Note J - Employee Post-Employment Benefits

6 Months Ended

Dec. 03, 2013

Compensation and Retirement Disclosure [Abstract]

Pension and Other Postretirement Benefits Disclosure [Text Block]

NOTE J – EMPLOYEE POST-EMPLOYMENT BENEFITS

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

Retirement Plan

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

Minimum funding for the Retirement Plan is determined in accordance with the guidelines set forth in employee benefit and tax laws. From time to time we may contribute additional amounts as we deem appropriate. We estimate that we will be required to make contributions totaling $0.3 million to the Retirement Plan during the remainder of fiscal 2014.

Executive Supplemental Pension Plan and Management Retirement Plan 

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

To provide a source for the payment of benefits under our non-qualified pension plans, we own whole-life insurance contracts on certain employees. These policies are maintained in a rabbi trust. During the second quarter of fiscal 2014, we sold certain of these policies, the proceeds from which we expect to reinvest in new policies during the third quarter of fiscal 2014. As a result of the sale of these policies, we classified the $8.8 million restricted cash as Other assets in the noncurrent section of our December 3, 2013 Condensed Consolidated Balance Sheet.

Postretirement Medical and Life Benefits

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

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

	Pension Benefits
	Thirteen weeks ended						Twenty-six weeks ended
	December 3,			December 4,			December 3,			December 4,
	2013			2012			2013			2012
Service cost	$	89		$	115		$	178		$	230
Interest cost		434			525			868			1,050
Expected return on plan assets		(111	)		(102	)		(222	)		(204	)
Amortization of prior service cost (a)	–				26		–				52
Recognized actuarial loss		428			565			856			1,130
Net periodic benefit cost	$	840		$	1,129		$	1,680		$	2,258

	Postretirement Medical and Life Benefits
	Thirteen weeks ended						Twenty-six weeks ended
	December 3, 2013			December 4, 2012			December 3, 2013			December 4, 2012
Service cost	$	3		$	3		$	6		$	6
Interest cost		17			15			34			30
Amortization of prior service cost (a)		(11	)		(14	)		(22	)		(28	)
Recognized actuarial loss		61			53			122			106
Net periodic benefit cost	$	70		$	57		$	140		$	114

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

During the 13 and 26 weeks ended December 3, 2013, we reclassified $0.5 million and $1.0 million, respectively, of amortized prior service costs and recognized actuarial losses out of accumulated other comprehensive loss and into pension expense, which is included in Selling, general and administrative, net within our Condensed Consolidated Statements of Operations.

We also sponsor two defined contribution retirement savings plans. Information regarding these plans is included in our Annual Report on Form 10-K for the fiscal year ended June 4, 2013.

Executive Separations and Corporate Support Services Restructuring

On June 7, 2013, our then Executive Vice President, Chief Operations Officer separated employment with the Company. During the first quarter of fiscal 2014, we recorded severance expense of $0.9 million in connection with the separation agreement for the former executive, which represents obligations pursuant to the Ruby Tuesday, Inc. Severance Pay Plan (the “Severance Plan”) of two times base salary. Of this amount, $0.5 million was paid to the former executive during the 13 weeks ended September 3, 2013, and the remaining $0.4 million was paid subsequent to December 3, 2013 in accordance with the Severance Plan.

On October 7, 2013, the Company terminated the Severance Plan.

On October 30, 2013, our then Senior Vice President, Chief People Officer separated employment with the Company. During the second quarter of fiscal 2014, we recorded severance expense of $0.4 million in connection with his separation agreement, an amount representing one year of his annual base salary plus his remaining vacation for fiscal 2014. Of this amount, an insignificant portion was paid during the quarter and the remaining amounts will be paid over three future installments.

On November 20, 2013, we eliminated approximately 50 support center management and staff personnel at our Restaurant Support Services Center in Maryville, Tennessee. These reductions occurred in connection with an ongoing comprehensive review of our cost structure. These employee separations resulted in second quarter fiscal 2014 transition-related costs of $2.0 million for employee severance and unused vacation.

As of December 3, 2013, a liability of $2.4 million representing unpaid obligations in connection with the restructuring was included within Accrued liabilities: Payroll and related costs in our Condensed Consolidated Balance Sheet. A roll forward of our obligations in connection with employee separations is as follows (in thousands):

Balance at June 4, 2013	$	310
Employee severance and unused vacation accruals		3,212
Cash payments		(1,139	)
Balance at December 3, 2013	$	2,383

See Notes L and R to the Condensed Consolidated Financial Statements for discussion of the impact of executive separations to our share-based employee compensation costs and further staff reductions subsequent to quarter end, respectively.