Employee Post-Employment Benefits

Pension and Postretirement Medical and Life Benefits

We sponsor

three

defined benefit pension plans for certain 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 could 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 all required contributions for fiscal year

2017

have been made.

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

2001,

the Management Retirement Plan was amended so that no additional benefits would accrue and no new participants could enter the plan after that date. In

December

2015,

the Executive Supplemental Pension Plan was similarly amended effective as of

January

2016

for current participants, and as of

January

2018

for

two

specified potential participants, who are currently not named executive officers.

Included in our Condensed Consolidated Balance Sheets as of

February

28,

2017

and

May

31,

2016

are amounts within Accrued liabilities: Payroll and related costs of

$3.9

million and

$2.5

million, respectively, and amounts within Other deferred liabilities of

$33.1

million and

$35.7

million, respectively, relating to our

three

defined benefit pension plans.

Postretirement Medical and Life Benefits

Our Postretirement Medical and Life Benefits plans provide medical benefits to substantially all retired employees 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

1990.

Included in our Condensed Consolidated Balance Sheets as of

February

28,

2017

and

May

31,

2016

are amounts within Accrued liabilities: Payroll and related costs of

$0.1

million as of both dates and amounts within Other deferred liabilities of

$1.0

million as of both dates relating to our postretirement medical and life benefits.

The following tables detail the components of net periodic benefit cost 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, which is recorded as a component of General and administrative expenses in our Condensed Consolidated Statements of Operations and Comprehensive Loss (in thousands):

	Pension Plans
	Thirteen Weeks Ended					Thirty-Nine Weeks Ended
	February 28, 2017		March 1, 2016			February 28, 2017			March 1, 2016
Service cost	$	5	$	33		$	18		$	305
Interest cost		420		495			1,260			1,535
Expected return on plan assets		(91)		(103	)		(273	)		(308	)
Recognized actuarial loss		339		730			1,014			1,831
Curtailment expense		–		1			–			1
Net periodic benefit cost	$	673	$	1,156		$	2,019		$	3,364

	Postretirement Medical and Life Benefits
	Thirteen Weeks Ended				Thirty-Nine Weeks Ended
	February 28, 2017		March 1, 2016		February 28, 2017		March 1, 2016
Service cost	$	2	$	1	$	3	$	3
Interest cost		9		12		27		36
Recognized actuarial loss		17		32		51		97
Net periodic benefit cost	$	28	$	45	$	81	$	136

reclassified recognized actuarial losses of

$0.4

million and

$1.1

million during the

and

weeks ended

February

28,

2017,

respectively, and

$0.8

million and

$1.9

million during the

and

weeks ended

March

2016,

respectively, out of accumulated other comprehensive loss and into pension expense, which is included in General and administrative expenses within our Condensed Consolidated Statements of Operations and Comprehensive Loss.

We also sponsor

two

defined contribution retirement savings plans. Information regarding these plans is included in our Annual Report on Form

-K for the fiscal year ended

May

31,

2016.

Restaurant Closures and

Corporate Restructuring

e closed

102

Company-owned restaurants during the

weeks ended

February

28,

2017,

of which were closed in connection with an asset rationalization plan as previously discussed in Note

to the Condensed Consolidated Financial Statements.

September

13,

2016,

James J. Buettgen resigned as Chairman of the Board of Directors, President, and Chief Executive Officer of the Company. On the same date, F. Lane Cardwell, Jr., a member of the Company

’s Board of Directors since

October

2012

and an executive with approximately

years of leadership experience in the restaurant industry, was appointed Interim President and Chief Executive Officer, Stephen I. Sadove, the Company’s then Lead Director, was appointed Chairman of the Board and Sue Briley was appointed Chief Financial Officer. Ms. Briley had been serving as Interim Chief Financial Officer since

June

2016.

Included in the employee severance and unused vacation accruals in the table

below are

$3.1

million in severance accruals and other benefits in connection with Mr. Buettgen’s resignation.

s of

February

28,

2017

and

May

31,

2016,

we had

accrued liability and

$0.3

million, respectively, representing unpaid obligations related to employee severance and vacation accruals, were included within Accrued liabilities: Payroll and related costs in our Condensed Consolidated Balance Sheet. Costs of

$3.3

million and

$1.6

million reflected in the table below related to employee severance and unused vacation accruals are included within General and administrative expenses and Closures and impairments, net, respectively, in our Condensed Consolidated Statements of Operations and Comprehensive Loss for the

weeks ended

February

28,

2017.

A roll forward of our obligations in connection with employee separations is as follows (in thousands):

Balance at May 31, 2016	$	317
Employee severance and unused vacation accruals		4,890
Cash payments		(5,207	)
Balance at February 28, 2017	$	–