8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

__________________

FORM 8-K

__________________

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES

EXCHANGE ACT OF 1934

Date of Report (Date of Earliest Event Reported):  July 21, 2010

Ruby Tuesday, Inc.

(Exact Name of Registrant as Specified in Charter)

Georgia	1-12454	63-0475239
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

150 West Church Avenue

Maryville, Tennessee 37801

(Address of Principal Executive Offices)

(865) 379-5700

(Registrant’s Telephone Number, Including Area Code)

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions  (See General Instructions A.2.below):

o  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 5.02 COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS.

Form of Awards

On July 21, 2010, the Executive Compensation and Human Resources Committee (the “Committee”) of the Board of Directors adopted new forms of award for the Chief Executive Officer (“CEO”) for non-qualified stock option awards and restricted stock awards with time-based vesting under the 2003 Stock Incentive Plan.  Copies of the forms of award are attached hereto as Exhibits 10.1 and 10.2.

Adoption of 2011 Performance Goals under the Annual Cash Incentive Compensation Plans

On July 21, 2010, the Committee set the performance goals for annual cash incentives for fiscal year 2011 for the CEO under the 2006 Executive Incentive Compensation Plan (the “2006 Plan”) and the other executive officers under the existing Cash Bonus Plan, which is designed to utilize the same performance measures as the 2006 Plan.  Pursuant to the terms of the 2006 Plan for the CEO, which is filed as an exhibit with the Company’s appropriate periodic filings under the Securities and Exchange Act of 1934, the Committee approved annual performance goals for the CEO based on growth in earnings per share (“EPS”).  The Committee also approved performance goals in connection with the Cash Bonus Plan for the Named Executive Officers and other executive Officers of the Company for Fiscal Year 2011, which goals were also based on EPS growth.

The cash bonus potential for the CEO is 50% of base salary based on achievement of minimum performance objectives, 100% of base salary upon achievement of target performance objectives, and 200% of base salary based on achievement of maximum performance objectives.

For the Executive Vice President – Operations, the cash bonus potential is 40% of base salary based on achievement of minimum performance objectives, 80% of base salary based on achievement of target performance objectives, and 160% of base salary based on achievement of maximum performance.  The cash bonus potential for the Senior Vice President, Chief Financial Officer and the Senior Vice President, Chief Technology Officer is 30% of base salary upon achievement of minimum performance objectives, 60% of base salary upon achievement of target performance objectives, and 120% of base salary upon achievement of maximum performance objectives.  For the remaining Named Executive Officer, as defined in the Company’s proxy statement, and other executive officers of the Company, the cash bonus potential is 25% of base salary upon achievement of minimum performance objectives, 50% of base salary for achievement of target performance objectives, and 100% of base salary based on achievement of maximum performance goals.

Adoption of Executive Severance Plan

On July 22, 2010, the Board approved the adoption of the Executive Severance Plan (the “Severance Plan”).  The Severance Plan provides for a payment of two times base salary for

certain executive officers in the event that (a) the Company eliminates the executive’s position; (b) the Company announces a corporate downsizing or reduction in force; (c) the executive voluntarily terminates his/her employment because of a material reduction in base salary or bonus potential; or (d) the Company and executive mutually agree to terminate the employment.  A copy of the Severance Plan is attached hereto as Exhibit 10.3.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.

(d)   Exhibits.

EXHIBIT	DESCRIPTION
10.1	Form of Non-qualified Stock Option award (for Chief Executive Officer)
10.2	Form of Service Stock Award (for Chief Executive Officer)
10.3	Ruby Tuesday, Inc. Severance Pay Plan

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 hereunto duly authorized.

Ruby Tuesday, Inc.

(Registrant)

By: /s/ Marguerite N. Duffy                                                  

Marguerite N. Duffy

Senior Vice President and

Chief Financial Officer

Date: July 27, 2010

EX-10.1

RUBY TUESDAY, INC.

NON-QUALIFIED STOCK OPTION AWARD

THIS AWARD is made as of the Grant Date, by RUBY TUESDAY, INC. (the “Company”) to ________ (the “Optionee”).  Upon and subject to the Terms and Conditions attached hereto and incorporated herein by reference, the Company hereby awards as of the Grant Date to Optionee a non-qualified stock option (the “Option”), as described below, to purchase the Option Shares.

A.           Grant Date:  _______.

B.           Type of Option:  Non-Qualified Stock Option.

C.           Plan (under which Option is granted):  Ruby Tuesday, Inc. 2003 Stock Incentive Plan pursuant to the Executive Stock Option Program.

D.           Option Shares:  All or any part of _______ shares of the Company’s common stock (the “Common Stock”), subject to adjustment as provided in the attached Terms and Conditions.

E.           Exercise Price:  $____ per share.

F.           Option Period:  The Option may be exercised as to the Vested Option Shares during the Option Period which commences on the Grant Date and ends on the seventh (7th) anniversary of the Grant Date or on an earlier date as provided in the attached Terms and Conditions.  Note that other restrictions to exercising the Option described in the attached Terms and Conditions may apply.

G.           Vested Option Shares:  The Option Shares shall become Vested Option Shares, as and to the extent indicated below, only if and to the extent the Service Condition is satisfied.  The Service Condition is satisfied only if the Optionee provides Continuous Service to the Company and/or any affiliate for the period beginning with the Grant Date through the date described in the following Vesting Schedule:

Continuous Service Date	Percentage of Net Restricted Shares which are Vested Shares
Prior to _____, 2011	0%
___, 2011 through _____, 2012	331/3%
_____, 2012 through _____, 2013	662/3%
_____, 2013 and after	100%

The Optionee shall be determined to have provided “Continuous Service” through the date specified in the Vesting Schedule above if the Optionee continues in the employ of the Company and/or any affiliate without experiencing a Termination of Employment, regardless of the reason.  All or a portion of the Option Shares may become Vested Option Shares on an earlier date as provided in the attached Terms and Conditions.

Any portion of the Option Shares which have not become Vested Option Shares in accordance with this Paragraph G or Section 3 of the Additional Terms and Conditions at the time of Optionee’s Termination of Employment shall be forfeited.

IN WITNESS WHEREOF, the Company has executed and sealed this Award as of the Grant Date set forth above.

RUBY TUESDAY, INC.

By:                                                             

Title:                    

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TERMS AND CONDITIONS TO THE

RUBY TUESDAY, INC.

NON-QUALIFIED STOCK OPTION AWARD

1.           Exercise of Option.  Subject to the provisions provided herein or in the Award made pursuant to the Ruby Tuesday, Inc. 2003 Stock Incentive Plan and to the Executive Stock Option Program, the Option may be exercised with respect to all or any portion of the Vested Option Shares at any time during the Option Period by the delivery to the Company, at its principal place of business, of:

(a)           a written notice of exercise in substantially the form attached hereto as Exhibit 1, which shall be actually delivered to the Company prior to the date upon which Optionee desires to exercise all or any portion of the Option;

(b)           payment to the Company of the Exercise Price multiplied by the number of shares being purchased (the “Purchase Price”) as provided in Section 5 and

(c) payment of the tax withholding liability as provided in Section 6.

Upon acceptance of such notice and receipt of payment in full of the Purchase Price and the withholding liability, the Company shall cause to be issued a certificate representing the Option Shares purchased.

2.            Adjustment of Option Shares.  If Optionee is demoted to a job category with respect to which either (a) no option or (b) an option subject to fewer option shares would have been granted to the Optionee pursuant to the Executive Stock Option Program had the Optionee been in that job category on the Grant Date, then the number of Option Shares as to which the Option has not been exercised as of the date of the demotion shall be adjusted as follows:  If the Optionee would not have been granted an option in his new job category on the Grant Date, the number of remaining Option Shares shall be reduced to zero.  If the Optionee would have been granted an option for fewer option shares on the Grant Date, the remaining Option Shares, if any, shall equal the number of shares that would have been granted to the Optionee in his new job category on the Grant Date less the number of Option Shares previously purchased by the Optionee under the Option before his demotion.

3.           Vested Option Shares.  Notwithstanding Paragraph G of the Award, the Service Condition will be deemed satisfied as to all or a portion of the Option Shares if the Optionee provides Continuous Service to the Company and/or any affiliate following the Grant Date through the date of any of the earlier events listed below:

(a)           (i) In the event of a Termination of Employment due to Disability (as defined in the Employment Agreement) or death, (ii) upon attainment of age 65 or upon retirement after satisfaction of the Rule of 90 under the Ruby Tuesday, Inc. Executive Supplemental Pension Plan, or (iii) in the event of a Termination of Employment by the Company or an affiliate without Cause (as defined in the Employment Agreement), all Option Shares shall become Vested Option Shares on the date of such event.

(b)          In the event of a Change in Control (as defined in the Employment Agreement), all Option Shares shall become Vested Option Shares on the date specified by the Committee prior to a Change in Control, unless the Committee elects to cash out the Option in any manner consistent with Section 3.1(d) of the Plan.

4.           Early Expiration of Option Period.  The Option Period commences on the Grant Date and with respect to Vested Option Shares generally ends on the seventh anniversary of the Grant Date.  However, with respect to Vested Option Shares, the Option Period shall expire on an earlier date as follows:

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(a)           in the event of Optionee’s involuntary Termination of Employment without Cause (as defined in the Employment Agreement) (i) the Option Period shall expire ninety (90) days following that Termination of Employment if the vesting of the Option is solely attributed to such Termination of Employment; and (ii) the Option Period shall expire one (1) year following that Termination of Employment if the vesting of the Option occurred prior to such Termination of Employment; and

(b)           in the event of Optionee’s involuntary Termination of Employment with Cause (as defined in the Employment Agreement), the Option Period shall expire fifteen (15) days following that Termination of Employment.

In the event of Optionee’s voluntary Termination of Employment or Optionee’s involuntary Termination of Employment for Cause (as defined in the Employment Agreement) in either case before the Option Shares become Vested Option Shares, this Option shall expire immediately upon such event without becoming exercisable.

5.           Purchase Price.  Payment of the Purchase Price for all Option Shares purchased pursuant to the exercise of an Option shall be made in cash or, alternatively, as follows:

(a)           by delivery to the Company of a number of shares of Common Stock which have been owned by the Optionee for at least six (6) months prior to the date of the Option’s exercise, having a Fair Market Value, as determined under the Plan, on the date of exercise either equal to the Purchase Price or in combination with cash to equal the Purchase Price; or

(b)           by receipt of the Purchase Price in cash from a broker, dealer or other “creditor” as defined by Regulation T issued by the Board of Governors of the Federal Reserve System following delivery by the Optionee to the Committee of instructions in a form acceptable to the Committee regarding delivery to such broker, dealer or other creditor of that number of Option Shares with respect to which the Option is exercised; provided, however, any such cashless exercise must be effected in a manner consistent with the restrictions of Section 13(k) of the Securities Exchange Act of 1934 (Section 402 of the Sarbanes-Oxley Act of 2002).

6.           Withholding.  The Optionee must pay to the Company the full amount of the federal, state and local tax withholding obligation arising from the exercise of the Option.

(a) The tax withholding liability may be paid in cash, or, alternatively, as follows:

              (i)           by the Optionee making a Withholding Election on or prior to the date on which the amount of tax required to be withheld is determined (the “Tax Date”) to reduce the number of Option Shares to be issued upon exercise by the whole number of shares of Common Stock having a Fair Market Value equal to the amount of withholding tax;

              (ii)          by the Optionee making a Withholding Election and delivering to the Company before the Tax Date a whole number of shares of Common Stock that the Optionee has owned for at least six (6) months having a Fair Market Value equal to the amount of withholding tax; or

              (iii)        by the Optionee making a Withholding Election prior to the Tax Date to have a broker, dealer or other “creditor” (as defined by Regulation T issued by the Board of Governors of the Federal Reserve System) deliver the amount of tax withholding due in cash to the Company after the Optionee has delivered to the Committee instructions acceptable to

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the Committee regarding the delivery of the number of Option Shares being exercised to such broker, dealer or other creditor provided, however, that any such delivery must be effected in a manner consistent with the restrictions of Section 13(k) of the Securities Exchange Act of 1934 (Section 402 of the Sarbanes-Oxley Act of 2002).

(b) A Withholding Election must be made substantially in the form attached as Exhibit 2 and may be made only if:

             (i)             the Optionee delivers to the Company a completed written Withholding Election no later than on the Tax Date;

             (ii)            the Withholding Election is irrevocable and satisfies the requirements of the exemption provided under Rule 16b-3 of the Securities Exchange Act of 1934; and

            (iii)            the Optionee delivers to the Company the Withholding Election on a date determined by the Committee (i.e., at least six (6) months prior to the Tax Date or prior to the Tax Date and in any ten-day period beginning on the third day following the release of the Company’s quarterly or annual summary statement of sales and earnings), if the Optionee is considered by the Committee to be subject to Section 16 of the Securities Exchange Act of 1934.

The Committee may give no effect to any Withholding Election.

7.           Rights as Shareholder.  Until the stock certificates reflecting the Option Shares accruing to the Optionee upon exercise of the Option are issued to the Optionee, the Optionee shall have no rights as a shareholder with respect to such Option Shares.  The Company shall make no adjustment for any dividends or distributions or other rights on or with respect to Option Shares for which the record date is prior to the issuance of that stock certificate, except as the Plan or this Award otherwise provides.

8.           Restriction on Transfer of Option and of Option Shares.  The Option evidenced hereby is nontransferable other than by will or the laws of descent and distribution, and shall be exercisable during the lifetime of the Optionee only by the Optionee (or in the event of his Disability, by his personal representative) and after his death, only by his legatee or the executor of his estate.

9. Changes in Capitalization; Merger; Reorganization.

              (a)          The number of Option Shares and the Exercise Price shall be proportionately adjusted for any increase or decrease in the number of issued shares of Common Stock resulting from a subdivision or combination of shares or the payment of a stock dividend in shares of Common Stock to holders of outstanding shares of Common Stock or any other increase or decrease in the number of shares of Common Stock outstanding effected without receipt of consideration by the Company.

             (b)           In the event of a merger, consolidation, extraordinary dividend (including a spin-off), or other reorganization involving the Company or a tender offer for shares of Common Stock, whether or not such an event constitutes a Change in Control, the Committee may, in its sole discretion, adjust the number and class of securities subject to the Option, with a corresponding adjustment made in the Exercise Price; substitute a new option to replace the Option; or accelerate the termination of the Option Period to a date prior to the occurrence of any event specified in Paragraph F of the Award or Section 4 of the Additional Terms and Conditions.

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            (c)           The existence of the Plan and this Award shall not affect in any way the right or power of the Company to make or authorize any adjustment, reclassification, reorganization or other change in its capital or business structure, any merger or consolidation of the Company, any issue of debt or equity securities having preferences or priorities as to the Common Stock or the rights thereof, the dissolution or liquidation of the Company, any sale or transfer of all or any part of its business or assets, or any other corporate act or proceeding.

10.           Special Limitation on Exercise.  Any exercise of the Option is subject to the condition that if at any time the Committee, in its discretion, shall determine that the listing, registration or qualification of the shares covered by the Option upon any securities exchange or under any state or federal law is necessary or desirable as a condition of or in connection with the delivery of shares thereunder, the delivery of any or all shares pursuant to the Option may be withheld unless and until such listing, registration or qualification shall have been effected.  The Optionee shall deliver to the Company, prior to the exercise of the Option, such information, representations and warranties as the Company may reasonably request in order for the Company to be able to satisfy itself that the Option Shares are being acquired in accordance with the terms of an applicable exemption from the securities registration requirements of applicable federal and state securities laws.

11.           Legend on Stock Certificates.  Certificates evidencing the Option Shares, to the extent appropriate at the time, shall have noted conspicuously on the certificates a legend intended to give all persons full notice of the existence of the conditions, restrictions, rights and obligations set forth in this Award and in the Plan.

12.           Governing Laws.  This Award shall be construed, administered and enforced according to the laws of the State of Georgia; provided, however, no option may be exercised except, in the reasonable judgment of the Board of Directors, in compliance with exemptions under applicable state securities laws of the state in which the Optionee resides, and/or any other applicable securities laws.

13.           Successors.  This Award shall be binding upon and inure to the benefit of the heirs, legal representatives, successors and permitted assigns of the parties.

14.           Notice.  Except as otherwise specified herein, all notices and other communications under this Award shall be in writing and shall be deemed to have been given if personally delivered or if sent by registered or certified United States mail, return receipt requested, postage prepaid, addressed to the proposed recipient at the last known address of the recipient.  Any party may designate any other address to which notices shall be sent by giving notice of the address to the other parties in the same manner as provided herein.

15.           Severability.  In the event that any one or more of the provisions or portion thereof contained in this Award shall for any reason be held to be invalid, illegal or unenforceable in any respect, the same shall not invalidate or otherwise affect any other provisions of this Award, and this Award shall be construed as if the invalid, illegal or unenforceable provision or portion thereof had never been contained herein.

16.           Entire Agreement.  Subject to the terms and conditions of the Plan, this Award expresses the entire understanding and agreement of the parties.

17.           Violation.  Any transfer, pledge, sale, assignment, or hypothecation of the Option or any portion thereof shall be a violation of the terms of this Award and shall be void and without effect.

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18.           Headings and Capitalized Terms.  Section headings used herein are for convenience of reference only and shall not be considered in construing this Award.  Capitalized terms used, but not defined, herein shall be given the meaning ascribed to them in the Plan.

19.           Specific Performance.  In the event of any actual or threatened default in, or breach of, any of the terms, conditions and provisions of this Award, the party or parties who are thereby aggrieved shall have the right to specific performance and injunction in addition to any and all other rights and remedies at law or in equity, and all such rights and remedies shall be cumulative.

20.           No Right to Continued Employment.  Neither the establishment of the Plan nor the award of Option Shares hereunder shall be construed as giving the Optionee the right to continued employment.

21.           Special Definitions.  For purposes of this Award, the capitalized term “Employment Agreement” shall mean that certain employment agreement between the Company and the Optionee dated as of June 19, 1999, as amended by Amendment No. 1 to Employment Agreement, dated as of January 9, 2003, Amendment No. 2 to Employment Agreement, dated as of July 18, 2008, and Amendment No. 3 to Employment Agreement, dated as of July 29, 2008, as the same may be amended or superseded hereafter.

22.           Exclusivity.  For a period of three (3) years from the Grant Date, Employee agrees that he shall not perform services of any type for the following competitors:  Applebees, Chilis, T.G.I. Friday’s, O’Charley’s, Red Robin Gourmet Burgers, Olive Garden, and Outback Steakhouse unless Employee obtains the Company’s prior written consent.Employee and Company agree that the damages which Company will suffer in the event of Employee’s breach of the foregoing covenant are impossible to quantify and determine.  Therefore, the parties agree that in the event of each such breach, Company shall have all rights and remedies available to it by law, including by way of example and not of limitation, a right of injunction and to recoup from Employee the value of the Award.

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EXHIBIT 1

NOTICE OF EXERCISE OF

STOCK OPTION TO PURCHASE

COMMON STOCK OF

RUBY TUESDAY, INC.

Name  

Address

 ________________________________     

 Date    

Ruby Tuesday, Inc.

150 West Church Avenue

Maryville, Tennessee  37801

Attention:  Chief Financial Officer

Re:           Exercise of Non-Qualified Stock Option

Gentlemen:

Subject to acceptance hereof by Ruby Tuesday, Inc. (the “Company”) pursuant to the provisions of the Ruby Tuesday, Inc. 2003 Stock Incentive Plan (the “Plan”), I hereby give notice of my election to exercise options granted to me to purchase ______________ shares of Common Stock of the Company under the Non-Qualified Stock Option Award (the “Award”) dated as of ____________.  The purchase shall take place as of __________, 20___ (the “Exercise Date”).

On or before the Exercise Date, I will pay the applicable purchase price as follows:

[  ] by delivery of cash or a certified check for $_____ payable to the order of Ruby Tuesday, Inc.

[  ] by delivery of a certified check for $___________ representing a portion of the purchase price with the balance to consist of shares of Common Stock that I have owned for at least six months and that are represented by a stock certificate I will surrender to the Company with my endorsement.  If the number of shares of Common Stock represented by such stock certificate exceed the number to be applied against the purchase price, I understand that a new stock certificate will be issued to me reflecting the excess number of shares.

[  ] by delivery of a stock certificate representing shares of Common Stock that I have owned for at least six months which I will surrender to the Company with my endorsement as payment of the purchase price.  If the number of shares of Common Stock represented by such certificate exceed the number to be applied against the purchase price, I understand that a new certificate will be issued to me reflecting the excess number of shares.

[  ] by delivery of the purchase price by ________________, a broker, dealer or other “creditor” as defined by Regulation T issued by the Board of Governors of the Federal Reserve System. I hereby authorize the Company to issue a stock certificate for the number of shares indicated above in the name of said broker, dealer or other creditor or its nominee pursuant to instructions received by the Company and to deliver said stock certificate directly to that broker, dealer or other creditor (or to such other party specified in the instructions received by the Company from the broker, dealer or other creditor) upon receipt of the purchase price.

EXHIBIT 1 to Non-Qualified Stock Option Award - Page 1

The required federal, state and local income tax withholding obligations on the exercise of the Award shall also be paid on or before the Exercise Date.

As soon as the stock certificate is registered in my name, please deliver it to me at the above address.

If the Common Stock being acquired is not registered for issuance to and resale by the Optionee pursuant to an effective registration statement on Form S-8 (or successor form) filed under the Securities Act of 1933, as amended (the “1933 Act”), I hereby represent, warrant, covenant, and agree with the Company as follows:

          The shares of the Common Stock being acquired by me will be acquired for my own account without the participation of any other person, with the intent of holding the Common Stock for investment and without the intent of participating, directly or indirectly, in a distribution of the Common Stock and not with a view to, or for resale in connection with, any distribution of the Common Stock, nor am I aware of the existence of any distribution of the Common Stock;

          I am not acquiring the Common Stock based upon any representation, oral or written, by any person with respect to the future value of, or income from, the Common Stock but rather upon an independent examination and judgment as to the prospects of the Company;

          The Common Stock was not offered to me by means of publicly disseminated advertisements or sales literature, nor am I aware of any offers made to other persons by such means;

          I am able to bear the economic risks of the investment in the Common Stock, including the risk of a complete loss of my investment therein;

          I understand and agree that the Common Stock will be issued and sold to me without registration under any state law relating to the registration of securities for sale, and will be issued and sold in reliance on the exemptions from registration under the 1933 Act, provided by Sections 3(b) and/or 4(2) thereof and the rules and regulations promulgated thereunder;

          The Common Stock cannot be offered for sale, sold or transferred by me other than pursuant to: (A) an effective registration under the 1933 Act or in a transaction otherwise in compliance with the 1933 Act; and (B) evidence satisfactory to the Company of compliance with the applicable securities laws of other jurisdictions.  The Company shall be entitled to rely upon an opinion of counsel satisfactory to it with respect to compliance with the above laws;

          The Company will be under no obligation to register the Common Stock or to comply with any exemption available for sale of the Common Stock without registration or filing, and the information or conditions necessary to permit routine sales of securities of the Company under Rule 144 under the 1933 Act are not now available and no assurance has been given that it or they will become available.  The Company is under no obligation to act in any manner so as to make Rule 144 available with respect to the Common Stock;

          I have and have had complete access to and the opportunity to review and make copies of all material documents related to the business of the Company, including, but not limited to, contracts, financial statements, tax returns, leases, deeds and other books and records.  I have examined such of these documents as I wished and am familiar with the business and affairs of the Company.  I realize that the purchase of the Common Stock is a speculative investment and that any possible profit therefrom is uncertain;

EXHIBIT 1 to Non-Qualified Stock Option Award - Page 2

          I have had the opportunity to ask questions of and receive answers from the Company and any person acting on its behalf and to obtain all material information reasonably available with respect to the Company and its affairs.  I have received all information and data with respect to the Company which I have requested and which I have deemed relevant in connection with the evaluation of the merits and risks of my investment in the Company;

          I have such knowledge and experience in financial and business matters that I am capable of evaluating the merits and risks of the purchase of the Common Stock hereunder and I am able to bear the economic risk of such purchase; and

          The agreements, representations, warranties and covenants made by me herein extend to and apply to all of the Common Stock of the Company issued to me pursuant to this Award.  Acceptance by me of the certificate representing such Common Stock shall constitute a confirmation by me that all such agreements, representations, warranties and covenants made herein shall be true and correct at that time.

I understand that the certificates representing the shares being purchased by me in accordance with this notice shall bear a legend referring to the foregoing covenants, representations and warranties and restrictions on transfer, and I agree that a legend to that effect may be placed on any certificate which may be issued to me as a substitute for the certificates being acquired by me in accordance with this notice.

 Very truly yours,

  ________________________________                                                   

 

AGREED TO AND ACCEPTED:

RUBY TUESDAY, INC.

By:      

Title:       

Number of Shares

Exercised:               

Number of Shares

Remaining:                 Date:                                             

EXHIBIT 1 to Non-Qualified Stock Option Award - Page 3

EXHIBIT 2

NOTICE OF WITHHOLDING ELECTION

RUBY TUESDAY, INC.

TO:               Ruby Tuesday, Inc.

FROM:         ____________________________

RE:               Withholding Election

This election relates to the option identified in Paragraph 3 below.  I hereby certify that:

(1) My correct name and social security number and my current address are set forth at the end of this document.

(2) I am (check one, whichever is applicable).

[  ] the original recipient of the option.

[  ] the legal representative of the estate of the original recipient of the option.

[  ] a legatee of the original recipient of the option.

[  ] the legal guardian of the original recipient of the option.

(3) The option to which this election relates was issued under the Ruby Tuesday, Inc. 2003 Stock Incentive Plan (the “Plan”) in the name of ____________________ for the purchase of a total of _________ shares of Common Stock.  This election relates to _______________ shares of Common Stock issuable upon exercise of the option, provided that the numbers set forth above shall be deemed changed as appropriate to reflect the applicable Plan provisions.

(4) In connection with any exercise of the Option, I hereby elect:

[  ] to have certain of the shares issuable pursuant to the exercise withheld by the Company for the purpose of having the value of the shares applied to pay federal, state, and local, if any, taxes arising from the exercise;

[  ] to tender shares of Common Stock held by me for a period of at least six (6) months prior to the exercise of the option for the purpose of having the value of the shares applied to pay such taxes.

[  ] to have the amount of the tax withholding obligation delivered by ________________, a broker, dealer or other “creditor” as defined by Regulation T issued by the Board of Governors of the Federal Reserve System.  I hereby authorize the Company to issue a stock certificate in number of shares indicated above in the name of said broker, dealer or other creditor or its nominee pursuant to instructions received by the Company and to deliver said stock certificate directly to that broker, dealer or other creditor (or to such other party specified in the instructions received by the Company from the broker, dealer or other creditor) upon receipt of the withholding obligation.

EXHIBIT 2 to Non-Qualified Stock Option Award - Page 1

The shares to be withheld or tendered, as applicable, shall have, as of the Tax Date applicable to the exercise, a fair market value equal to the minimum statutory tax withholding requirement under federal, state, and local law in connection with the exercise.

(5) This Withholding Election is made no later than the Tax Date and is otherwise timely made pursuant to the Plan.

(6) I understand that this Withholding Election may not be revised, amended or revoked by me (except in a manner that satisfies, if applicable, the requirements of the exemption provided under Rule 16b-3 of the Securities Exchange Act of 1934).

(7) I further understand that the Company shall withhold from the Common Stock a whole number of shares of Common Stock having the value specified in Paragraph 4 above, as applicable.

(8) The Plan has been made available to me by the Company.  I have read and understand the Plan and I have no reason to believe that any of the conditions to the making of this Withholding Election have not been met.

(9) Capitalized terms used in this Notice of Withholding Election without definition shall have the meanings given to them in the Plan.

Dated:	________________________________
	Signature
___________________________	________________________________
Social Security Number	Name (Printed)
	________________________________
	Street Address
	________________________________
	City, State, Zip code

EXHIBIT 2 to Non-Qualified Stock Option Award - Page 2

EX-10.2

RUBY TUESDAY, INC.

SERVICE STOCK AWARD

This SERVICE STOCK AWARD (the “Award”) is made and entered into as of the ____ day of _______, 2010 by and between Ruby Tuesday, Inc. (the “Company”), a Georgia corporation, and _______________ (the “Employee”).

Upon and subject to the Additional Terms and Conditions attached hereto and incorporated herein by reference as part of this Award, the Company hereby awards as of the Grant Date to the Employee the Award Shares described below pursuant to the Ruby Tuesday, Inc. 2003 Stock Incentive Plan (the “Plan”) in consideration of the Employee’s services to the Company (the “Stock Award”).

A.           Grant Date:  ________.

B.           Award Shares:  ________ shares of the Company’s common stock (“Common Stock”), $.01 par value per share.

C.           Vesting:  The Award Shares are fully vested as of the Grant Date.

IN WITNESS WHEREOF, the Company and Employee have signed this Award as of the Grant Date set forth above.

RUBY TUESDAY, INC.

By:           

Title:             

ADDITIONAL TERMS AND CONDITIONS OF

RUBY TUESDAY, INC.

STOCK AWARD

1.           Condition to Delivery of Award Shares.

(a)           Employee must deliver to the Company, within two (2) business days after the Grant Date, either cash or a certified check payable to the Company in the amount of all tax withholding obligations (whether federal, state or local) imposed on the Company by reason of the grant of the Award Shares.

(b)           In lieu of paying the withholding tax obligations in cash or by certified check as required by Section 1(a), Employee may elect (the “Withholding Election”) to have the actual number of shares of Common Stock that are Award Shares reduced by the smallest number of whole shares of Common Stock which, when multiplied by the Fair Market Value of the Common Stock determined by the closing price for the Common Stock on the last business day immediately preceding the Grant Date, is sufficient to satisfy the amount of the tax withholding obligations imposed on the Company by reason of the vesting of the Award Shares on the Grant Date.  Employee may make a Withholding Election only if all of the following conditions are met:

(i)           the Withholding Election must be timely made by executing and delivering to the Company a properly completed Notice of Withholding Election, in substantially the form of Exhibit A attached hereto; and

(ii)            any Withholding Election made will be irrevocable; however, the Committee may, in its sole discretion, disapprove and give no effect to any Withholding Election.

(c)           Unless and until the Employee provides for the payment of the tax withholding obligations in accordance with the provisions of this Section 1, the Company shall have no obligation to deliver any of the Award Shares and may take any other actions necessary to satisfy such obligations, including withholding of appropriate sums from other amounts payable to the Employee.  At the request of the Employee, the Committee may authorize the Company to participate in such arrangements between the Employee and a broker, dealer or other “creditor” (as defined by Regulation T issued by the Board of Governors of the Federal Reserve System) acting on behalf of the Employee for the receipt from such broker, dealer or other “creditor” of cash by the Company in an amount necessary to satisfy the Employee’s tax withholding obligations in exchange for delivery of a number of Award Shares directly to the broker, dealer or other “creditor” having a value equal to the cash delivered.

2.           Issuance of Award Shares.

(a)           The Company shall issue the Award Shares as of the Grant Date in either manner described below, as determined by the Committee in its sole discretion:

(i)           by the issuance of share certificate(s) evidencing Award Shares to the Employee; or

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(ii)           by documenting the issuance in uncertificated or book entry form on the Company’s stock records.

(b)           The Company shall deliver the Award Shares to the Employee or, at the Company’s election, to a broker designated by the Company (the “Designated Broker”) by either physical delivery of the share certificate(s) or book entry transfer, as applicable, for the benefit of an account established in the name of the Employee, in either case, after, to the extent applicable, payment by the Employee of the tax withholding obligations pursuant to Section 1(a) and/or reduced by any Award Shares withheld and returned to the Company pursuant to Section 1(b) above or delivered to a broker, dealer or other “creditor” as contemplated by Section 1(c) above (such reduced number of Award Shares are referred to in this Section 2(b) as the “Net Award Shares”).  If the number of Award Shares includes a fraction of a share, the Company shall not be required to deliver the fractional share to the Employee, and the number of Award Shares shall be rounded down to the next nearest whole number.  At any time after receipt by the Designated Broker, the Employee may require that the Designated Broker deliver the Net Award Shares to the Employee pursuant to such arrangements or agreements as may exist between the Designated Broker and the Employee.

(c)           The Employee shall be entitled to all rights respecting the Award Shares applicable to holders of shares of Common Stock generally, including, without limitation, the right to vote such shares and to receive dividends or other distributions thereon.

3.           Restrictions on Transfer of Award Shares.  Until the tax withholding obligations have been satisfied as described in Section 1, the Employee shall not have the right to make or permit to exist any transfer or hypothecation, whether outright or as security, with or without consideration, voluntary or involuntary, of all or any part of any right, title or interest in or to any Award Shares.  Any such disposition not made in accordance with this Award shall be deemed null and void.  The Company will not recognize, or have the duty to recognize, any disposition not made in accordance with the Plan and this Award, and any Award Shares so transferred will continue to be bound by the Plan and this Award.

4.           Governing Laws.  This Award shall be construed, administered and enforced according to the laws of the State of Georgia; provided, however, no Award Shares shall be issued except, in the reasonable judgment of the Committee, in compliance with exemptions under applicable state securities laws of the state in which the Employee resides, and/or any other applicable securities laws.

5.           Successors.  This Award shall be binding upon and inure to the benefit of the heirs, legal representatives, successors, and permitted assigns of the parties.

6.           Notice.  Except as otherwise specified herein, all notices and other communications under this Award shall be in writing and shall be deemed to have been given if personally delivered or if sent by registered or certified United States mail, return receipt requested, postage prepaid, addressed to the proposed recipient at the last known address of the recipient.  Any party may designate any other address to which notices shall be sent by giving notice of the address to the other parties in the same manner as provided herein.  Notices sent to the Company shall be addressed to the attention of the Secretary of the Company.

7.           Severability.  In the event that any one or more of the provisions or portion thereof contained in this Award shall for any reason be held to be invalid, illegal, or unenforceable in any respect, the same shall not invalidate or otherwise affect any other provisions of this Award, and this Award shall be construed as if the invalid, illegal or unenforceable provision or portion thereof had never been contained herein.

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8.           Entire Agreement.  Subject to the terms and conditions of the Plan, this Award expresses the entire understanding and agreement of the parties with respect to the subject matter.  This Award may be executed in two or more counterparts, each of which shall be deemed an original but all of which shall constitute one and the same instrument.

9.           Headings and Capitalized Terms.  Paragraph headings used herein are for convenience of reference only and shall not be considered in construing this Award.  Capitalized terms used, but not defined, in this Award shall be given the meaning ascribed to them in the Plan

10.           Specific Performance.  In the event of any actual or threatened default in, or breach of, any of the terms, conditions and provisions of this Award, the party or parties who are thereby aggrieved shall have the right to specific performance and injunction in addition to any and all other rights and remedies at law or in equity, and all such rights and remedies shall be cumulative.

11.           No Right to Continued Employment.  Neither the establishment of the Plan nor the Stock Award made pursuant to this Award shall be construed as giving Employee the right to any continued service relationship with the Company or any affiliate of the Company.

12.           Exclusivity.  For a period of three (3) years from the Grant Date, Employee agrees that he shall not perform services of any type for the following competitors:  Applebees, Chilis, T.G.I. Friday’s, O’Charley’s, Red Robin Gourmet Burgers, Olive Garden, and Outback Steakhouse unless Employee obtains the Company’s prior written consent.  Employee and Company agree that the damages which Company will suffer in the event of Employee’s breach of the foregoing covenant are impossible to quantify and determine.  Therefore, the parties agree that in the event of each such breach, Company shall have all rights and remedies available to it by law, including by way of example and not of limitation, a right of injunction and to recoup from Employee the value of the Award.

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EXHIBIT A

NOTICE OF WITHHOLDING ELECTION

RUBY TUESDAY, INC.

STOCK AWARD

TO:                      Ruby Tuesday, Inc.

FROM:                        SSN:   

RE:                      Withholding Election

This election relates to the Stock Award identified in Paragraph 3 below. I hereby certify that:

              (1)My correct name and social security number and my current address are set forth at the end of this document.

              (2)I am (check one, whichever is applicable).

[ ]           the original recipient of the Stock Award.

[ ]           the legal representative of the estate of the original recipient of the Stock Award.

[ ]           a legatee of the original recipient of the Stock Award.

[ ]           the legal guardian of the original recipient of the Stock Award.

              (3)The Stock Award pursuant to which this election relates was issued under the Ruby Tuesday, Inc. 2003 Stock Incentive Plan (the “Plan”) in the name of _________________ for a total of ______________ shares of Common Stock. This election relates to ______ shares of Common Stock to be delivered upon the vesting of a portion of the Award Shares, provided that the numbers set forth above shall be deemed changed as appropriate to reflect stock splits and other adjustments contemplated by the applicable Plan provisions.

              (4)I hereby elect to have certain of the Award Shares withheld and returned to the Company, rather than delivered to me, for the purpose of having the value of such shares applied to pay minimum required federal, state and local, if any, tax withholding obligations arising from the vesting event.

The fair market value of the Award Shares to be withheld and returned to the Company shall be equal to the minimum statutory tax withholding requirements under federal, state and local law in connection with the vesting event, reduced by the amount of any cash or certified check payment tendered by me to the Company in partial payment of such tax withholding obligations.

              (5)I understand that this Withholding Election must be timely made pursuant to Section 1 of the Stock Award and Section 5.1 of the Plan.

Exhibit A - Page 1of 2

              (6)I further understand that, if this Withholding Election is not disapproved by the Committee, the Company shall withhold from the Award Shares a whole number of shares of Common Stock having the value specified in Paragraph 4 above.

              (7)The Plan has been made available to me by the Company, I have read and understand the Plan and the Stock Award and I have no reason to believe that any of the conditions therein to the making of this Withholding Election have not been met. Capitalized terms used in this Notice of Withholding Election without definition shall have the meanings given to them in the Plan.

Dated:                             

Signature:                        

 Name (Printed)

 Street Address

 City, State, Zip Code

 Social Security Number

Exhibit A - Page 2 of 2

EX-10.3

RUBY TUESDAY, INC.

SEVERANCE PAY PLAN

Section 1

Establishment of the Plan

1.1           Purpose.  The purpose of the Plan (as defined below) generally is to provide severance benefits under the circumstances described below to Eligible Employees (as defined below) of the Company (as defined below) in the event that their employment is involuntarily terminated by the Company because business conditions require the Layoff (as defined below) of one or more affected Eligible Employees.  This Plan is designed to ease a difficult event for such Eligible Employees by providing temporary replacement income.  The receipt of severance benefits under this Plan is subject to all of the conditions and restrictions set forth below.  The Plan is not intended to provide any benefits to employees who quit, resign or retire voluntarily, accept another position with the Company or any of its Affiliates (as defined below), or who are otherwise discharged involuntarily (including, but not limited to, performance reasons, violations of company policy, or unlawful conduct) other than due to a Layoff (as defined below).

1.2           Type of Plan.  This Plan in intended to constitute an employee welfare benefit plan within the scope of Section 3(1) of ERISA and, more specifically, a severance pay plan within the scope of Department of Labor Regulations Section 2510.3-2(b), and is to be interpreted in a manner consistent with such provisions.

               1.3           Effective Date.  The effective date of this amendment and restatement is July 21, 2010 and applies to qualifying Layoffs occurring on and after July 21, 2010.

Section 2

Definitions

2.1           “Affiliate” means any entity which is controlling, controlled by, or under common control with the Company, as determined by the Company in its sole discretion.

2.2           “Agreement for Separation of Employment” means an agreement, in the form prescribed by the Plan Administrator, which provides for the terms of the Layoff and for the release and discharge of the Company and related persons and entities from any and all actions, suits, proceedings, claims, demands or causes of action, in any way directly or indirectly related to or connected with the Eligible Employee's employment with the Company or the Termination of Employment with the Employer, including but not limited to, claims relating to discrimination in employment.

2.3           “Board of Directors” means the Board of Directors of the Company.

2.4           “Cause” means the occurrence of any of the following reasons for the discharge or other involuntary termination of an Eligible Employee of his or her employment with the Employer:

(a)           willful refusal by an Eligible Employee to follow a lawful direction of any superior officer of the Company or an Affiliate, provided the direction is not materially inconsistent with the duties or responsibilities of the Eligible Employee’s position;

(b)           sustained performance deficiencies which are communicated to the Eligible Employee in writing as part of formal performance reviews and/or other written communications from any superior officer of the Company or an Affiliate;

(c)           misconduct by the Eligible Employee, including, but not limited to fraud, intentional violation of or negligent disregard for the rules and procedures of the Company or an Affiliate (including a violation of any business code of conduct maintained by the Company or an Affiliate), dishonesty, insubordination, theft or other illegal conduct, violent acts or threats of violence, or unauthorized possession or use of  controlled substances on the property of the Company or an Affiliate, or any other terminable offense under the policies and practices of the Company or an Affiliate;

(d)           intentional disclosure by the Eligible Employee to an unauthorized person of confidential information or trade secrets of the Employer, the Company (if different) or any Affiliate;

(e)           any act by the Eligible Employee of fraud against, material misappropriation from, or significant dishonesty to either the Company or an Affiliate;

(f)           conviction by the Eligible Employee of a felony;

(g)           a material breach of any agreement with the Company or an Affiliate to which an Eligible Employee is a party, provided that the nature of such breach shall be set forth with reasonable particularity in a written notice to the Eligible Employee who shall have ten (10) days following delivery of such notice to cure such alleged breach, provided that such breach is, in the reasonable discretion of the Plan Administrator or its delegatee, susceptible to a cure; or

(h)           any other involuntary or constructive termination of an Eligible Employee’s employment that does not constitute a Layoff;

For purposes of the Plan, the determination of whether a discharge or other release from employment is for Cause will be made by the Plan Administrator, in its sole and absolute discretion, and such determination will be conclusive and binding on the affected Employee.

2.5           “Code” means the Internal Revenue Code of 1986, as amended, and as construed and interpreted by valid regulations and rulings issued thereunder.

2.6           “Company” means Ruby Tuesday, Inc., a Georgia corporation, and any successor thereto.

2.7           “Eligible Employee” means an Employee who, as of the Layoff Date:

 (a)           is employed in an employment classification identified in Section 4.1;

 (b)           does not have a personal services contract with the Company; and

 (c)           has not previously agreed either orally or in writing to waive eligibility for this Plan, as determined by the Plan Administrator based on Employer records.

2.8           “Employee” means a common law employee of an Employer, as reflected on the Employer’s payroll records, excluding (a) employees classified or reclassified by an Employer as intermittent, temporary, seasonal, project or occasional; (b) persons classified by an Employer as independent contractors, regardless of how such employees may be classified or reclassified by any federal, state, or local, domestic or foreign, governmental agency or instrumentality thereof, or court; (c) expatriate employees; and (d) employees covered by a collective bargaining agreement, unless the collective bargaining agreement provides for participation in the Plan.

2.9           “Employer” means the Company and each Affiliate that the Company shall from time to time designate as an Employer for purposes of the Plan.

2.10           “ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and as construed and interpreted by valid regulations and rulings issued thereunder.

2.11           “Layoff” means (a) the involuntary Termination of Employment of an Eligible Employee from the Employer due to (i) the elimination of an employment position by the Employer due to duplicative or unnecessary positions or an announced program to reduce the size of the Employer’s workforce (other than an announced plan to reduce the size of the Employer’s workforce due to a decline in the census at a facility or location or the termination of a contract for services at a facility or location); or (ii) an announced plan of corporate downsizing or a reduction in force or job elimination (other than an announced plan to reduce the size of the Employer’s workforce due to a decline in census at a facility or location or the termination of a contract for services at a facility or location); provided, however, that in no event will an involuntary termination of employment be considered a Layoff if the involuntary termination of employment is due to Cause; (b) voluntary Termination of Employment of an Eligible Employee from the Employer due to the material reduction of the Eligible Employee’s annual base salary or annual rate of bonus potential (determined as a percentage of annual base salary) which is not otherwise part of a program of base salary or bonus potential reductions applicable to one or more other Eligible Employees; and (c) the Termination of Employment of an Eligible Employee by mutual agreement with the Company.

2.12           “Layoff Date” means an Eligible Employee’s last day of employment in connection with a Termination of Employment on account of his or her Layoff.

2.13           “Participant” means an Eligible Employee who meets the requirements for benefits under the Plan, as set forth in Section 3 of the Plan.

2.14           “Plan” means the Ruby Tuesday, Inc. Severance Pay Plan.

2.15           “Plan Administrator” means the Company.

2.16           “Successor Employer” means any entity that:

  (a)           assumes operations or functions formerly carried out by the Employer (such as the buyer of a facility or any entity to which an Employer operation or function has been outsourced);

  (b)           is an Affiliate; or

  (c)           makes a job offer at the request of the Employer (such as a joint venture of which the Employer is a member).

2.17           “Termination of Employment’ means a Participant’s “separation from service” within the meaning of Code Section 409A that also is a complete cessation of the Participant’s status as a common law employee of the Company and all Affiliates.

2.18           “WARN Act’ means the Worker Adjustment and Retraining Notification Act.

Section 3

Participation

3.1           Eligibility.  An Eligible Employee becomes a Participant if he or she is an Eligible Employee who experiences a Termination of Employment that is a Layoff, subject to the further conditions in Sections 3.2 through 3.4 and the additional limitations otherwise set forth in the Plan.

3.2           Condition Precedent.  Notwithstanding the forgoing, benefits under this Plan shall become payable to a Participant only if the Participant executes an Agreement for Separation of Employment, in a form acceptable to the Plan Administrator, that becomes irrevocable no later than sixty (60) days following the Layoff Date.

3.3           Changed Decisions.  The Employer has the right to cancel a Layoff or reschedule a Layoff Date at any time before the Layoff Date.  A Participant will not become eligible for benefits under this Plan if the Layoff Date is cancelled or if the Participant voluntarily terminates employment before the Layoff Date specified by the Employer.

3.4           Ineligibility for Severance Pay.  Under no circumstances shall severance benefits be payable under the Plan to any Participant:

(a)           whose employment is terminated for Cause;

(b)           whose employment is terminated during a period in which such Participant is not actively at work (i.e., has been on leave of absence, disability or workers’ compensation) for more than twenty-six (26) weeks, except to the extent otherwise required by law;

(c)           who (other than for reasons listed in Section 2.11(b) herein) voluntarily quits or retires, regardless of the reason, whether or not such Participant claims a constructive discharge or whether or not a constructive discharge is subsequently determined to have occurred;

(d)           who dies;

(e)           who receives an offer of employment by the Participant from a Successor Employer to commence promptly following his or her Termination of Employment by the Employer, whether the Participant accepts the position or not; or

(g)           who is offered continuing employment by the Company or an Affiliate in another job position, whether the Eligible Employee accepts the position or not;

3.5           Duration.  A Participant remains a Participant under the Plan until the earliest of:

(a)           the date the Participant is no longer an Eligible Employee;

(b)           the payment of severance benefits in full following a Layoff Date; or

(c)           the date the Plan terminates.

Section 4

Severance Benefits

4.1            Cash Severance Benefits.  The amount of severance payable to each Participant is specified in the chart below:

Title of Employee	Amount Payable
Senior Vice President and above	Two (2) times the Employee's  annualized  base salary, exclusive of  bonus

4.2           Payment.  Severance benefits due under Section 4.1) will be paid in cash, will be subject to applicable federal, state, and local tax and other payroll withholding, and will be payable in a lump sum no later than the fifteenth (15th) day of the third month following the Layoff Date.  Notwithstanding the foregoing, if the Participant is a “specified employee” within the meaning of Code Section 409A, if and to the extent that the benefits provided in Section 4.1 cannot be paid at the time contemplated without violating Section 409A(a)(2)(B)(i), payment shall be delayed until six (6) months after termination of employment (or any earlier date permitted under Treasury Regulations Section 1.409A-1(i) (or any successor guidance)).  Any payments that are so delayed shall be paid in a lump sum in cash upon the date the delayed payments can first be made.

4.3           Funding.  All benefits provided under the Plan shall be paid from the general assets of the Employer.

4.4           Withholding.  A Participant shall be responsible for payment of any federal, Social Security, state and local taxes on severance benefits provided under the Plan.  The Employer shall deduct from the severance benefits any federal, Social Security, state or local taxes which are subject to withholding, as determined by the Employer.

4.5           Offsets to Severance Benefits.

(a)           Severance benefits determined pursuant to Section 4.1 will be offset by any amount paid or payable to a Participant (but only to an amount not less than zero) pursuant to WARN, or any similar state law, in lieu of notice thereunder.

(b)           If, at the time severance benefits are payable hereunder, a Participant is indebted or obligated to the Company or any Affiliate, then such severance benefits may, at the discretion of the Plan Administrator, be reduced by the amount of such indebtedness or obligation to the extent allowable under applicable federal or state law; provided that an election not to offset shall not constitute a waiver of a claim for such indebtedness or obligation, in accordance with applicable law.

(c)           Notwithstanding any provision in the Plan to the contrary, severance benefits shall be reduced by the amount of any other severance payments made by the Employer as a result of any obligation arising outside of the Plan ..

4.6           Integration With Other Payments.  Severance benefits under this Plan are not intended to duplicate such benefits as workers’ compensation wage replacement benefits, disability benefits, pay-in-lieu-of-notice, severance pay, or similar benefits under other benefit plans, severance programs, employment contracts, or applicable laws, such as WARN.  Should such other benefits be payable, benefits payable to a Participant under this Plan will be offset or, alternatively, where otherwise permissible, the Plan Administrator may deem benefits previously paid under this Plan as having been paid to satisfy such other benefit obligations.  In either case, the Plan Administrator, in its sole discretion, will determine how to apply this provision and may override other provisions in this Plan in doing so.

4.7           Limitations.  All benefits provided pursuant to or on behalf of any Participant under the Plan shall be made in accordance with the safe harbor limitations for severance pay plans set forth in Department of Labor Regulations Section 2510.3-2(b) (which generally provide that payments be completed within twenty-four (24) months and that the total payments made not exceed the equivalent of twice a Participant’s annual compensation during the year immediately preceding the year of termination).  In the event the benefits under this Plan of any Participant exceed the safe harbor limitation concerning severance pay amounts, such benefits shall be forfeited to the extent of the excess amount.  For purposes of this Section 4.7, the term “annual compensation” means the total of all compensation, including wages, salary and any other benefit of monetary value which was paid as consideration for the Employee’s service during such year, as determined in accordance with Department of Labor Regulations Section 2510.3-2(b)(2)(i).  If the benefits provided under the Plan are required to be reduced by this Section 4.7, the Employer shall determine the manner and type of benefits subject to reduction.

Section 5

Claims for Benefits

5.1           Claims Procedure.  A Participant may file a written claim with the Company if the Participant believes he or she did not receive all benefits to which he or she is entitled under Section 4.  The written claim must be filed within sixty (60) days of the Participant’s Termination of Employment.  In the event that a claim is denied, the Company shall provide to the claimant written notice of the denial within ninety (90) days after the Company 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 from the end of such initial period.  Any extension notice shall indicate the special circumstances requiring the extension of time, the date by which the Company 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.

5.2           Notice of Denial.  If an Eligible Employee is denied a claim for benefits under the Plan, the Company 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; and

(d)           an explanation of the Plan’s claim review procedures, and the time limits applicable to such procedures.

5.3           Right to Review.  After receiving written notice of the denial of a claim, a claimant or his or her representative shall be entitled to:

(a)           request a full and fair review of the denial of the claim by written application to the Company;

(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 Company; 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.

5.4           Application for Review. If a claimant wishes a review of the decision denying his or her claim to benefits under the Plan, he or she must submit the written application to the Company within sixty (60) days after receiving written notice of the denial.

5.5           Hearing.  Upon receiving such written application for review, the Company 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 Company received such written application for review.

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

5.7           Decision on Review.  No later than sixty (60) days following the receipt of the written application for review, the Company shall submit its decision on the review in writing to the claimant involved and to his or her representative, if any, unless the Company 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 after the date of receipt of the written application for review.  If the Company determines that the extension of time is required, the Company shall furnish to the claimant written notice of the extension before the expiration of the initial sixty (60) day period.  The extension notice shall indicate the special circumstances requiring an extension of time and the date by which the Company expects to render its decision on review.  In the case of a decision adverse to the claimant, the Company 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; and

(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 an action under Section 502(a) of ERISA following the denial of the claim upon review.

5.8           Filing a Claim.  No claim may be filed with a court regarding a denial of a claim for benefits under the Plan until the Eligible Employee has exhausted the administrative review procedures under the Plan as set forth in this Section 5.  All claims for benefits denied under the Plan must be brought in a federal court for Knox County, Tennessee, within ninety (90) days after the Eligible Employee receives his or her decision on review pursuant to Section 5.7.

Section 6

Administration and Financing of the Plan

6.1           Plan Administration.The Plan shall be administered by the Plan Administrator.  The Plan Administrator shall have all such powers as may be necessary to discharge its duties hereunder, including, but not by way of limitation, the power to construe or interpret the Plan, to determine all questions of eligibility hereunder, and to perform such other duties as may from time to time be delegated to it by the Board.  The Plan Administrator may prescribe such forms and systems and adopt such rules and methods and tables as it deems advisable.  It may engage such agents, attorneys, accountants, actuaries, medical advisors, or clerical assistants (none of whom need be members of the Plan Administrator) as it deems necessary for the effective exercise of its duties, and may delegate to such agents any power and duties both ministerial and discretionary, as it may deem necessary and appropriate.  Any action taken by an agent or representative shall be considered to be the action of the Plan Administrator, when the agent or representative is acting within the scope of the authority delegated to it by the Plan Administrator, and the Plan Administrator shall be responsible for all such actions.

6.2           Discretionary Authority.  The Plan Administrator shall have the responsibility and the 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 whether an Eligible Employee has met the necessary requirements of Section 3 to receive benefits under the Plan.  All determinations by the Plan Administrator shall be conclusive and binding on all Eligible Employees subject to the provisions of the Plan and subject to applicable law.

6.3           Books and Records.  The records of the Employers shall be conclusive evidence as to all information contained therein with respect to the basis for participation in the Plan and for the calculation of severance benefits.  The Plan Administrator shall keep all individual and group records relating to Participants and all other records necessary for the proper operation of the Plan.  Such records shall be made available to the Employers and to each Participant for examination during normal business hours except that a Participant shall examine only such records as pertain exclusively to the examining Participant and the Plan.  The Plan Administrator shall prepare and shall file as required by law or regulation all reports, forms, documents and other items required by ERISA, the Code and every other relevant statute, each as amended, and all regulations thereunder and shall retain appropriate records thereof

6.4           Status of Plan Administrator.  The Plan Administrator shall be the “administrator” of the Plan as described in ERISA.  The Plan Administrator shall be a named fiduciary of the Plan.

Section 7

Amendment and Termination

The Plan is completely voluntary on the part of the Company and Employers and neither its existence nor its continuation shall be construed as creating any contractual right to or obligation for its continued existence.  The Company reserves the right at any time to modify or terminate the Plan by resolution of the Board of Directors; provided, however, that in the event the Plan is terminated or in the event the Plan is amended to reduce benefits, the specific provisions of the Plan with respect to claims arising prior to the amendment or termination shall control, and no amendment or

termination shall have the effect of retroactively changing or depriving Participants of rights already accrued under the Plan.  Any Participant’s right to benefits under the Plan shall accrue on a Participant’s Layoff Date.  Notwithstanding the foregoing, the Board of Directors may delegate the authority to amend the Plan to an officer or officers of the Company.  An amendment or termination of the Plan shall apply to all Employers then sponsoring the Plan.

Section 8

Miscellaneous Provisions

8.1           No Waiver.  The failure of the Company to enforce at any time any of the provisions of the Plan shall in no way be construed to be a waiver of these provisions, nor in any way to affect the validity of the Plan or any part thereof, or the right of the Company thereafter to enforce every provision.

8.2           Headings.  Article headings are for convenience only and the language of the Plan itself shall be controlling.

8.3           Assignment and Alienation.  Except as required by law, the benefits payable under this Plan will not be subject to alienation, transfer, assignment, garnishment, execution or levy of any kind, and any attempt to cause any benefits to be so subjected will not be recognized.  In the event of the death of Participant, any benefits to which the Participant may be entitled shall be payable to his or her estate.

8.4           Successors.  The Plan shall be binding upon assigns of the Company.  The Plan may be assigned by the Company to a person or entity which is an Affiliate or a successor in interest to substantially all of the business operations of the Company.  The terms “Company” and “Employer” in the event of a permitted assignment hereunder will include any such assignee and in the event that the Employer causes the Eligible Employee’s employment to be directly transferred to the employment of another legal entity or the Employer acquiesces in such transfer, the Eligible Employee will not be deemed to have had a Termination of Employment hereunder as a result of such transfer.

8.5           Choice of Law. This Plan is construed under, to the extent not preempted by Federal law, enforced in accordance with and governed by, the laws of the State of Georgia, without reference to the principles of conflict of laws.  If any provision of this Plan is found to be invalid, such provision shall be deemed modified to comply with applicable law and the remaining terms and provisions of this Plan will remain in full force and effect.

8.6           Severability.  Should any provisions or portion of the Plan be deemed or held to be invalid, illegal or unenforceable for any reason, the same shall not invalidate or otherwise affect any other provisions of the Plan, and the Plan shall be construed as if the invalid, illegal or unenforceable provision or portion of the Plan had never been contained herein.

8.7           Overpayments.  If any overpayment is made under the Plan for any reason, the Employer will have the right to recover the overpayment.  The Participant shall cooperate fully with the Plan and return any overpayment.

8.8           280G Taxes.  In the event that it is determined that any payment or benefits provided under the Plan would not be fully deductible to an Employer by reason of the limitations of Code Section 280G, the amounts of any such payments or benefits under the Plan will be reduced by the minimum amount necessary to provide that no payments or benefits provided to the Participant will fail to be deductible by the Employer by reason of the limitations under Code Section 280G and no excise tax under Code Section 4999 will be imposed on such Participant.

               8.9           No Guarantee of Employment.  Nothing contained in this Plan shall be construed as a contract of employment between the Company or any Affiliate and a Participant, or as a right of any Participant to be continued in the employment of any such entity, or as a limitation of the right of an Employer to discharge any Participant with or without Cause.  Nor shall anything contained in this Plan affect the eligibility requirements under any other plans maintained by the Employer, nor give any person a right to coverage under any other plan.

8.10        Notice.  Any notice given hereunder is sufficient if given to the Employee by the Employer, or if mailed to the Employee to the last known address of the Employee as such address appears on the records of the Employer.

8.11        Service of Process.  The Company shall be the designated recipient of service of process with respect to legal actions regarding the Plan.

8.12        No Guarantee of Tax Consequences.  The Employer makes no commitment or guarantee that any amounts paid to or for the benefit of a Participant under this Plan will be excludable from the Participant's gross income for federal, Social Security, or state or local income tax purposes, or that any other federal, Social Security, or state or local income tax treatment will apply to or be available to any Participant.  It shall be the obligation of each Participant to determine whether each payment under this Plan is excludable from the Participant's gross income for federal, Social Security, and state or local income tax purposes, and to notify the Plan Administrator if the Participant has reason to believe that any such payment is so excludable.

8.13        Limitation of Liability.  Neither any Employer nor the Plan Administrator shall be liable for any act or failure to act which is made in good faith pursuant to the provisions of the Plan, except to the extent required by applicable law.  It is expressly understood and agreed by each Eligible Employee who becomes a Participant that, except for its willful misconduct or gross neglect, neither any Employer nor the Plan Administrator shall be subject to any legal liability to any Participant, for any cause or reason whatsoever, in connection with this Plan, and each such Participant hereby releases the Employer, its officers and agents, and the Plan Administrator, and its agents, from any and all liability or obligation except as provided in this Section.

8.14        Incompetency.  If the Plan Administrator finds that a Participant is unable to care for his or her affairs because of illness or accident, then benefits payable hereunder, unless claim has been made therefor by a duly appointed guardian, committee, or other legal representative, may be paid in such manner as the Plan Administrator will determine, and will constitute a complete discharge of all liability for any payments or benefits to which such Participant was or would have been otherwise entitled under the Plan.

8.15       Several, and Not Joint, Obligations.  The obligation to pay benefits to any Participant under this Plan is the sole obligation of the Employer who has employed the Participant and for whom such Participant has performed services, and payment of such benefits is not the obligation of any other Employer or their affiliates.

Section 9

ERISA Information

9.1         Statement of ERISA Rights.  A Participant in the Plan is entitled to certain rights and protections under ERISA.  ERISA provides that all Participants will be entitled to (a) examine, without charge, at the Plan Administrator’s office, and at other specified locations, all Plan documents; and (b) obtain copies of all Plan documents upon written request to the Plan Administrator, who may make a reasonable charge for the copies.  In addition to creating rights for Participants, ERISA imposes duties upon the people who are responsible for the operation of an employee benefit plan.  The people who operate the Plan, called “fiduciaries” of the Plan, have a duty to do so prudently and in the interest of Participants.  No one, including the Company or other person, may fire an employee or otherwise discriminate against an employee in any way to prevent the employee from obtaining a benefit under this Plan or exercising his or her rights under ERISA.  If a claim for a welfare benefit is denied in whole or in part, an employee must receive a written explanation of the reason for the denial.  Within certain time limits specified under Section 5, an employee has the right to have the Plan review and reconsider a claim.  Under ERISA, there are steps an employee can take to enforce the above rights.  For instance, if an employee requests materials from the Plan and does not receive them within 30 days, the employee may file suit in a federal court.  In such a case, the court may require the Plan Administrator to provide the materials and pay the employee up to $110 a day until the employee receives the materials, unless the materials were not sent because of reasons beyond the control of the Plan Administrator.  If an employee has a claim for benefits hereunder which is denied or ignored, in whole or in part, the employee may file suit in a state or federal court.  If it should happen that Plan fiduciaries misuse the Plan’s money, or if an employee is discriminated against for asserting his or her rights, the employee may seek assistance from the U.S. Department of Labor, or the employee may file a suit in a federal court.  The court will decide who should pay court costs and legal fees.  If the employee is successful, the court may order the person sued to pay these costs and fees.  If the employee loses, the court may order the employee to pay these costs and fees, for example, if it finds the employee’s claim is frivolous.

If an employee has any questions about the Plan, the employee should contact the Plan Administrator.  If the employee has any questions about this statement or about his or her rights under ERISA, he or she should contact the nearest office of Employee Benefits Security Administration, U. S. Department of Labor, listed in your telephone directory (formerly known as the Pension and Welfare Medical Benefits Administration) or the Employee Benefits Security Administration, U. S. Department of Labor, 200 Constitution Avenue N.W., Washington, D. C. 20210.  An employee may also obtain certain publications about his or her rights and responsibilities under ERISA by calling the publications hotline of the Employee Benefits Security Administration.

9.2           Official Name of the Plan.  Ruby Tuesday, Inc. Severance Pay Plan.

9.3           Name of Plan Sponsor/Plan Administrator.  [Reserved.]  The Plan Administrator keeps records of the Plan and is responsible for the administration of the Plan.  The Plan Administrator will also answer any questions a Participant may have about the Plan.

9.4           Employer Identification Number.  63-0475239

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9.5           Plan Number.  5__.

9.6           Type of Plan.  Employee Welfare Severance Benefit Plan.

9.7           End of Plan Year.  December 31.

9.8           Type of Administration.  Employer Administration.

IN WITNESS WHEREOF, the Company has caused the Plan to be executed as of the 21 day of July, 2010.

RUBY TUESDAY, INC.

By:   /s/ Samuel E. Beall, III

Samuel E. Beall, III

Chairman, Chief Executive Officer and President

[CORPORATE SEAL]

ATTEST:

/s/ Scarlett May

Secretary