April 4, 2017

 

 

 

James F. Hyatt, II

1461 North Shore Drive

Greensboro, GA 30642

 

 

Dear Jim:

 

We are pleased to offer you the position of President and Chief Executive
Officer of Ruby Tuesday, Inc. (the “Company”), subject to our satisfactory
completion of a background check, the satisfactory completion of reference
checks and your eligibility to accept this position.  You will be an employee of
the Company, reporting directly to its Board of Directors (the “Board”). This
offer letter is effective as of your expected start date of April 4, 2017 (the
“Employment Date”), and your employment is subject to the terms set forth more
fully herein.  

 

Once you commence your employment, and subject to the necessary approvals, you
will be appointed to serve as a member of the Board.  We will expect you to
cooperate and take all necessary or otherwise desirable actions to facilitate
that appointment.

 

Please read this offer letter carefully before you agree to its terms by signing
it, and you may wish to consult an attorney prior to signing. This offer letter
sets forth certain compensation and benefits during your employment with the
Company. It also sets forth the mutual agreement between you and the Company to
arbitrate any dispute or claim arising out of or related to your employment by
the Company and to waive all rights to a trial or hearing before a court or
jury, except as provided below. Conditioned upon your acceptance of this offer,
your at-will employment will begin on the Employment Date and will continue
until terminated by either you or the Company.

 

 

1.

Salary. Your annualized base salary will be $850,000 (the "Base Salary") and
will be paid to you in accordance with the Company's standard payroll practices.

 

 

2.

Annual Bonus. You will be eligible to receive an annual cash bonus award (the
“Annual Bonus”) pursuant to the terms of the Company’s Executive Incentive
Compensation Plan, based upon the extent to which any performance targets
associated therewith are satisfied, as determined by the Board or its applicable
committee (in either case, the “Committee”). You will have a target bonus equal
to 100% of Base Salary. You will be eligible to receive an Annual Bonus
beginning with respect to the fiscal year that starts June 1, 2017. The Annual
Bonus shall be paid out in accordance with the terms of the Company’s Executive
Incentive Compensation Plan, but in no event shall the Annual Bonus be paid
later than two and a half months following the end of the calendar year that
ends immediately after the fiscal year for which the Annual Bonus relates.

 

For that portion of the fiscal year ending May 31, 2017 (FY17) in which you are
employed by the Company, you will also be eligible to receive a one-time bonus
at the same target level of 100% of your Base Salary, but prorated to reflect
the portion of FY17 you are actually employed. Payment of any such prorated
bonus for FY17 will be directly tied to and dependent on your achievement of
specified performance goals to be determined by the Committee.

 

 

3.

Equity Compensation. On the Employment Date, and on each of the three-month,
six-month, nine-month and twelve-month anniversaries of the Employment Date, you
will receive a restricted stock award with a target grant date value of
$375,000. Each such award will vest in three annual installments from the
respective grant date of such award. Thereafter, you will be eligible to receive
an annual long-term incentive award, beginning with respect to the fiscal year
beginning on June 1, 2018, with a target grant date value of $1.5 million to be
granted under the Ruby Tuesday, Inc. Stock Incentive Plan in a form (which may
include a mixture of types of awards) and pursuant to terms to be determined by
the Committee in its sole discretion but similar to the grants made to other
senior executive officers. Notwithstanding the foregoing, it is understood that
the board of directors of the Company has previously announced its decision to
explore strategic alternatives for the Company, and it is specifically agreed
that should the Company announce an agreement to be sold as part of the
strategic alternatives review, no grants of these awards shall be made following
the announcement date.

 

 

4.

Benefits. You will be eligible to participate in the employee benefit plans,
policies or arrangements maintained by the Company for its senior executive
officers generally, subject to the terms and conditions of such plans, policies
or arrangements.

 

 

5.

Employee Code of Conduct. You will be expected to sign and comply with the
Company’s Code of Business Conduct and Ethics during your employment with the
Company.

 

 

6.

Restrictive Covenants. During the term of your employment, and for the periods
thereafter specified below, you will be subject to the restrictive covenants set
forth in this offer letter.

 

 

a.

No Competition. You agree that while you are employed by the Company and for one
year thereafter you will not, directly or indirectly, on your own behalf or on
behalf of any person or entity, manage, operate, join, control or participate
in, including as an officer, director, employee, independent contractor,
consultant, advisor, agent, proprietor or trustee, any business or venture
located within the United States which engages in the casual dining business,
whether or not such business has franchised its operations.

 

 

b.

No Solicitation. While you are an employee of the Company and for three years
thereafter, you shall not, for yourself or on behalf of any other person,
corporation or entity, seek to employ, solicit or recruit any employee of the
Company or any of its respective franchisees or licensees for employment by any
third party, or induce or encourage any such employee to terminate such
employment, nor will you knowingly provide the name of any employee of the
Company for the purpose of solicitation or recruitment by any third party.

 

 

c.

No Other Employment. You agree, acknowledge and understand that the nature of
the Company’s business is highly competitive. For the consideration described
herein, you agree that while you are an employee of the Company, you will devote
your full time, energy, skills and best efforts to your duties and
responsibilities as such an employee, and you will not enter into any
employment, consulting or similar relationship with any organization or entity,
unless you obtain prior approval from the Board. Notwithstanding the foregoing,
you may serve on up to two other corporate or not-for-profit boards with the
prior written consent of the Board, including any boards on which you sit as of
the date hereof that have been previously disclosed to the Company.

 

 

d.

Confidential Information. In your capacity with the Company, you will have
access to Confidential Information (as defined herein). You agree to maintain
the confidentiality of all Confidential Information perpetually. “Confidential
Information” means data and information relating to the business of the Company
which is disclosed to you or of which you have become aware as a consequence of
or through your employment with the Company and is not generally known to its
competitors including, without limitation, financial information, processes,
manuals, technology, business strategies, tactics and future restaurant opening
schedules. Confidential Information shall not include (a) any data or
information that (i) has been voluntarily disclosed to the public by the Company
(except where such public disclosure was effected by you without authorization),
(ii) has been independently developed and disclosed by others or (iii) otherwise
enters the public domain through lawful means, or (b) your skills or experience
developed in connection with performance of job functions.

 

 

e.

Trade Secrets. In your capacity with the Company, you will have access to Trade
Secrets (as defined under the Uniform Trade Secrets Act or other applicable
law), which are the sole and exclusive property of the Company. You agree that
during your employment and for the maximum period of time thereafter allowable
under applicable law, except to the extent necessary to perform your obligations
hereunder, you shall not reproduce, use, distribute or disclose any Trade
Secrets to any other person including, without limitation, any competitors or
potential competitors of the Company. Notwithstanding anything to the contrary
in this offer letter or otherwise, as provided for in the Defend Trade Secrets
Act of 2016 (18 U.S.C. § 1833(b)), you will not be held criminally or civilly
liable under any federal or state trade secret law for the disclosure of a trade
secret that (i) is made (A) in confidence to a federal, state, or local
government official, either directly or indirectly, or to an attorney, and (B)
solely for the purpose of reporting or investigating a suspected violation of
law; or (ii) is made in a complaint or other document filed in a lawsuit or
other proceeding, if such filing is made under seal.

 

 

f.

No Disparagement. You shall not, during and after your employment with the
Company, make any disparaging remarks to the public regarding the Company, its
executive officers or members of the Board. The Company shall direct its
executive officers and members of the Board to not, during and after your
employment with the Company, make any disparaging remarks to the public
regarding you.

 

 

g.

Revision. You and the Company agree that, in the event that any provision of
this Section 6 shall be determined by any court of competent jurisdiction to be
unenforceable by reason of its being extended over too great a time, too large a
geographic area or too great a range of activities, such provision shall be
deemed to be modified to permit its enforcement to the maximum extent permitted
by law. If any provision of this offer letter is held to be invalid, illegal or
unenforceable, such invalidity, illegality or unenforceability shall not affect
any other provision of this Agreement.

 

 

h.

Remedies. You further acknowledge and agree that any violation of any of the
provisions of this Section 6 would cause the Company immediate, substantial and
irreparable injury for which there is no adequate remedy at law. Accordingly,
you agree and consent to the entry of an injunction or other equitable relief by
a court of competent jurisdiction restraining any violation or threatened
violation of any such provisions. You waive posting by any party hereto of any
bond otherwise necessary to secure such injunction or other equitable relief.
Rights and remedies provided for in this Section 6 are cumulative and shall be
in addition to rights and remedies otherwise available to the parties hereunder
or under any other agreement or applicable law.

 

 

i.

No Prior Covenants. You represent and warrant that you have not entered into any
agreement with a prior employer that contains a non-compete, confidentiality,
non-solicitation or similar provision that would affect your ability to be
employed by and provide services to the Company as contemplated by this offer
letter.

 

 

7.

Severance. In the event of your Termination without Cause or for Good Reason
(both as defined below) prior to the first anniversary of the Employment Date,
you shall be entitled to receive, subject to (i) your execution of a general
waiver and release of claims against the Company and its affiliates within 45
days following your termination date and non-revocation of such general waiver
and release of claim, during any statutory revocation period and (ii) your
continued compliance with the restrictive covenants set forth in Section 6, an
amount equal to 100% of Base Salary payable in a lump sum payment on the 60th
day following your termination date (the “Severance Payment”). For the avoidance
of doubt, the foregoing shall supersede and replace any other severance or
similar payment or benefit under any other agreement, plan or policy. From and
following the first anniversary of the Employment Date, you will be eligible for
any severance benefits under the Ruby Tuesday, Inc. Executive Severance Plan
(with cash severance equal to two times your Base Salary) or the Ruby Tuesday,
Inc. Change in Control Severance Plan (with cash severance equal to two times
the sum of your Base Salary and target Annual Bonus), as applicable.

 

 

a.

“Cause” means conduct amounting to: (i) fraud or dishonesty in the performance
of your duties with the Company or its affiliates, (ii) willful misconduct,
refusal to follow the reasonable directions of the Board, 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), (iii) acts of moral
turpitude or personal conduct in violation of the Company’s Code of Business
Conduct and Ethics, (iv) repeated and extended absence from work without
reasonable excuse, (v) a conviction or plea of guilty or nolo contendere to a
felony or (vi) a material breach or violation of the terms of any agreement to
which you and the Company (or any affiliate) are party.

 

 

b.

“Good Reason” means, following a change in control, a material diminution in
your authority, duties or responsibilities; provided that you give written
notice of the event or events which are the basis for such assertion within 90
days after the event or events occur, (ii) the Company has not cured or fully
remedied such event or events within 30 days after receiving such written notice
and (iii) your termination date is no later than 120 days after such event or
events.

 

 

8.

At-Will Employment. Your employment with the Company is at-will. Either you or
the Company may terminate the employment relationship at any time for any
reason. Additionally, the Company may take any other employment action at any
time for any reason.

 

 

9.

Arbitration. Any controversy or claim arising out of or relating to this offer
letter, or the breach thereof, shall be settled by binding arbitration in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association. The decision of the arbitrator shall be final and binding on the
parties and judgment upon the award rendered by the arbitrator may be entered in
any federal or state court located in Knox or Blount County, Tennessee. You and
the Company agree to share equally the fees and expenses associated with the
arbitration proceedings.

 

 

10.

Choice of Law. All issues and questions concerning or arising out of this offer
letter will be governed by, and construed in accordance with, the laws of the
State of Tennessee, without giving effect to any choice of law or conflict of
law rules or provisions (whether of the State of Tennessee or any other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of Tennessee.

 

By signing below you are agreeing that you have read and understood every
provision of this offer letter and that, in consideration for your employment by
the Company, you agree to abide by its terms.

 

To accept this offer, please sign below and return this offer letter to the
Company, ATTN: Rhonda Parish.

 

If you have any questions regarding the conditions of your offer, please do not
hesitate to contact me at (914) 523-1469 or Rhonda at (407) 241-3431.

 

Sincerely,

 

 

Ruby Tuesday, Inc.

       

By:

/s/ Steve Sadove    

Name:Steve Sadove

   

Title:Chairman of the Board

 

 

 

AGREED AND ACKNOWLEDGED:

 

 

By:

/s/ James F. Hyatt, II    

Name: James F. Hyatt, II

   

Date: April 4, 2017