RUBY TUESDAY, INC.

RESTRICTED STOCK AWARD

 

This RESTRICTED STOCK AWARD (the “Award”) is made and entered into as of the ___
day of ______________, 2007 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 Restricted 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 “Restricted
Stock Award”).

 

 

A.

Grant Date: ______________.

 

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

 

C.            Vesting: The Restricted Shares shall become vested, as and to the
extent indicated below, only if the Performance Condition and Service Condition,
each as specified below, are satisfied.

 

(1)          Performance Condition. The Performance Condition is satisfied to
the extent the “earnings per share – diluted,” as finally reported by the
Company in its annual report on Form 10-K as filed with the SEC for Fiscal 2008,
as adjusted to _________________________________, shows a change in the
“earnings per share – diluted,” as finally reported by the Company in its annual
report on Form 10-K as filed with the SEC for Fiscal 2007, as adjusted to
_______________________________________, in accordance with the following
schedule:

 

 

Number of Restricted Shares

 

Percent Change

Becoming Net Restricted Shares

 

 

less than ____%

0

 

[Interim stages of satisfaction of Performance Condition below maximum level]

 

 

___% or more

[Same number as entered in Paragraph B]

 

If the percentage change is between two of the whole percentages specified
above, the number of Net Restricted Shares shall be determined by using linear
interpolation between those percentages.

 

Except as provided in Paragraph C.(2) below, the Restricted Shares that do not
become Net Restricted Shares shall be forfeited as of the last day of the
Company’s 2008 fiscal year.

 

(2)          Service Condition. The Service Condition is satisfied only if the
Employee provides continuous services to the Company and/or any affiliate for
the period following the Grant Date in accordance with the following Vesting
Schedule:

 

 

Percentage of Net Restricted Shares

 

Years of Vesting Service

which are Vested Shares

 

 

Less than 3

0%

 

3 or more

100%

 

 

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The Employee shall receive one Year of Vesting Service for each full consecutive
one-year period of continuous service during the period beginning with the Grant
Date and ending on the date the Employee experiences a Termination of
Employment, regardless of the reason.

 

Notwithstanding the foregoing, the Service Condition will be deemed satisfied as
to all of the Net Restricted Shares if the Employee provides continuous services
to the Company and/or any affiliate following the Grant Date through the date of
any of the earlier events listed below (but only if the date of such event
occurs after the last day of the Company’s 2008 fiscal year):

 

(a)         in the event of (i) a Termination of Employment by the Company (or
affiliate) without Cause; (ii) a Termination of Employment due to Disability,
(iii) attainment of age 65, (iv) satisfaction of the Rule of 90 under the Ruby
Tuesday, Inc. Executive Supplemental Pension Plan; or (v) death;

 

 

(b)

the effective date of a Divestiture; or

 

 

(c)

the effective date of a Change in Control.

 

In addition, if the Employee provides continuous services to the Company and/or
any affiliate following the Grant Date through the date of an event described in
Paragraph C.(2)(a), (b) or (c) above (but on or prior to the last day of the
Company’s 2008 fiscal year), the Performance Condition will be deemed to be
satisfied as if the earnings per share change under Paragraph C.(1) was ____%,
with the number of Net Restricted Shares corresponding to that performance level
in accordance with the schedule under Paragraph C.(1) above and the Service
Condition will be deemed satisfied as to such Net Restricted Shares.

 

The Net Restricted Shares which have satisfied (or are deemed to have satisfied)
both the Performance Condition and Service Condition are herein referred to as
the “Vested Shares.” Any portion of the Net Restricted Shares which have not
become Vested Shares in accordance with this Paragraph C.(2) before or at the
time of Employee’s Termination of Employment shall be forfeited.

 

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

 

 

Ruby Tuesday, Inc.

 

By:   

 

Employee

 

 

Title:

 

 

2

 

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ADDITIONAL TERMS AND CONDITIONS OF

RUBY TUESDAY, INC.

RESTRICTED STOCK AWARD

 

 

1.

Condition to Delivery of Restricted Shares.

 

(a)    Employee must deliver to the Company, within two (2) business days after
the earlier of (i) the date (the “Vesting Date”) on which any Restricted Shares
become Vested Shares, or (ii) the date the Employee makes an election pursuant
to Section 83(b) of the Internal Revenue Code as to all or any portion of the
Restricted Shares, 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 vesting of the Restricted Shares, or the
making of an election pursuant to Section 83(b) of the Internal Revenue Code, as
applicable, except as provided in Section 1(b).

 

(b)           If the Employee does not make an election pursuant to Section
83(b) of the Internal Revenue Code, 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 become Vested 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 applicable Vesting Date, is sufficient to
satisfy the amount of the tax withholding obligations imposed on the Company by
reason of the vesting of the Restricted Shares on the applicable Vesting Date.
Employee may make a Withholding Election only if all of the following conditions
are met:

 

(i)            the Withholding Election must be made on or prior to the Vesting
Date 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
Compensation Committee of the Board of Directors of the Company (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 Vested Shares and may
take any other actions necessary to satisfy such obligations, including
withholding of appropriate sums from other amounts payable to the Employee.
Provided that the Employee is not a “director” or “executive officer”, within
the meaning of Section 13(k) of the Securities Exchange Act of 1934 (Section 402
of the Sarbanes-Oxley Act of 2002), at the time tax withholding obligations
become due, at the request of the Employee, the Committee may make, or authorize
the making of, such arrangements with 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 Vested Shares directly to the broker, dealer or other
“creditor” having a value equal to the cash delivered.

 

 

2.

Issuance of Restricted Shares.

 

 

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(a)         The Company shall issue the Restricted 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 Restricted
Shares to the Secretary of the Company or such other agent of the Company as may
be designated by the Committee or the Secretary (the “Share Custodian”); or

 

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

 

Evidence of the Restricted Shares either in the form of share certificate(s) or
book entry, as the case may be, shall be held by the Company or Share Custodian,
as applicable, until the Restricted Shares become Vested Shares in accordance
with the Vesting Schedule.

 

(b)         If the Employee is determined by the Committee to be an “affiliate”
of the Company, as such term is defined in Rule 144 (“Rule 144”) under the
Securities Act of 1933, as amended (the “Securities Act”), the Restricted Shares
(and the Vested Shares resulting therefrom) shall be evidenced only by physical
share certificates.

 

(c)         When the Restricted Shares become Vested Shares, the Company or the
Share Custodian, as the case may be, shall deliver the Vested 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 Vested 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 Vested Shares are referred to in this Section 2(c) as the “Net Vested
Shares”). If the number of Vested Shares includes a fraction of a share, neither
the Company nor the Share Custodian shall be required to deliver the fractional
share to the Employee, and the Company shall pay the Employee the amount
determined by the Company to be the estimated fair market value therefor. At any
time after receipt by the Designated Broker, the Employee may require that the
Designated Broker deliver the Net Vested Shares to the Employee pursuant to such
arrangements or agreements as may exist between the Designated Broker and the
Employee.

 

(d)         In the event that the Employee forfeits any of the Restricted
Shares, the Company shall cancel the issuance on its stock records and, if
applicable, the Share Custodian shall promptly deliver the share certificate(s)
representing the forfeited shares to the Company.

 

(e)         Employee hereby irrevocably appoints the Share Custodian, and any
successor thereto, as the true and lawful attorney-in-fact of Employee with full
power and authority to execute any stock transfer power or other instrument
necessary to transfer any Restricted Shares to the Company in accordance with
this Award, in the name, place, and stead of the Employee. The term of such
appointment shall commence on the Grant Date of this Award and shall continue
until the last of the Restricted Shares are delivered to the Employee as Vested
Shares or are returned to the Company as forfeited Restricted Shares or as
Vested Shares withheld and returned to the Company pursuant to Section 1(b), as
provided by the applicable terms of this Award.

 

(f)          Until the Restricted Shares become Vested Shares, the Employee
shall be entitled to all rights applicable to holders of shares of Common Stock
including, without limitation, the

 

4

 

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right to vote such shares and to receive dividends or other distributions
thereon as provided by Section 3, except as expressly provided in this Award.

 

(g)         In the event the number of shares of Common Stock is increased or
reduced as a result of a subdivision or combination of shares of Common Stock or
the payment of a stock dividend or any other increase or decrease in the number
of shares of Common Stock or other transaction such as a merger, reorganization
or other change in the capital structure of the Company, the Employee agrees
that any certificate representing shares of Common Stock or other securities of
the Company issued as a result of any of the foregoing shall be delivered to the
Share Custodian or recorded in book entry form, as applicable, and shall be
subject to all of the provisions of this Award as if initially granted
hereunder.

 

3.           Dividends. The Employee shall be entitled to dividends or other
distributions paid or made on Restricted Shares but only as and when the
Restricted Shares to which the dividends or other distributions are attributable
become Vested Shares. Dividends paid on Restricted Shares will be held by the
Company and transferred to the Employee, without interest, on such date as the
Restricted Shares become Vested Shares. Dividends or other distributions paid on
Restricted Shares that are forfeited shall be retained by the Company.

 

 

4.

Restrictions on Transfer of Restricted Shares.

 

(a)         General Restrictions. Except as provided by this Award, 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 Restricted 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 Restricted Shares so transferred will continue to be
bound by the Plan and this Award. The Employee (and any subsequent holder of
Restricted Shares) may not sell, pledge or otherwise directly or indirectly
transfer (whether with or without consideration and whether voluntarily or
involuntarily or by operation of law) any interest in or any beneficial interest
in any Restricted Shares except pursuant to the provisions of this Award. Any
sale, pledge or other transfer (or any attempt to effect the same) of any
Restricted Shares in violation of any provision of the Plan or this Award shall
be void, and the Company shall not record such transfer, assignment, pledge or
other disposition on its books or treat any purported transferee or pledgee of
such Restricted Shares as the owner or pledgee of such Restricted Shares for any
purpose.

 

(b)         Certain Permitted Transfers. The restrictions contained in this
Section 4 will not apply with respect to transfers of the Restricted Shares
pursuant to applicable laws of descent and distribution; provided that the
restrictions contained in this Section 4 will continue to be applicable to the
Restricted Shares after any such transfer; and provided further that the
transferee(s) of such Restricted Shares must agree in writing to be bound by the
provisions of the Plan and this Award.

 

 

5.

Additional Restrictions on Transfer.

 

(a)    In addition to any legends required under applicable securities laws, the
certificates representing the Restricted Shares shall be endorsed with the
following legend and the Employee shall not make any transfer of the Restricted
Shares without first complying with the restrictions on transfer described in
such legend:

 

5

 

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TRANSFER IS RESTRICTED

 

THE SECURITIES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON
TRANSFER AND FORFEITURE PROVISIONS WHICH ALSO APPLY TO THE TRANSFEREE AS SET
FORTH IN A RESTRICTED STOCK AWARD, DATED ___________, A COPY OF WHICH IS
AVAILABLE FROM THE COMPANY.

 

(b)           Opinion of Counsel. No holder of Restricted Shares may sell,
transfer, assign, pledge or otherwise dispose of (whether with or without
consideration and whether voluntarily or involuntarily or by operation of law)
any interest in or any beneficial interest in any Restricted Shares, except (i)
pursuant to an effective registration statement under the Securities Act or (ii)
in a transaction that fully complies with Rule 144, without first delivering to
the Company an opinion of counsel (reasonably acceptable in form and substance
to the Company) that neither registration nor qualification under the Securities
Act and applicable state securities laws is required in connection with such
transfer.

 

 

6.

Change in Capitalization.

 

(a)    The number and kind of Restricted Shares 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. No
fractional shares shall be issued in making such adjustment. All adjustments
made by the Committee under this Section shall be final, binding, and
conclusive.

 

(b)    In the event of a merger, consolidation, extraordinary dividend
(including a spin-off), reorganization, recapitalization, sale of substantially
all of the Company’s assets, other change in the capital structure of the
Company, tender offer for shares of Common Stock or a Change in Control, an
appropriate adjustment may be made with respect to the Restricted Shares such
that other securities, cash or other property may be substituted for the Common
Stock held by Share Custodian or recorded in book entry form pursuant to this
Award.

 

(c)    The existence of the Plan and the Restricted Stock Award shall not affect
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 part of its business or assets, or any other corporate act or
proceeding.

 

7.           Governing Laws. This Award shall be construed, administered and
enforced according to the laws of the State of Georgia; provided, however, no
Restricted 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.

 

8.           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

 

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9.           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.

 

10.         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.

 

11.         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.

 

12.         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

 

13.         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.

 

14.         No Right to Continued Employment. Neither the establishment of the
Plan nor the Restricted 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.

 

 

15.

Special Definitions.

 

(a)         For purposes of this Award, the term “Cause” has the same meaning as
provided in the employment agreement between the Employee and the Company or, if
applicable, any affiliate of the Company on the date of Termination of
Employment, or if no such definition or employment agreement exists, “Cause”
means conduct amounting to (a) fraud or dishonesty in the performance of the
duties of Employee’s service with the Company or its affiliates, (b) Employee’s
willful misconduct, refusal to follow the reasonable directions of his/her
supervisors, or knowing violation of law, rules or regulations (including
misdemeanors relating to public intoxication, driving under the influence, use
or possession of controlled substances or relating to conduct of a similarly
nature), (c) acts of moral turpitude or personal conduct in violation of
Company’s Code of Business Conduct and Ethics, (d) absence from work without
reasonable excuse, (e) intoxication with alcohol or drugs while on Company’s or
affiliates’ premises, (f) a conviction or plea of guilty or nolo contendere to a
crime involving dishonesty, or (g) a breach or violation of the terms of any
agreement to which Employee and the Company (or any affiliate) are party.

 

(b)         For purposes of this Award, the term “Divestiture” means the sale by
the Company, or an affiliate of the Company, of previously Company (or
affiliate) operated units or

 

7

 

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businesses to an independent company, where the Employee was employed at, or
supervised, such units or businesses and, upon the completion of such
transaction, the Employee’s employment with the Company (or affiliate) ceases
and Employee immediately becomes an employee or owner of the purchaser of such
units or businesses.

 

 

 

8

 

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EXHIBIT A

 

NOTICE OF WITHHOLDING ELECTION

RUBY TUESDAY, INC.

RESTRICTED STOCK AWARD

 

TO:

Ruby Tuesday, Inc.

 

FROM:

SSN:

 

RE:

Withholding Election

 

This election relates to the Restricted 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).

 

 

o

the original recipient of the Restricted Stock Award.

 

 

o

the legal representative of the estate of the original recipient of the
Restricted Stock Award.

 

 

o

a legatee of the original recipient of the Restricted Stock Award.

 

 

o

the legal guardian of the original recipient of the Restricted Stock Award.

 

(3)           The Restricted 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 Restricted 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 Vested 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 Vested 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 is made prior to the
Vesting Date and is otherwise timely made pursuant to Section 1 of the
Restricted Stock Award and Section 5.1 of the Plan.

 

Exhibit A - Page 1 of 2

 

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(6)           I further understand that, if this Withholding Election is not
disapproved by the Committee, the Company shall withhold from the Vested 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 Restricted 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