesday and Lime Fresh concepts to be our reportable segments as we do not believe they have similar economic and other characteristics to be aggregated into a single reportable segment. Financial results by reportable segment for the 13 and 26 weeks ended December 2, 2014 and December 3, 2013 are as follows (in thousands):

	Thirteen weeks ended						Twenty-six weeks ended
	December 2, 2014			December 3, 2013			December 2, 2014			December 3, 2013
Revenues:
Ruby Tuesday concept	$	257,814		$	270,741		$	533,857		$	554,763
Lime Fresh concept		4,845			5,468			9,984			11,120
Total revenues	$	262,659		$	276,209		$	543,841		$	565,883
Segment profit/(loss):
Ruby Tuesday concept	$	20,504		$	870		$	50,845		$	10,721
Lime Fresh concept		(1,304	)		(1,783	)		(1,480	)		(4,237	)
Total segment profit/(loss)	$	19,200		$	(913	)	$	49,365		$	6,484
Depreciation and amortization:
Ruby Tuesday concept	$	12,153		$	13,456		$	24,416		$	27,248
Lime Fresh concept		437			545			860			1,044
Support center and other		530			597			1,082			1,180
Total depreciation and amortization	$	13,120		$	14,598		$	26,358		$	29,472
Capital expenditures:
Ruby Tuesday concept							$	12,963		$	14,114
Lime Fresh concept								87			2,699
Support center and other								771			884
Total capital expenditures							$	13,821		$	17,697

Total assets by reportable segment as of December 2, 2014 and June 3, 2014 are as follows (in thousands):

	December 2, 2014		June 3, 2014
Total assets:
Ruby Tuesday concept	$	812,660	$	824,293
Lime Fresh concept		13,224		15,203
Support center and other		108,831		116,931
Total assets	$	934,715	$	956,427

The following is a reconciliation of segment profit/(loss) to loss from continuing operations before taxes for the 13 and 26 weeks ended December 2, 2014 and December 3, 2013 (in thousands):

	Thirteen weeks ended						Twenty-six weeks ended
	December 2, 2014			December 3, 2013			December 2, 2014			December 3, 2013
Segment profit/(loss)	$	19,200		$	(913	)	$	49,365		$	6,484
Less:
Depreciation and amortization		(13,120	)		(14,598	)		(26,358	)		(29,472	)
Unallocated general and administrative expenses		(9,823	)		(13,760	)		(20,785	)		(25,657	)
Preopening expenses		(162	)		(41	)		(203	)		(395	)
Interest expense, net		(5,915	)		(6,620	)		(11,337	)		(13,373	)
Other expense, net		(48	)		(715	)		(619	)		(1,286	)
Loss from continuing operations before income taxes	$	(9,868	)	$	(36,647	)	$	(9,937	)	$	(63,699	)

XML

Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Dec. 02, 2014	Dec. 03, 2013	Dec. 02, 2014	Dec. 03, 2013
Revenue:
Restaurant sales and operating revenue	$ 261,206	$ 274,719	$ 540,663	$ 562,811
Franchise revenue	1,453	1,490	3,178	3,072
	262,659	276,209	543,841	565,883
Operating costs and expenses:
Cost of goods sold	71,646	77,669	146,793	157,607
Payroll and related costs	93,964	97,517	189,806	200,250
Other restaurant operating costs	60,097	65,289	119,896	132,823
Depreciation	12,538	13,915	25,196	28,124
Selling, general and administrative, net	27,292	37,031	58,193	74,046
Closures and impairments, net	1,075	14,143	2,557	22,176
Interest expense, net	5,915	6,620	11,337	13,373
Loss on extinguishment of debt		672		1,183
	272,527	312,856	553,778	629,582
Loss from continuing operations before income taxes	(9,868)	(36,647)	(9,937)	(63,699)
Benefit for income taxes from continuing operations	(595)	(1,910)	(3,229)	(7,063)
Loss from continuing operations	(9,273)	(34,737)	(6,708)	(56,636)
Income from discontinued operations, net of tax		354		11
Net loss	(9,273)	(34,383)	(6,708)	(56,625)
Other comprehensive income:
Pension liability reclassification	464	477	927	955
Total comprehensive loss	$ (8,809)	$ (33,906)	$ (5,781)	$ (55,670)
Basic loss per share:
Loss from continuing operations (in Dollars per share)	$ (0.15)	$ (0.58)	$ (0.11)	$ (0.94)
Income from discontinued operations (in Dollars per share)		$ 0.01
Net loss per share (in Dollars per share)	$ (0.15)	$ (0.57)	$ (0.11)	$ (0.94)
Diluted loss per share:
Loss from continuing operations (in Dollars per share)	$ (0.15)	$ (0.58)	$ (0.11)	$ (0.94)
Income from discontinued operations (in Dollars per share)		$ 0.01
Net loss per share (in Dollars per share)	$ (0.15)	$ (0.57)	$ (0.11)	$ (0.94)
Weighted average shares:
Basic (in Shares)	60,534	60,196	60,476	60,111
Diluted (in Shares)	60,534	60,196	60,476	60,111

XML

Note G - Property, Equipment, Assets Held for Sale, Operating Leases, and Sale-leaseback Transactions

6 Months Ended

Dec. 02, 2014

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment Disclosure [Text Block]

NOTE G – PROPERTY, EQUIPMENT, ASSETS HELD FOR SALE, OPERATING LEASES, AND SALE-LEASEBACK TRANSACTIONS

Property and equipment, net, is comprised of the following (in thousands):

	December 2, 2014		June 3, 2014
Land	$	212,282	$	214,277
Buildings		426,800		430,988
Improvements		364,520		365,599
Restaurant equipment		249,436		248,852
Other equipment		86,658		84,876
Construction in progress and other*		17,998		22,246
		1,357,694		1,366,838
Less accumulated depreciation		585,868		571,992
	$	771,826	$	794,846

* Included in Construction in progress and other as of December 2, 2014 and June 3, 2014 are $14.7 million and $18.4 million, respectively, of assets held for sale that are not classified as such in the Condensed Consolidated Balance Sheets as we do not expect to sell these assets within the next 12 months. These assets primarily consist of parcels of land upon which we have no intention to build restaurants and closed properties which include a building.

Included within the current assets section of our Condensed Consolidated Balance Sheets at December 2, 2014 and June 3, 2014 are amounts classified as held for sale totaling $7.1 million and $4.7 million, respectively. Assets held for sale primarily consist of parcels of land upon which we have no intention to build restaurants, land and buildings of closed restaurants, and various liquor licenses. During the 13 and 26 weeks ended December 2, 2014, we sold surplus properties with carrying values of $4.5 million for both periods, at net gains of $0.8 million and $1.1 million, respectively. Cash proceeds, net of broker fees, from these sales during the 13 and 26 weeks ended December 2, 2014 totaled $5.3 million and $5.6 million, respectively. During the 13 and 26 weeks ended December 3, 2013, we sold surplus properties with carrying values of $5.6 million and $8.2 million, respectively, at net gains of $0.3 million and $0.2 million, respectively. Cash proceeds, net of broker fees, from these sales during the 13 and 26 weeks ended December 3, 2013 totaled $5.8 million and $8.4 million, respectively.

Approximately 56% of our 683 Company-owned restaurants are located on leased properties. Of these, approximately 68% are land leases only; the other 32% are for both land and building. The initial terms of these leases expire at various dates over the next 22 years. These leases may also contain required increases in minimum rent at varying times during the lease term and have options to extend the terms of the leases at a rate that is included in the original lease agreement. Most of our leases require the payment of additional (contingent) rent that is based upon a percentage of restaurant sales above agreed upon sales levels for the year. These sales levels vary for each restaurant and are established in the lease agreements. We recognize contingent rental expense (in annual as well as interim periods) prior to the achievement of the specified target that triggers the contingent rental expense, provided that achievement of that target is considered probable.

During the 26 weeks ended December 3, 2013, we completed sale-leaseback transactions of the land and building for three Company-owned Ruby Tuesday concept restaurants for gross cash proceeds of $5.9 million, exclusive of transaction costs of approximately $0.3 million. Equipment was not included. The carrying value of the properties sold was $4.8 million. None of these sale-leaseback transactions occurred during the 13 weeks ended December 3, 2013. The leases have been classified as operating leases and have initial terms of 15 years, with renewal options of up to 20 years following a rent reset based on fair market value at the end of the initial term. Net proceeds from fiscal year 2014’s sale-leaseback transactions were used for general corporate purposes, including debt payments and the repurchase of shares of our common stock.

We realized gains on these transactions during the 26 weeks ended December 3, 2013 of $0.8 million, which have been deferred and are being recognized on a straight-line basis over the initial terms of the leases. The current portion of the deferred gains on all sale-leaseback transactions was $1.1 million as of each of December 2, 2014 and June 3, 2014, and is included in Accrued liabilities – Rent and other in our Condensed Consolidated Balance Sheets. The long-term portion of the deferred gains on all sale-leaseback transactions was $12.4 million and $13.0 million as of December 2, 2014 and June 3, 2014, respectively, and is included in Other deferred liabilities in our Condensed Consolidated Balance Sheets. Amortization of the deferred gains of $0.3 million and $0.5 million for each of the 13- and 26-week periods ended December 2, 2014 and December 3, 2013, respectively, is included within Other restaurant operating costs in our Condensed Consolidated Statements of Operations and Comprehensive Loss.

XML

Note F - Inventories

6 Months Ended

Dec. 02, 2014

Inventory Disclosure [Abstract]

Inventory Disclosure [Text Block]

NOTE F – INVENTORIES

Our merchandise inventory was $18.9 million and $12.9 million as of December 2, 2014 and June 3, 2014, respectively. In order to ensure adequate supply and competitive pricing, we sometimes purchase lobster in advance of our needs and store it in third-party facilities prior to our distributor taking possession of the inventory. The increase in our merchandise inventory from the end of the prior fiscal year is due primarily to advance purchases of lobster during the second quarter of fiscal year 2015.

XML

Note B - Loss Per Share and Stock Repurchases (Tables)

6 Months Ended

Dec. 02, 2014

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

	Thirteen weeks ended						Twenty-six weeks ended
	December 2, 2014			December 3, 2013			December 2, 2014			December 3, 2013
Loss from continuing operations	$	(9,273	)	$	(34,737	)	$	(6,708	)	$	(56,636	)
Income from discontinued operations, net of tax		-			354			-			11
Net loss	$	(9,273	)	$	(34,383	)	$	(6,708	)	$	(56,625	)
Weighted-average common shares outstanding		60,534			60,196			60,476			60,111
Dilutive effect of stock options and restricted stock		-			-			-			-
Weighted average common and dilutive potential common shares outstanding		60,534			60,196			60,476			60,111
Loss per share – Basic
Loss from continuing operations	$	(0.15	)	$	(0.58	)	$	(0.11	)	$	(0.94	)
Income from discontinued operations		-			0.01			-			-
Net loss per share	$	(0.15	)	$	(0.57	)	$	(0.11	)	$	(0.94	)
Loss per share – Diluted
Loss from continuing operations	$	(0.15	)	$	(0.58	)	$	(0.11	)	$	(0.94	)
Income from discontinued operations		-			0.01			-			-
Net loss per share	$	(0.15	)	$	(0.57	)	$	(0.11	)	$	(0.94	)

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block]

	Thirteen weeks ended						Twenty-six weeks ended
	December 2, 2014			December 3, 2013			December 2, 2014			December 3, 2013
Stock options		3,301	*		2,839	*		3,102	*		2,977	*
Restricted shares		1,468	*		1,074	*		1,319	*		1,160	*
Total		4,769			3,913			4,421			4,137

XML

Note N - Commitments and Contingencies

6 Months Ended

Dec. 02, 2014

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies Disclosure [Text Block]

NOTE N – COMMITMENTS AND CONTINGENCIES

Litigation

We are presently, and from time to time, subject to pending claims and lawsuits arising in the ordinary course of business. We provide reserves for such claims when payment is probable and estimable in accordance with GAAP. At this time, in the opinion of management, the ultimate resolution of pending legal proceedings, including the matter referred to below, will not have a material adverse effect on our operations, financial position, or cash flows.

On April 17, 2012, a wage and hour case styled Guttentag, et al vs. Ruby Tuesday, Inc. was filed in the United States District Court, Southern District of New York.  The named plaintiffs, and five additional former employees who have joined the suit as opt-in plaintiffs, alleged that the Company violated the Fair Labor Standards Act and state wage and hour laws in New York and Florida.  Plaintiffs filed their motion for conditional certification on March 8, 2013, which sought a nationwide putative class of all current and former servers, bartenders, and food runners who worked for the Company for the three-year period prior to the filing of the lawsuit.  On June 11, 2013, the court entered an order granting conditional certification of the nationwide class requested by plaintiffs, but for the time frame of June 11, 2010 to the present. Notice of the lawsuit and the right to opt-in was mailed to the putative class members in November 2013, and approximately 5%, or about 4,170 of the putative class members, filed consents to opt-in. The parties engaged in mediation and reached a preliminary settlement agreement that, upon court approval, would resolve the lawsuit and result in its dismissal with prejudice. The total settlement sum is $3.0 million, and would cover the claims of all named and opt-in plaintiffs, including plaintiffs’ claims for costs and attorneys’ fees.

On October 2, 2014, the court granted the motion to approve the settlement without modification. Now that the thirty-day appeals period has run without the filing of any appeals, the settlement agreement has become effective, final, and binding. The Company funded $1.3 million of the total settlement sum on November 24, 2014, and subsequently funded the balance due on December 23, 2014, once taxes required to be withheld from the wage portion of the settlement were calculated and deducted. Accordingly, included within Accrued liabilities – Rent and other in our December 2, 2014 Condensed Consolidated Balance Sheet is a $1.7 million accrual in connection with this case. Per the court’s approval order, the case has now been dismissed with prejudice, subject to the court retaining jurisdiction to enforce the terms of the settlement agreement.

XML

Note J - Employee Post-employment Benefits

6 Months Ended

Dec. 02, 2014

Compensation and Retirement Disclosure [Abstract]

Pension and Other Postretirement Benefits Disclosure [Text Block]

NOTE J – EMPLOYEE POST-EMPLOYMENT BENEFITS

We sponsor three defined benefit pension plans for active employees and offer certain postretirement benefits for retirees. A summary of each of these is presented below.

Retirement Plan

RTI sponsors the Morrison Restaurants Inc. Retirement Plan (the “Retirement Plan”). Effective December 31, 1987, the Retirement Plan was amended so that no additional benefits would accrue and no new participants may enter the Retirement Plan after that date. Participants receive benefits based upon salary and length of service.

Minimum funding for the Retirement Plan is determined in accordance with the guidelines set forth in employee benefit and tax laws. From time to time we may contribute additional amounts as we deem appropriate. We estimate that we will be required to make contributions totaling $0.3 million to the Retirement Plan during the remainder of fiscal year 2015.

Executive Supplemental Pension Plan and Management Retirement Plan

Under these unfunded defined benefit pension plans, eligible employees earn supplemental retirement income based upon salary and length of service, reduced by social security benefits and amounts otherwise receivable under other specified Company retirement plans. Effective June 1, 2001, the Management Retirement Plan was amended so that no additional benefits would accrue and no new participants may enter the plan after that date.

Included in our Condensed Consolidated Balance Sheets as of December 2, 2014 and June 3, 2014 are amounts within Accrued liabilities: Payroll and related costs of $3.3 million as of both dates and amounts within Other deferred liabilities of $32.3 million and $32.5 million, respectively, relating to our three defined benefit pension plans.

Postretirement Medical and Life Benefits

Our Postretirement Medical and Life Benefits plans provide medical and life insurance benefits to certain retirees. The medical plan requires retiree cost sharing provisions that are more substantial for employees who retire after January 1, 1990.

The following tables detail the components of net periodic benefit costs and the amounts recognized in our Condensed Consolidated Financial Statements for the Retirement Plan, Management Retirement Plan, and the Executive Supplemental Pension Plan (collectively, the “Pension Plans”) and the Postretirement Medical and Life Benefits plans (in thousands):

	Pension Benefits
	Thirteen weeks ended						Twenty-six weeks ended
	December 2,			December 3,			December 2,			December 3,
	2014			2013			2014			2013
Service cost	$	75		$	89		$	150		$	178
Interest cost		444			434			887			868
Expected return on plan assets		(125	)		(111	)		(249	)		(222	)
Recognized actuarial loss		430			428			860			856
Net periodic benefit cost	$	824		$	840		$	1,648		$	1,680

	Postretirement Medical and Life Benefits
	Thirteen weeks ended					Twenty-six weeks ended
	December 2,		December 3,			December 2,		December 3,
	2014		2013			2014		2013
Service cost	$	1	$	3		$	2	$	6
Interest cost		11		17			23		34
Amortization of prior service cost (a)		-		(11	)		-		(22	)
Recognized actuarial loss		34		61			67		122
Net periodic benefit cost	$	46	$	70		$	92	$	140

(a) Prior service costs are amortized on a straight-line basis over the average remaining service period of employees expected to receive benefits.

During the 13 and 26 weeks ended December 2, 2014 and December 3, 2013, we reclassified recognized actuarial losses and amortized prior service costs out of accumulated other comprehensive loss and into pension expense, which is included in Selling, general and administrative, net within our Condensed Consolidated Statements of Operations and Comprehensive Loss, as follows (in thousands):

	Thirteen weeks ended					Twenty-six weeks ended
	December 2, 2014		December 3, 2013			December 2, 2014		December 3, 2013
Recognized actuarial loss	$	464	$	488		$	927	$	977
Amortization of prior service cost		-		(11	)		-		(22	)
Pension liability reclassification	$	464	$	477		$	927	$	955

The following table is a rollforward of accumulated other comprehensive loss for the 26 weeks ended December 2, 2014 (in thousands):

	Accumulated Other Comprehensive Loss
Balance at June 3, 2014	$	(10,900	)
Pension liability reclassification		927
Balance at December 2, 2014	$	(9,973	)

We also sponsor two defined contribution retirement savings plans. Information regarding these plans is included in our Annual Report on Form 10-K for the fiscal year ended June 3, 2014.

Executive Separations

On June 26, 2014, our then Executive Vice President, Chief Financial Officer left the Company. Additionally, our Senior Vice President, Chief Development Officer also left the Company on July 24, 2014. During the 26 weeks ended December 2, 2014, we recorded severance expense and made severance payments of $0.3 million in connection with the separation agreements for these former executives.

As of December 2, 2014, liabilities of $0.3 million, representing unpaid obligations in connection with the employee separations, were included within Accrued liabilities: Payroll and related costs in our Condensed Consolidated Balance Sheet. A rollforward of our obligations in connection with employee separations is as follows (in thousands):

Balance at June 3, 2014	$	1,055
Employee severance and unused vacation accruals		934
Cash payments		(1,651	)
Balance at December 2, 2014	$	338

See Note L to the Condensed Consolidated Financial Statements for discussion of the impact of executive separations to our share-based employee compensation costs.

XML

Note M - Segment Reporting (Details) - Reconciliation of Segment Profit to (Loss)/Income from Continuing Operations before Taxes (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Dec. 02, 2014	Dec. 03, 2013	Dec. 02, 2014	Dec. 03, 2013
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Segment profit/(loss)	$ 19,200	$ (913)	$ 49,365	$ 6,484
Less:
Depreciation and amortization	(13,120)	(14,598)	(26,358)	(29,472)
Unallocated general and administrative expenses	(27,292)	(37,031)	(58,193)	(74,046)
Preopening expenses	(162)	(41)	(203)	(395)
Interest expense, net	(5,915)	(6,620)	(11,337)	(13,373)
Other expense, net	(48)	(715)	(619)	(1,286)
Loss from continuing operations before income taxes	(9,868)	(36,647)	(9,937)	(63,699)
Corporate, Non-Segment [Member]
Less:
Unallocated general and administrative expenses	$ (9,823)	$ (13,760)	$ (20,785)	$ (25,657)

XML

Note H - Long-term Debt and Capital Leases

6 Months Ended

Dec. 02, 2014

Disclosure Text Block Supplement [Abstract]

Debt and Capital Leases Disclosures [Text Block]

NOTE H – LONG-TERM DEBT AND CAPITAL LEASES

Long-term debt and capital lease obligations consist of the following (in thousands):

	December 2, 2014			June 3, 2014
Senior unsecured notes	$	215,000		$	215,000
Unamortized discount		(2,336	)		(2,503	)
Senior unsecured notes less unamortized discount		212,664			212,497
Revolving credit facility		-			-
Mortgage loan obligations		39,002			45,252
Unamortized premium on mortgage loan obligations		570			741
Capital lease obligations		185			201
		252,421			258,691
Less current maturities		4,506			4,816
	$	247,915		$	253,875

On May 14, 2012, we entered into an indenture (the “Indenture”) among the Company, certain subsidiaries of the Company as guarantors and Wells Fargo Bank, National Association as trustee, governing the Company’s $250.0 million aggregate principal amount of 7.625% senior notes due 2020 (the “Senior Notes”). The Senior Notes were issued at a discount of $3.7 million, which is being amortized using the effective interest method over the eight-year term of the notes.

The Senior Notes are guaranteed on a senior unsecured basis by our existing and future domestic restricted subsidiaries, subject to certain exceptions. They rank equal in right of payment with our existing and future senior indebtedness and senior in right of payment to any of our future subordinated indebtedness. The Senior Notes are effectively subordinated to all of our secured debt, including borrowings outstanding under our revolving credit facility, to the extent of the value of the assets securing such debt and structurally subordinated to all of the liabilities of our existing and future subsidiaries that do not guarantee the Senior Notes.

Interest on the Senior Notes is calculated at 7.625% per annum, payable semiannually on each May 15 and November 15 to holders of record on the May 1 or November 1 immediately preceding the interest payment date. Accrued interest on the Senior Notes and our other long-term debt and capital lease obligations is included in Accrued liabilities – Rent and other in our Condensed Consolidated Balance Sheets. The Senior Notes mature on May 15, 2020.

At any time prior to May 15, 2016, we may redeem the Senior Notes, in whole or in part, at a redemption price equal to 100% of the principal amount, plus an applicable “make-whole” premium and accrued and unpaid interest. At any time on or after May 15, 2016, we may redeem the Senior Notes, in whole or in part, at the redemption prices specified in the Indenture plus accrued and unpaid interest. At any time prior to May 15, 2015, we may redeem up to 35% of the Senior Notes from the proceeds of certain equity offerings. There is no sinking fund for the Senior Notes.

The Indenture contains covenants that limit, among other things, our ability and the ability of certain of our subsidiaries to (i) incur or guarantee additional indebtedness; (ii) declare or pay dividends, redeem stock or make other distributions to stockholders; (iii) make certain investments; (iv) create liens or use assets as security in other transactions; (v) merge or consolidate, or sell, transfer, lease or dispose of substantially all of their assets; (vi) enter into transactions with affiliates; and (vii) sell or transfer certain assets. These covenants are subject to a number of important exceptions and qualifications, as described in the Indenture, and certain covenants will not apply at any time when the Senior Notes are rated investment grade by the Rating Agencies, as defined in the Indenture. The Indenture also provides for events of default, which, if any of them occurs, would permit or require the principal, premium, if any, interest and any other monetary obligations on all the then outstanding Senior Notes to be due and payable immediately.

Under the terms of our December 2013 four-year revolving credit agreement discussed below (the “Senior Credit Facility”) we are allowed, under certain circumstances, to repurchase up to $20.0 million of the Senior Notes in any fiscal year. We did not repurchase any Senior Notes during the first two quarters of fiscal year 2015. The balance on the Senior Notes was $215.0 million at December 2, 2014.

On December 3, 2013, we entered into the Senior Credit Facility under which we may borrow up to $50.0 million with the option, subject to certain conditions, to increase the facility by up to $35.0 million. The Senior Credit Facility, which was obtained to provide access to capital for general corporate purposes, replaced a previous five-year $200.0 million credit facility that was set to expire in December 2015. The terms of the Senior Credit Facility provide for a $25.0 million sublimit for the issuance of standby letters of credit.

Under the terms of the Senior Credit Facility, interest rates charged on borrowings can vary depending on the interest rate option we choose to utilize. Our options for the rate are a Base Rate or LIBOR, plus an applicable margin. The Base Rate is defined as the highest of the issuing bank’s prime rate, the Federal Funds rate plus 0.50%, or the Adjusted LIBO rate (as defined in the Senior Credit Facility) plus 1.0%. The applicable margin for the LIBOR rate-based option is a percentage ranging from 2.50% to 3.50% and for the Base Rate option is a percentage ranging from 1.50% to 2.50%. We pay commitment fees quarterly ranging from 0.40% to 0.75% on the unused portion of the Senior Credit Facility.

As security for the Senior Credit Facility, we granted the lenders liens and security interests in substantially all of the shares of capital stock of the Company and each of our present and future subsidiaries, substantially all of the personal property of the Company and each of our present and future subsidiaries, and the real property, improvements, and fixtures of 49 Ruby Tuesday restaurants. The real property, improvements, and fixtures of the 49 restaurants pledged as collateral appraised at $101.4 million at the time of the transaction and have a December 2, 2014 net book value of $80.0 million.

Under the Senior Credit Facility, we had no borrowings outstanding at December 2, 2014. After consideration of letters of credit outstanding, we had $37.5 million available under the Senior Credit Facility as of December 2, 2014.

The Senior Credit Facility contains a number of customary affirmative and negative covenants that, among other things, limit or restrict our ability to incur liens, engage in mergers or other fundamental changes, make acquisitions, investments, loans and advances, pay dividends or other distributions, sell or otherwise dispose of certain assets, engage in certain transactions with affiliates, enter into burdensome agreements or certain hedging agreements, amend organizational documents, change accounting practices, incur additional indebtedness and prepay other indebtedness. In addition, under the Senior Credit Facility, we are required to comply with financial covenants relating to the maintenance of a maximum leverage ratio and a minimum fixed charge coverage ratio. The terms of the Senior Credit Facility require us to maintain a maximum leverage ratio of no more than 4.85 to 1.0 and a minimum fixed charge coverage ratio of 1.35 to 1.0 for the quarter ended December 2, 2014. The minimum required ratios fluctuate thereafter as provided in the Senior Credit Facility.

The Senior Credit Facility terminates no later than December 3, 2017.  Upon the occurrence of an event of default, the lenders may terminate the loan commitments, accelerate all loans and exercise any of their rights under the Senior Credit Facility and any ancillary loan documents.

On December 3, 2013, in connection with our entry into the Senior Credit Facility, the Company and certain of its subsidiaries entered into loan modification agreements (the “Loan Modification Agreements”) with certain mortgage lenders to, among other things, provide waivers and consents under certain of our mortgage loan obligations to enter into the Senior Credit Facility. The Loan Modification Agreements also, among other things, amend certain financial reporting requirements under the specified loans and modify and/or provide for certain financial covenants for the specified loans, including the minimum consolidated

fixed charge coverage ratio and the minimum adjusted total debt to EBITDAR ratio.

Our $39.0 million in mortgage loan obligations as of December 2, 2014 consists of various loans acquired upon franchise acquisitions. These loans, which mature between January 2015 and November 2022, have balances which range from negligible to $7.5 million and interest rates of 7.60% to 10.92%. Many of the properties acquired from franchisees collateralize the loans outstanding.

During the 13 weeks ended December 2, 2014, we prepaid and retired three mortgage loan obligations with an aggregate balance of $3.9 million using cash on hand. Additionally, we paid $0.4 million in prepayment premiums in connection with the retirement of these obligations.

XML

Note I - Closure and Impairments Expense

6 Months Ended

Dec. 02, 2014

Disclosure Text Block Supplement [Abstract]

Asset Impairment Charges [Text Block]

NOTE I – CLOSURES AND IMPAIRMENTS EXPENSE

Closures and impairments expense includes the following for the 13 and 26 weeks ended December 2, 2014 and December 3, 2013 (in thousands):

	Thirteen weeks ended						Twenty-six weeks ended
	December 2, 2014			December 3, 2013			December 2, 2014			December 3, 2013
Closures and impairments from continuing operations:
Property impairments	$	1,216		$	12,318		$	2,272		$	17,248
Closed restaurant lease reserves		295			1,702			761			4,297
Other closing costs		395			110			628			578
(Gain)/loss on sale of surplus properties		(831	)		13			(1,104	)		53
Closures and impairments, net	$	1,075		$	14,143		$	2,557		$	22,176
Closures and impairments from discontinued operations				$	(453	)				$	65

A rollforward of our reserve for future lease obligations associated with closed properties is as follows (in thousands):

	Reserve for Lease Obligations
Balance at June 3, 2014	$	10,873
Closing expense including rent and other lease charges		761
Payments		(2,309	)
Other		(340	)
Balance at December 2, 2014	$	8,985

The amounts comprising future lease obligations in the table above are estimated using certain assumptions, including the period of time it will take to settle the lease with the landlord or find a suitable sublease tenant, and the amount of actual future cash payments could differ from our recorded lease obligations. Of the total future lease obligations included in the table above, $8.8 million and $10.5 million are included within the Accrued liabilities – Rent and other caption in our Consolidated Balance Sheets as of December 2, 2014 and June 3, 2014, respectively. The actual amount of any cash payments made by the Company for lease contract termination costs will be dependent upon ongoing negotiations with the landlords of the leased restaurant properties.

XML

Note K - Income Taxes

6 Months Ended

Dec. 02, 2014

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

NOTE K – INCOME TAXES

In July 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (“ASU 2013-11”). The guidance requires an entity to present its deferred tax asset for a net operating loss carryforward, similar tax loss, or a tax credit carryforward net of unrecognized tax benefits when settlement in this manner is available under the tax law, which would be based on facts and circumstances as of the balance sheet reporting date and would not consider future events. Gross presentation of an unrecognized tax benefit will still be required in the notes to the financial statements. We adopted ASU 2013-11 on a prospective basis during the first quarter of fiscal year 2015. The adoption of this standard in the first quarter of fiscal year 2015 resulted in a reclassification of $5.0 million of our liability for unrecognized tax benefits against our deferred tax assets.

Under Accounting Standards Codification 740 (“ASC 740”), companies are required to apply their estimated annual tax rate on a year-to-date basis in each interim period. Under ASC 740, companies should not apply the estimated annual tax rate to interim financial results if the estimated annual tax rate is not reliably predictable. In this situation, the interim tax rate should be based on the actual year-to-date results. Due to changes in our projections, which have fluctuated as we work through our brand repositioning, a reliable projection of our annual effective rate has been difficult to determine. As such, we recorded a tax provision for the 26 weeks ended December 2, 2014 based on the actual year-to-date results, in accordance with ASC 740.

We regularly evaluate the need for a valuation allowance for deferred tax assets by assessing whether it is more likely than not that we will realize the deferred tax assets in the future.  A valuation allowance assessment is performed each reporting period, with any additions or adjustments reflected in earnings in the period of assessment.  In assessing the need for a valuation allowance, we consider both positive and negative evidence related to the likelihood of realization of the deferred tax assets for each jurisdiction.

Prior to the fourth quarter of fiscal year 2013, we concluded that objective and subjective positive evidence outweighed negative evidence, and it was more likely than not that we would realize all of our federal and most of our state deferred tax assets, except for loss carryforwards in certain states that have had cumulative losses and/or relatively short carryforward periods and annual limits of loss carryforward that is available for use to offset future taxable income.   During the fourth quarter of fiscal year 2013, we recorded a valuation allowance following the conclusion that the negative evidence outweighed the positive evidence. 

We recorded a tax benefit from continuing operations of $0.6 million and $3.2 million for the 13 and 26 weeks ended December 2, 2014, respectively, compared to a tax benefit from continuing operations of $1.9 million and $7.1 million for the 13 and 26 weeks ended December 3, 2013, respectively. Included in our $3.2 million tax benefit from continuing operations for the 26 weeks ended December 2, 2014 was a benefit of $3.2 million recorded during the first quarter of fiscal year 2015 representing an immaterial prior period correction to our deferred tax asset valuation allowance.

Our valuation allowance for deferred tax assets totaled $57.6 million and $54.6 million as of December 2, 2014 and June 3, 2014, respectively.

We had a gross liability for unrecognized tax benefits, exclusive of accrued interest and penalties, of $4.4 million and $7.0 million as of December 2, 2014 and June 3, 2014, respectively. As of December 2, 2014 and June 3, 2014, the total amount of unrecognized tax benefits that, if recognized, would impact our effective tax rate was $2.5 million and $2.6 million, respectively. The liability for unrecognized tax benefits as of December 2, 2014 includes $0.3 million related to tax positions for which it is reasonably possible that the total amounts could change within the next twelve months based on the outcome of examinations and negotiations with tax authorities.

Interest and penalties related to unrecognized tax benefits are recognized as components of income tax expense. As of December 2, 2014 and June 3, 2014, we had accrued $0.4 million and $0.5 million, respectively, for the payment of interest and penalties. During the first 26 weeks of fiscal year 2015, accrued interest and penalties decreased by $0.1 million.

At December 2, 2014, we are no longer subject to U.S. federal income tax examinations by tax authorities for fiscal years prior to 2011, and with few exceptions, state and local examinations by tax authorities prior to fiscal year 2011.

XML

Note O – Fair Value Measurements (Details) - Losses Recognized from Fair Value Measurements on Non-recurring Basis (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Dec. 02, 2014	Dec. 03, 2013	Dec. 02, 2014	Dec. 03, 2013
Included within continuing operations
Asset impairment charges			$ 3,359	$ 17,746
Continuing Operations [Member]
Included within continuing operations
Long-lived assets held for sale	203	315	802	584
Long-lived assets held for use	1,013	12,003	1,470	16,664
Asset impairment charges	1,216	12,318	2,272	17,248
Discontinued Operations [Member]
Included within continuing operations
Asset impairment charges				$ 153

XML

Note P – Supplemental Condensed Consolidating Financial Statements (Details) - Condensed Consolidating Balance Sheets (USD $) In Thousands, unless otherwise specified	Dec. 02, 2014	Jun. 03, 2014	Dec. 03, 2013	Jun. 04, 2013
Current assets:
Cash and cash equivalents	$ 48,170	$ 51,326	$ 23,618	$ 52,907
Accounts receivable	5,631	4,861
Inventories	26,720	21,174
Income tax receivable	3,174	2,133
Other current assets	19,734	16,899
Total current assets	103,429	99,790
Property and equipment, net	771,826	794,846
Other assets	59,460	61,791
Total assets	934,715	956,427
Current liabilities:
Accounts payable	26,965	26,201
Accrued and other current liabilities	77,471	82,806
Current maturities of long-term debt, including capital leases	4,506	4,816
Deferred income taxes	58	3,397
Total current liabilities	109,000	113,823
Long-term debt and capital leases, less current maturities	247,915	253,875
Deferred income taxes	2,224	3,500
Other deferred liabilities	116,245	124,020
Total liabilities	475,384	495,218
Shareholders’ equity:
Common stock	621	614
Capital in excess of par value	80,165	76,269
Retained earnings	388,518	395,226
Accumulated other comprehensive loss	(9,973)	(10,900)
Total shareholders’ equity	459,331	461,209
Total liabilities & shareholders’ equity	934,715	956,427
Consolidation, Eliminations [Member]
Current assets:
Cash and cash equivalents	0
Income tax receivable	(139,990)	(136,391)
Total current assets	(139,990)	(136,391)
Investment in subsidiaries	(134,430)	(158,266)
Due from/(to) subsidiaries	(299,731)	(322,277)
Total assets	(574,151)	(616,934)
Current liabilities:
Income tax payable	(139,990)	(136,391)
Total current liabilities	(139,990)	(136,391)
Due to/(from) subsidiaries	(299,731)	(322,277)
Total liabilities	(439,721)	(458,668)
Shareholders’ equity:
Retained earnings	(134,430)	(158,266)
Total shareholders’ equity	(134,430)	(158,266)
Total liabilities & shareholders’ equity	(574,151)	616,934
Parent Company [Member]
Current assets:
Cash and cash equivalents	47,866	51,012	23,313	52,635
Accounts receivable	2,088	1,725
Inventories	18,762	15,114
Income tax receivable	143,164	138,524
Other current assets	16,694	14,610
Total current assets	228,574	220,437
Property and equipment, net	570,506	587,783
Investment in subsidiaries	134,430	158,266
Due from/(to) subsidiaries	79,676	78,612
Other assets	47,471	48,780
Total assets	1,060,657	1,093,878
Current liabilities:
Accounts payable	21,339	20,545
Accrued and other current liabilities	43,125	46,450
Current maturities of long-term debt, including capital leases	(354)	(341)
Deferred income taxes	3,062	(548)
Total current liabilities	67,172	66,654
Long-term debt and capital leases, less current maturities	213,204	213,039
Deferred income taxes	(1,867)	(445)
Due to/(from) subsidiaries	220,055	243,665
Other deferred liabilities	102,762	109,756
Total liabilities	601,326	632,669
Shareholders’ equity:
Common stock	621	614
Capital in excess of par value	80,165	76,269
Retained earnings	388,518	395,226
Accumulated other comprehensive loss	(9,973)	(10,900)
Total shareholders’ equity	459,331	461,209
Total liabilities & shareholders’ equity	1,060,657	1,093,878
Guarantor Subsidiaries [Member]
Current assets:
Cash and cash equivalents	304	314	305	272
Accounts receivable	3,543	3,136
Inventories	7,958	6,060
Other current assets	3,040	2,289
Total current assets	14,845	15,744
Property and equipment, net	201,320	207,063
Due from/(to) subsidiaries	220,055	243,665
Other assets	11,989	13,011
Total assets	448,209	479,483
Current liabilities:
Accounts payable	5,626	5,656
Accrued and other current liabilities	34,346	36,356
Current maturities of long-term debt, including capital leases	4,860	5,157
Deferred income taxes	(3,004)	3,945
Income tax payable	139,990	136,391
Total current liabilities	181,818	183,560
Long-term debt and capital leases, less current maturities	34,711	40,836
Deferred income taxes	4,091	3,945
Due to/(from) subsidiaries	79,676	78,612
Other deferred liabilities	13,483	14,264
Total liabilities	313,779	321,217
Shareholders’ equity:
Retained earnings	134,430	158,266
Total shareholders’ equity	134,430	158,266
Total liabilities & shareholders’ equity	$ 448,209	$ 479,483

XML

Note O – Fair Value Measurements (Details) - Fair Values Financial Assets and Liabilities Measured on a Non-recurring Basis (Fair Value, Inputs, Level 2 [Member], USD $) In Thousands, unless otherwise specified	Dec. 02, 2014
Note O – Fair Value Measurements (Details) - Fair Values Financial Assets and Liabilities Measured on a Non-recurring Basis [Line Items]
Assets, Fair Value Disclosure, Nonrecurring	$ 1,837
Assets Held-for-sale [Member]
Note O – Fair Value Measurements (Details) - Fair Values Financial Assets and Liabilities Measured on a Non-recurring Basis [Line Items]
Assets, Fair Value Disclosure, Nonrecurring	1,770
Assets Held-for-Use [Member]
Note O – Fair Value Measurements (Details) - Fair Values Financial Assets and Liabilities Measured on a Non-recurring Basis [Line Items]
Assets, Fair Value Disclosure, Nonrecurring	$ 67

XML

Note B - Loss Per Share and Stock Repurchases (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Dec. 02, 2014
Earnings Per Share [Abstract]
Stock Repurchased and Retired During Period, Value	$ 0.1
Stock Repurchase Program, Remaining Number of Shares Authorized to be Repurchased	11.8

XML

Note J - Employee Post-employment Benefits (Details) - Changes in the Amounts Recognized in Accumulated Other Comprehensive Income/(Loss) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Dec. 02, 2014	Dec. 03, 2013	Dec. 02, 2014	Dec. 03, 2013
Changes in the Amounts Recognized in Accumulated Other Comprehensive Income/(Loss) [Abstract]
Recognized actuarial loss	$ 464	$ 488	$ 927	$ 977
Amortization of prior service cost		(11)		(22)
Pension liability reclassification	$ 464	$ 477	$ 927	$ 955

XML

Note P – Supplemental Condensed Consolidating Financial Statements

6 Months Ended

Dec. 02, 2014

Disclosure Text Block Supplement [Abstract]

Condensed Financial Statements [Text Block]

NOTE P – SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL STATEMENTS

As discussed in Note H to the Condensed Consolidated Financial Statements, the Senior Notes held by Ruby Tuesday, Inc. (the “Parent”) are guaranteed on a senior unsecured basis by our existing and future domestic restricted subsidiaries, subject to certain exceptions (the “Guarantors”). Each of the Guarantors is wholly-owned by Ruby Tuesday, Inc. None of the few remaining subsidiaries of Ruby Tuesday, Inc., which were primarily created to hold liquor license assets, guarantee the Senior Notes (the “Non-Guarantors”). Our Non-Guarantor subsidiaries are immaterial and are aggregated within the Parent information disclosed below.

The following condensed consolidating financial information, which has been prepared in accordance with the requirements for presentation of Rule 3-10(f) of Regulation S-X promulgated by the Securities and Exchange Commission, presents the condensed consolidating financial information separately for the Parent, the Guarantors, and elimination entries necessary to consolidate the Parent and Guarantors. Investments in wholly-owned subsidiaries are accounted for using the equity method for purposes of the consolidated presentation. The principal elimination entries eliminate investments in subsidiaries and intercompany balances and transactions.

Condensed Consolidating Balance Sheet

As of December 2, 2014

(In thousands)

	Parent			Guarantors			Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	47,866		$	304		$	-		$	48,170
Accounts receivable		2,088			3,543			-			5,631
Inventories		18,762			7,958			-			26,720
Income tax receivable		143,164			-			(139,990	)		3,174
Other current assets		16,694			3,040			-			19,734
Total current assets		228,574			14,845			(139,990	)		103,429
Property and equipment, net		570,506			201,320			-			771,826
Investment in subsidiaries		134,430			-			(134,430	)		-
Due from/(to) subsidiaries		79,676			220,055			(299,731	)		-
Other assets		47,471			11,989			-			59,460
Total assets	$	1,060,657		$	448,209		$	(574,151	)	$	934,715
Liabilities & Shareholders’ Equity
Current liabilities:
Accounts payable	$	21,339		$	5,626		$	-		$	26,965
Accrued and other current liabilities		43,125			34,346			-			77,471
Current maturities of long-term debt, including capital leases		(354	)		4,860			-			4,506
Deferred income taxes		3,062			(3,004	)		-			58
Income tax payable		-			139,990			(139,990	)		-
Total current liabilities		67,172			181,818			(139,990	)		109,000
Long-term debt and capital leases, less current maturities		213,204			34,711			-			247,915
Deferred income taxes		(1,867	)		4,091			-			2,224
Due to/(from) subsidiaries		220,055			79,676			(299,731	)		-
Other deferred liabilities		102,762			13,483			-			116,245
Total liabilities		601,326			313,779			(439,721	)		475,384
Shareholders’ equity:
Common stock		621			-			-			621
Capital in excess of par value		80,165			-			-			80,165
Retained earnings		388,518			134,430			(134,430	)		388,518
Accumulated other comprehensive loss		(9,973	)		-			-			(9,973	)
Total shareholders’ equity		459,331			134,430			(134,430	)		459,331
Total liabilities & shareholders’ equity	$	1,060,657		$	448,209		$	(574,151	)	$	934,715

Condensed Consolidating Balance Sheet

As of June 3, 2014

(In thousands)

	Parent			Guarantors		Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	51,012		$	314	$	-		$	51,326
Accounts receivable		1,725			3,136		-			4,861
Inventories		15,114			6,060		-			21,174
Income tax receivable		138,524			-		(136,391	)		2,133
Deferred income taxes		(548	)		3,945		-			3,397
Other current assets		14,610			2,289		-			16,899
Total current assets		220,437			15,744		(136,391	)		99,790
Property and equipment, net		587,783			207,063		-			794,846
Investment in subsidiaries		158,266			-		(158,266	)		-
Due from/(to) subsidiaries		78,612			243,665		(322,277	)		-
Other assets		48,780			13,011		-			61,791
Total assets	$	1,093,878		$	479,483	$	(616,934	)	$	956,427
Liabilities & Shareholders’ Equity
Current liabilities:
Accounts payable	$	20,545		$	5,656	$	-		$	26,201
Accrued and other current liabilities		46,450			36,356		-			82,806
Current maturities of long-term debt, including capital leases		(341	)		5,157					4,816
Income tax payable		-			136,391		(136,391	)		-
Total current liabilities		66,654			183,560		(136,391	)		113,823
Long-term debt and capital leases, less current maturities		213,039			40,836		-			253,875
Deferred income taxes		(445	)		3,945		-			3,500
Due to/(from) subsidiaries		243,665			78,612		(322,277	)		-
Other deferred liabilities		109,756			14,264		-			124,020
Total liabilities		632,669			321,217		(458,668	)		495,218
Shareholders’ equity:
Common stock		614			-		-			614
Capital in excess of par value		76,269			-		-			76,269
Retained earnings		395,226			158,266		(158,266	)		395,226
Accumulated other comprehensive loss		(10,900	)		-		-			(10,900	)
Total shareholders’ equity		461,209			158,266		(158,266	)		461,209
Total liabilities & shareholders’ equity	$	1,093,878		$	479,483	$	(616,934		$	956,427

Condensed Consolidating Statement of Operations and

Comprehensive Loss

For the Thirteen Weeks Ended December 2, 2014

(In thousands)

	Parent			Guarantors			Eliminations			Consolidated
Revenue:
Restaurant sales and operating revenue	$	188,572		$	72,634		$	-		$	261,206
Franchise revenue		38			1,415			-			1,453
		188,610			74,049			-			262,659
Operating costs and expenses:
Cost of goods sold		51,718			19,928			-			71,646
Payroll and related costs		66,348			27,616			-			93,964
Other restaurant operating costs		43,496			16,601			-			60,097
Depreciation		9,344			3,194			-			12,538
Selling, general, and administrative		16,548			10,744			-			27,292
Intercompany selling, general, and administrative allocations		10,473			(10,473	)		-			-
Closures and impairments		1,073			2			-			1,075
Equity in earnings of subsidiaries		(4,326	)		-			4,326			-
Interest expense, net		4,736			1,179			-			5,915
Intercompany interest expense/(income)		2,998			(2,998	)		-			-
		202,408			65,793			4,326			272,527
(Loss)/income before income taxes		(13,798	)		8,256			(4,326	)		(9,868	)
(Benefit)/provision for income taxes		(4,525	)		3,930			-			(595	)
Net loss	$	(9,273	)	$	4,326		$	(4,326	)	$	(9,273	)
Other comprehensive loss:
Pension liability reclassification, net of tax		464			-			-			464
Total comprehensive loss	$	(8,809	)	$	4,326		$	(4,326	)	$	(8,809	)

	Parent			Guarantor			Eliminations			Consolidated
Revenue:
Restaurant sales and operating revenue	$	391,123		$	149,540		$	-		$	540,663
Franchise revenue		184			2,994			-			3,178
		391,307			152,534			-			543,841
Operating costs and expenses:
Cost of goods sold		106,248			40,545			-			146,793
Payroll and related costs		134,390			55,416			-			189,806
Other restaurant operating costs		86,908			32,988			-			119,896
Depreciation		18,731			6,465			-			25,196
Selling, general, and administrative		36,769			21,424			-			58,193
Intercompany selling, general, and administrative allocations		21,615			(21,615	)		-			-
Closures and impairments		2,304			253			-			2,557
Equity in earnings of subsidiaries		(12,107	)		-			12,107			-
Interest expense, net		9,247			2,090			-			11,337
Intercompany interest expense/(income)		5,890			(5,890	)		-			-
		409,995			131,676			12,107			553,778
(Loss)/income before income taxes		(18,688	)		20,858			(12,107	)		(9,937	)
(Benefit)/provision for income taxes		(11,980	)		8,751			-			(3,229	)
Net loss	$	(6,708	)	$	12,107		$	(12,107	)	$	(6,708	)
Other comprehensive loss:
Pension liability reclassification, net of tax		927			-			-			927
Total comprehensive loss	$	(5,781	)	$	12,107		$	(12,107	)	$	(5,781	)

Condensed Consolidating Statement of Operations and

Comprehensive (Loss)/Income

For the Thirteen Weeks Ended December 3, 2013

(In thousands)

	Parent			Guarantors			Eliminations			Consolidated
Revenue:
Restaurant sales and operating revenue	$	198,850		$	75,869		$	-		$	274,719
Franchise revenue		98			1,392			-			1,490
		198,948			77,261			-			276,209
Operating costs and expenses:
Cost of goods sold		56,320			21,349			-			77,669
Payroll and related costs		69,365			28,152			-			97,517
Other restaurant operating costs		46,493			18,796			-			65,289
Depreciation		10,208			3,707			-			13,915
Selling, general, and administrative		25,724			11,307			-			37,031
Intercompany selling, general, and administrative allocations		14,008			(14,008	)		-			-
Closures and impairments		8,058			6,085			-			14,143
Equity in earnings of subsidiaries		104			-			(104	)		-
Interest expense, net		5,171			1,449			-			6,620
Intercompany interest expense/(income)		3,229			(3,229	)		-			-
Loss on extinguishment of debt		672			-			-			672
		239,352			73,608			(104	)		312,856
(Loss)/income from continuing operations before income taxes		(40,404	)		3,653			104			(36,647	)
(Benefit)/provision for income taxes from continuing operations		(5,667	)		3,757			-			(1,910	)
(Loss)/income from continuing operations		(34,737	)		(104	)		104			(34,737	)
Income from discontinued operations, net of tax		354			-			-			354
Net (loss)/income	$	(34,383	)	$	(104	)	$	104		$	(34,383	)
Other comprehensive income:
Pension liability reclassification, net of tax		477			-			-			477
Total comprehensive (loss)/income	$	(33,906	)	$	(104	)	$	104		$	(33,906	)

	Parent			Guarantors			Eliminations			Consolidated
Revenue:
Restaurant sales and operating revenue	$	408,932		$	153,879		$	-		$	562,811
Franchise revenue		119			2,953			-			3,072
		409,051			156,832			-			565,883
Operating costs and expenses:
Cost of goods sold		114,847			42,760			-			157,607
Payroll and related costs		142,891			57,359			-			200,250
Other restaurant operating costs		94,895			37,928			-			132,823
Depreciation		20,572			7,552			-			28,124
Selling, general, and administrative		51,718			22,328			-			74,046
Intercompany selling, general, and administrative allocations		28,771			(28,771	)		-			-
Closures and impairments		13,223			8,953			-			22,176
Equity in earnings of subsidiaries		(4,421	)		-			4,421			-
Interest expense, net		10,231			3,142			-			13,373
Intercompany interest expense/(income)		6,414			(6,414	)		-			-
Loss on extinguishment of debt		1,183			-			-			1,183
		480,324			144,837			4,421			629,582
(Loss)/income from continuing operations before income taxes		(71,273	)		11,995			(4,421	)		(63,699	)
(Benefit)/provision for income taxes from continuing operations		(14,637	)		7,574			-			(7,063	)
(Loss)/income from continuing operations		(56,636	)		4,421			(4,421	)		(56,636	)
Income from discontinued operations, net of tax		11			-			-			11
Net (loss)/income	$	(56,625	)	$	4,421		$	(4,421	)	$	(56,625	)
Other comprehensive income:
Pension liability reclassification, net of tax		955			-			-			955
Total comprehensive (loss)/income	$	(55,670	)	$	4,421		$	(4,421	)	$	(55,670	)

Condensed Consolidating Statement of Cash Flows

For the Twenty-Six Weeks Ended December 2, 2014

(In thousands)

	Parent			Guarantors			Eliminations			Consolidated
Net cash provided by operating activities	$	25,640		$	43,870		$	(59,553	)	$	9,957
Investing activities:
Purchases of property and equipment		(11,002	)		(2,819	)		-			(13,821	)
Proceeds from disposal of assets		4,607			997			-			5,604
Other, net		1,146			135			-			1,281
Net cash used by investing activities		(5,249	)		(1,687	)		-			(6,936	)
Financing activities:
Principal payments on long-term debt		(16	)		(6,250	)		-			(6,266	)
Stock repurchases		(55	)		-			-			(55	)
Payments for debt issuance costs		(75	)		-			-			(75	)
Proceeds from exercise of stock options		197			-			-			197
Excess tax benefits from share-based compensation		22			-			-			22
Intercompany transactions		(23,610	)		(35,943	)		59,553			-
Net cash used by financing activities		(23,537	)		(42,193	)		59,553			(6,177	)
Decrease in cash and cash equivalents		(3,146	)		(10	)		-			(3,156	)
Cash and cash equivalents:
Beginning of year		51,012			314			-			51,326
End of quarter	$	47,866		$	304		$	-		$	48,170

Condensed Consolidating Statement of Cash Flows

For the Twenty-Six Weeks Ended December 3, 2013

(In thousands)

	Parent			Guarantors			Eliminations			Consolidated
Net cash (used)/provided by operating activities	$	(22,630	)	$	36,648		$	(13,590	)	$	428
Investing activities:
Purchases of property and equipment		(12,902	)		(4,795	)		-			(17,697	)
Proceeds from sale-leaseback transactions, net		5,637			-			-			5,637
Proceeds from disposal of assets		7,434			1,023			-			8,457
Other, net		187			-			-			187
Net cash provided/(used) by investing activities		356			(3,772	)		-			(3,416	)
Financing activities:
Principal payments on long-term debt		(12,968	)		(12,838	)		-			(25,806	)
Stock repurchases		(540	)		-			-			(540	)
Payments for debt issuance costs		(1,718	)		-			-			(1,718	)
Proceeds from exercise of stock options		1,480			-			-			1,480
Excess tax benefits from share-based compensation		283			-			-			283
Intercompany transactions		6,415			(20,005	)		13,590			-
Net cash used by financing activities		(7,048	)		(32,843	)		13,590			(26,301	)
(Decrease)/increase in cash and cash equivalents		(29,322	)		33			-			(29,289	)
Cash and cash equivalents:
Beginning of year		52,635			272			-			52,907
End of quarter	$	23,313		$	305		$	-		$	23,618

XML

Note G - Property, Equipment, Assets Held for Sale, Operating Leases, and Sale-leaseback Transactions (Tables)

6 Months Ended

Dec. 02, 2014

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment [Table Text Block]

	December 2, 2014		June 3, 2014
Land	$	212,282	$	214,277
Buildings		426,800		430,988
Improvements		364,520		365,599
Restaurant equipment		249,436		248,852
Other equipment		86,658		84,876
Construction in progress and other*		17,998		22,246
		1,357,694		1,366,838
Less accumulated depreciation		585,868		571,992
	$	771,826	$	794,846

XML

Note J - Employee Post-employment Benefits (Details) (USD $)	6 Months Ended
	Dec. 02, 2014	Jun. 03, 2014
Note J - Employee Post-employment Benefits (Details) [Line Items]
Defined Benefit Pension Plans	3
Defined contribution plans	2
Severance Costs	$ 934,000
Employee-related Liabilities, Current	21,586,000	22,637,000
Employee Severance [Member]
Note J - Employee Post-employment Benefits (Details) [Line Items]
Severance Costs	300,000
Employee-related Liabilities, Current	300,000
Retirement Plan [Member]
Note J - Employee Post-employment Benefits (Details) [Line Items]
Defined Benefit Plans, Estimated Future Employer Contributions in Current Fiscal Year	300,000
Pension Plan [Member]
Note J - Employee Post-employment Benefits (Details) [Line Items]
Defined Benefit Pension Plan Liabilities, Current	3,300,000	3,300,000
Defined Benefit Pension Plan, Liabilities, Noncurrent	$ 32,300,000	$ 32,500,000

XML

Note F - Inventories (Details) (USD $) In Thousands, unless otherwise specified	Dec. 02, 2014	Jun. 03, 2014
Inventory Disclosure [Abstract]
Retail Related Inventory, Merchandise	$ 18,893	$ 12,924

XML

Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Dec. 02, 2014	Dec. 03, 2013
Operating activities:
Net loss	$ (6,708)	$ (56,625)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation	25,196	28,124
Amortization of intangibles	1,162	1,370
Deferred income taxes	(2,863)	(259)
Loss on impairments, including disposition of assets	3,359	17,746
Loss on extinguishment of debt		1,183
Share-based compensation expense	3,720	4,049
Excess tax benefits from share-based compensation	(22)	(283)
Lease reserve adjustments	761	4,205
Deferred escalating minimum rent	1,298	1,397
Other, net	793	1,847
Changes in operating assets and liabilities:
Receivables	(842)	(937)
Inventories	(5,546)	3,457
Income taxes	(1,041)	(3,443)
Prepaid and other assets	(737)	(1,187)
Accounts payable, accrued and other liabilities	(8,573)	(216)
Net cash provided by operating activities	9,957	428
Investing activities:
Purchases of property and equipment	(13,821)	(17,697)
Proceeds from sale-leaseback transactions, net		5,637
Proceeds from disposal of assets	5,604	8,457
Insurance proceeds from property claims	135	218
Reductions in Deferred Compensation Plan assets	392	115
Other, net	754	(146)
Net cash used by investing activities	(6,936)	(3,416)
Financing activities:
Principal payments on long-term debt and capital leases	(6,266)	(25,806)
Stock repurchases	(55)	(540)
Payments for debt issuance costs	(75)	(1,718)
Proceeds from exercise of stock options	197	1,480
Excess tax benefits from share-based compensation	22	283
Net cash used by financing activities	(6,177)	(26,301)
Decrease in cash and cash equivalents	(3,156)	(29,289)
Cash and cash equivalents:
Beginning of year	51,326	52,907
End of quarter	48,170	23,618
Cash paid for:
Interest, net of amount capitalized	10,358	11,813
Income taxes, net	1,402	477
Significant non-cash investing and financing activities:
Retirement of fully depreciated assets	8,243	11,292
Reclassification of properties to assets held for sale	4,746	3,816
Property and equipment purchases included in accounts payable		$ 1,210

XML

Note E - Accounts Receivable

6 Months Ended

Dec. 02, 2014

Receivables [Abstract]

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

NOTE E – ACCOUNTS RECEIVABLE

Accounts receivable – current consist of the following (in thousands):

	December 2, 2014		June 3, 2014
Rebates receivable	$	706	$	930
Amounts due from franchisees		1,725		1,281
Third-party gift card sales		1,555		1,636
Other receivables		1,645		1,014
	$	5,631	$	4,861

We negotiate purchase arrangements, including price terms, with designated and approved suppliers on behalf of us and our franchise system. We receive various volume discounts and rebates based on purchases for our Company-owned restaurants from numerous suppliers.

Amounts due from franchisees consist of royalties, license and other miscellaneous fees, a substantial portion of which represents current and recently-invoiced billings.

As of December 2, 2014 and June 3, 2014, Other receivables consisted primarily of amounts due from our distributor ($0.8 million and $0.4 million, respectively), sales and other miscellaneous tax refunds ($0.2 million for each period), and, as of December 2, 2014, settlement proceeds from a lawsuit in which we were a class member ($0.2 million).

XML

Note M - Segment Reporting (Details) - Financial Results by Reportable Segment (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Dec. 02, 2014	Dec. 03, 2013	Dec. 02, 2014	Dec. 03, 2013
Revenues:
Revenues	$ 262,659	$ 276,209	$ 543,841	$ 565,883
Segment profit/(loss):
Segment profit	19,200	(913)	49,365	6,484
Depreciation and amortization:
Depreciation and amortization	13,120	14,598	26,358	29,472
Capital expenditures:
Capital expenditures			13,821	17,697
Ruby Tuesday [Member]
Revenues:
Revenues	257,814	270,741	533,857	554,763
Segment profit/(loss):
Segment profit	20,504	870	50,845	10,721
Depreciation and amortization:
Depreciation and amortization	12,153	13,456	24,416	27,248
Capital expenditures:
Capital expenditures			12,963	14,114
Lime Fresh [Member]
Revenues:
Revenues	4,845	5,468	9,984	11,120
Segment profit/(loss):
Segment profit	(1,304)	(1,783)	(1,480)	(4,237)
Depreciation and amortization:
Depreciation and amortization	437	545	860	1,044
Capital expenditures:
Capital expenditures			87	2,699
Support Center and Other [Member]
Depreciation and amortization:
Depreciation and amortization	530	597	1,082	1,180
Capital expenditures:
Capital expenditures			$ 771	$ 884

XML

Note H - Long-term Debt and Capital Leases (Tables)

6 Months Ended

Dec. 02, 2014

Disclosure Text Block Supplement [Abstract]

Schedule of Long-term Debt Instruments [Table Text Block]

	December 2, 2014			June 3, 2014
Senior unsecured notes	$	215,000		$	215,000
Unamortized discount		(2,336	)		(2,503	)
Senior unsecured notes less unamortized discount		212,664			212,497
Revolving credit facility		-			-
Mortgage loan obligations		39,002			45,252
Unamortized premium on mortgage loan obligations		570			741
Capital lease obligations		185			201
		252,421			258,691
Less current maturities		4,506			4,816
	$	247,915		$	253,875

XML

Note D - Discontinued Operations (Details) - Financial Results of Discontinued Operations (USD $) In Thousands, unless otherwise specified	3 Months Ended	6 Months Ended
	Dec. 03, 2013	Dec. 03, 2013
Financial Results of Discontinued Operations [Abstract]
Gain/(loss) before income taxes	$ 453	$ (75)
Provision/(benefit) for income taxes	99	(86)
Income from discontinued operations	$ 354	$ 11

XML

Note O – Fair Value Measurements

6 Months Ended

Dec. 02, 2014

Fair Value Disclosures [Abstract]

Fair Value Disclosures [Text Block]

NOTE O – FAIR VALUE MEASUREMENTS

The following table presents the fair value of financial assets and liabilities measured on a recurring basis and the level within the fair value hierarchy in which the measurements fall (in thousands):

	Level		December 2, 2014			June 3, 2014
Deferred compensation plan: other investments – Assets		1	$	8,732		$	8,930
Deferred compensation plan: other investments – Liabilities		1		(8,732	)		(8,930	)
Deferred compensation plan: RTI common stock – Equity		1		591			622
Deferred compensation plan: RTI common stock – Equity		1		(591	)		(622	)
Total			$	-		$	-

There were no transfers among levels within the fair value hierarchy during the 26 weeks ended December 2, 2014.

The Ruby Tuesday, Inc. 2005 Deferred Compensation Plan (the “Deferred Compensation Plan”) and the Ruby Tuesday, Inc. Restated Deferred Compensation Plan (the “Predecessor Plan”) are unfunded, non-qualified deferred compensation plans for eligible employees. Assets earmarked to pay benefits under the Deferred Compensation Plan and Predecessor Plan are held by a rabbi trust. We report the accounts of the rabbi trust in our Condensed Consolidated Financial Statements. The investments held by these plans are reported at fair value based on third-party broker statements. The realized and unrealized holding gains and losses related to these investments, as well as the offsetting compensation expense, is recorded in Selling, general and administrative expense in the Condensed Consolidated Financial Statements.

The following table presents the fair value of assets measured on a non-recurring basis during the 13 weeks ended December 2, 2014 and the level within the fair value hierarchy in which the measurements fall (in thousands):

	Fair Value Measurements
	Level		December 2, 2014
Long-lived assets held for sale		2	$	1,770
Long-lived assets held for use		2		67
Total			$	1,837

The following table presents the losses recognized during the 13 and 26 weeks ended December 2, 2014 and December 3, 2013 resulting from non-recurring fair value measurements. The losses associated with continuing operations are included in Closures and impairments, net and the losses associated with discontinued operations are included in Income from discontinued operations, net of tax in our Condensed Consolidated Statements of Operations and Comprehensive Loss (in thousands):

	Thirteen weeks ended				Twenty-six weeks ended
	December 2, 2014		December 3, 2013		December 2, 2014		December 3, 2013
Included within continuing operations
Long-lived assets held for sale	$	203	$	315	$	802	$	584
Long-lived assets held for use		1,013		12,003		1,470		16,664
	$	1,216	$	12,318	$	2,272	$	17,248
Included within discontinued operations			$	-			$	153

Long-lived assets held for sale are valued using Level 2 inputs, primarily representing information obtained through broker listings and sales agreements. Costs to market and/or sell the assets are factored into the estimates of fair value for those assets included in Assets held for sale on our Condensed Consolidated Balance Sheets.

We review our long-lived assets (primarily property, equipment, and, as appropriate, reacquired franchise rights and favorable leases) related to each restaurant to be held and used in the business, whenever events or changes in circumstances indicate that the carrying amount of the long-lived asset may not be recoverable.

Long-lived assets held for use presented in the table above include restaurants or groups of restaurants that we have impaired. From time to time, this will also include closed restaurants or surplus sites that do not meet the held for sale criteria that we have offered for sale at a price less than carrying value.

The Level 2 fair values of our long-lived assets held for use are based on broker estimates of the value of the land, building, leasehold improvements, and other residual assets.

Our financial instruments at December 2, 2014 and June 3, 2014 consisted of cash and cash equivalents, accounts receivable and payable, long-term debt, and letters of credit. The fair value of cash and cash equivalents and accounts receivable and payable approximated carrying value due to the short-term nature of these instruments. The carrying value and fair value of our other financial instruments not measured at fair value on a recurring basis, however subject to fair value disclosures, are as follows (in thousands):

	December 2, 2014				June 3, 2014
	Carrying Value		Fair Value (Level 2)		Carrying Value		Fair Value (Level 2)
Long-term debt	$	252,236	$	257,278	$	258,490	$	262,985

We estimated the fair value of debt using market quotes and calculations based on market rates.