AMENDMENT NO. 4 TO EMPLOYMENT AGREEMENT

This Amendment No. 4 to Employment Agreement (“Amendment”) is made as of the 8th
day of October, 2008, by and between RUBY TUESDAY, INC., a Georgia corporation
(the “Company”) and SAMUEL E. BEALL, III, a resident of the State of Tennessee
(“Executive”).

WHEREAS, the Company and Executive are parties to that certain Employment
Agreement dated of as June 19, 1999, as amended by Amendments No. 1, No. 2 and
No. 3 thereto (collectively, the “Agreement”).

WHEREAS, Amendment No. 2 to the Agreement was adopted primarily for the purpose
of conforming the provisions of the Agreement to the extent minimally necessary
to satisfy the requirements of Section 409A of the Internal Revenue Code
concerning restrictions on the time and form of payments of severance benefits
and to revise a portion of the severance payment formula for the purpose of
preserving deductibility to the Company of annual bonuses payable to the
Executive without effecting any material economic difference in the compensatory
arrangements reflected by the Agreement.

 

WHEREAS, the Company has identified an error in the revised severance benefit
formula reflected by Amendment No. 2 that was not intended and is inconsistent
with the limited objectives of the parties in entering into Amendment No. 2.

 

WHEREAS, with the consent of the Executive, the Company desires to enter into
Amendment No. 4 to the Agreement to conform the revised severance benefit
formula so that it reflects the original intent of the parties.

WHEREAS, capitalized terms not otherwise defined herein shall have the same
meanings attributed to such terms in the Agreement.

NOW, THEREFORE, for and in consideration of Ten Dollars ($10.00) and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree that the Agreement shall be amended, effective
as of July 18, 2008, as follows:

 

1.

Section 4.7 of the Agreement is deleted in its entirety and the following is
substituted therefor:

“4.7     Qualified Termination. In the event of (a) a Qualified Termination; 
(b) an involuntary Termination of the Executive other than for Cause; or (c) an
election by the Executive to effect a voluntary Termination within sixty (60)
days after a failure of the Board of Directors of the Company to elect, or the
action of the Board of Directors to remove, in either case in the absence of
Cause, the Executive as Chairman of the Board, this Agreement shall terminate
and the Company shall have no further obligations hereunder except as follows:
(i) payment of any obligations earned and accrued but unpaid as of the date of
the Qualified Termination or other Termination, as applicable; (ii) payment of a
lump sum amount equal to the product of three (3), multiplied by the Adjusted
Base Salary; (iii) payment of a percentage of the Base Salary amount in effect

 

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when the Qualified Termination occurs, which percentage is determined in
accordance with the following table:

 

Fiscal Quarter in Which the

 

Qualified Termination Occurs

Applicable Percentage

 

 

First

25%

 

Second

50%

 

Third

75%

 

Fourth

100%;

 

(iv) the payment of earned but unused vacation through the end of the calendar
month in which such Qualified Termination (or other Termination) occurs; and (v)
the provision of health, life and disability coverages to the Executive and
eligible dependents for a period of thirty-six (36) months at active employee
rates (or reimbursement for replacement coverage(s) in an amount not to exceed
the cost of the corresponding Company coverage to the extent continued Company
coverage can not be provided pursuant to any underlying insurance policy then in
effect or where such continued coverage would have adverse tax effects to the
Executive or other plan participants). Payments due under clauses (i), (ii),
(iii) and/or (iv) shall be made in a lump sum in cash as soon as
Administratively Practicable following the date of the Qualified Termination (or
other Termination). Payment of obligations under any other employee benefit
plans shall be determined in accordance with the provisions of those plans;
provided, however, that the Executive’s accrued benefit under the Ruby Tuesday,
Inc. Executive Supplemental Pension Plan shall be determined by increasing the
Executive’s actual years of ‘Continuous Service’ (as defined therein) by an
additional three (3) full years.

 

Notwithstanding any other provision of this Agreement to the contrary, if the
aggregate amount provided for in this Agreement and any other payments and
benefits which the Executive has the right to receive from the Company and its
Affiliates (determined without regard to the provisions of this paragraph) would
subject the Executive to an excise tax under Section 4999 of the Internal
Revenue Code (or any successor federal tax law), or any interest or penalties
are incurred or paid by the Executive with respect to such excise tax (any such
excise tax, together with any such interest and penalties, are hereinafter
collectively referred to as the ‘Excise Tax’), then the Executive shall be
entitled to an additional payment from the Company as is necessary (after taking
into account all federal, state and local taxes (regardless of type, whether
income, excise or otherwise) imposed upon the Executive as a result of the
receipt of the payment contemplated by this Agreement) to place the Executive in
the same after-tax position the Executive would have been in had no Excise Tax
been imposed or incurred or paid by the Executive. The accounting firm of
Lattimore, Black, Morgan and Cain (or its successor) or any other certified
public accounting firm agreed to by the Company and the Executive shall
determine the extent, if any, of the Company’s obligations pursuant to this
paragraph after receipt of notice from either the Company or the Executive that
a payment has been made that may subject the Executive to the Excise Tax. The
accounting firm shall make its determination within thirty (30) days after the
receipt of any such notice. The Company shall pay to the Executive in cash in a
lump sum any amount that the accounting firm

 

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determines would be due pursuant to this paragraph by March 15th of the calendar
year following the calendar year in which the Qualified Termination or other
Termination occurs.”

 

 

2.

New Section 20.0 of the Agreement is added, as follows:

“20.0   ‘Adjusted Base Salary’ shall mean the Base Salary amount in effect as of
the effective date of a Qualified Termination or other Termination, as
applicable, multiplied by two (2).”

 

3.

Existing Section 20.0 of the Agreement is re-designated as Section 20.0A.

 

 

4.

Section 20.11A of the Agreement is deleted in its entirety and the following is
substituted therefor:

 

“20.11A          ‘Termination’ For purposes of Section 4, Executive will have
effected or experienced a Termination only if either (a) the Executive has
ceased to perform any services for the Company and all affiliated companies
that, together with the Company, constitute the ‘service recipient’ within the
meaning of Code Section 409A and the regulations thereunder (collectively, the
‘Service Recipient’) or (b) the level of bona fide services the Executive
performs for the Service Recipient after a given date (whether as an employee or
as an independent contractor) permanently decreases (excluding a decrease as a
result of military leave, sick leave, or other bona fide leave of absence if the
period of such leave does not exceed six months, or if longer, so long as the
Executive retains a right to reemployment with the Service Recipient under an
applicable statute or by contract) to no more than forty-nine percent (49%) of
the average level of bona fide services performed for the Service Recipient
(whether as an employee or an independent contractor) over the immediately
preceding 36-month period.”

 

5.         Affirmation of Agreement. To the extent not amended herein, the
remaining terms and conditions of the Agreement are ratified and reaffirmed.

 

[Signatures on Following Page]

 

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IN WITNESS WHEREOF, the Company and the have executed and delivered this
Amendment No. 4 as of the date first shown above.

 

COMPANY:

 

RUBY TUESDAY, INC.

 

 

By: /s/ Marguerite N. Duffy

Marguerite N. Duffy

Senior Vice President &

Chief Financial Officer

 

 

 

By: /s/ Stephen I. Sadove  

Stephen I. Sadove

Chairman, Compensation & Stock

Option Committee

 

 

EXECUTIVE:

 

                         /s/ Samuel E. Beall, III

 

SAMUEL E. BEALL, III

 

 

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