Note 15 - Subsequent Events

3 Months Ended

Sep. 05, 2017

Notes to Financial Statements

Subsequent Events [Text Block]

15.

Subsequent Events

Sale of Company

On

October 16, 2017,

we entered into an Agreement and Plan of Merger (the “

Merger Agreement”) among RTI Holding Company, LLC, a fund managed by NRD Capital ("NRD"), RTI Merger Sub, LLC, a wholly owned subsidiary of RTI Holding Company, LLC (“Merger Sub”), and Ruby Tuesday Inc. (“Ruby Tuesday”), pursuant to which, among other things and subject to the satisfaction or waiver of specified conditions, Merger Sub will merge with and into Ruby Tuesday (the “Merger”). If the Merger is consummated, we will become a wholly-owned subsidiary of NRD. Accordingly, this Quarterly Report on Form

10

-Q should be read with the understanding that, should the Merger be completed, NRD will have the power to control the conduct of our business.

At the effective time of the Merger (the “

Effective Time”), each share of Ruby Tuesday common stock issued and outstanding immediately prior to the Effective Time (other than dissenting shares) will be converted into the right to receive

$2.40

in cash, without interest.

The transaction has been unanimous

ly approved by our and NRD’s Board of Directors. The completion of the Merger is subject to customary conditions, including, without limitation, (

1

) the approval of the Merger Agreement and the transactions contemplated thereunder by Ruby Tuesday’s stockholders (the “Shareholder Approval”); (

2

) the absence of any restraining order, preliminary or permanent injunction or other court order or other legal restraint or prohibition preventing the consummation of the Merger, (

3

) subject to certain qualifications, the accuracy of representations and warranties of Ruby Tuesday, RTI Holding Company, LLC, and Merger Sub, and (

4

) the performance in all material respects of the obligations of Ruby Tuesday, RTI Holding Company, LLC, and Merger Sub, respectively.

The Merger Agreement includes detailed represe

ntations, warranties and covenants of Ruby Tuesday, RTI Holding Company, LLC, and Merger Sub. Between the date of execution of the Merger Agreement and the Effective Time, Ruby Tuesday has agreed to conduct its business in the ordinary course and use its reasonable best efforts to preserve intact its business organizations and relationships with

third

parties (including customers, suppliers, distributors and franchisees) and to keep available the services of its present officers and employees.

In addition, Ruby Tuesday has ag

reed

not

to, and to cause its subsidiaries

not

to, and to

not

authorize or permit their respective directors, officers, employees or other representatives to, directly or indirectly, solicit, initiate or knowingly take any action to facilitate or encourage the submission of any Acquisition Proposals (as defined in the Merger Agreement) prior to the receipt of the Shareholder Approval. The acquisition is expected to be completed during the

first

calendar quarter of

2018.

NRD Partners II, L.P., the parent of RTI Holding Company, LLC

, has entered into a Limited Guarantee dated

October 16, 2017 (

the “Limited Guarantee”) with Ruby Tuesday to guarantee RTI Holding Company, LLC's obligation to pay its termination fee to Ruby Tuesday and certain other specified payments to Ruby Tuesday, subject to the terms and conditions set forth in the Limited Guarantee.

The foregoing description of the Merger Agreement and Limited Guarantee does

not

purport to be complete and is qualified in its entirety by reference to the Merger Agreement and Limited Guarantee filed

as exhibits

1.1

and

1.2,

respectively, to the

8

-K filed on

October 16, 2017.