Ruby Tuesday, Inc. Salary Deferral Plan
Financial Statements
and Supplemental Schedules
Years ended December 31, 1999 and 1998
Contents
Independent Auditors' Report.........................................4
Audited Financial Statements
Statements of Net Assets Available
for Benefits - December 31, 1999 and 1998............................5
Statements of Changes in Net Assets Available
for Benefits - Years Ended December 31, 1999 and 1998................6
Notes to Financial Statements........................................7
Supplemental Schedules
Schedule of Assets Held for Investment
Purposes - December 31, 1999........................................13
Schedule of Reportable Transactions-
Year Ended December 31, 1999........................................14
<PAGE>
Independent Auditors' Report
Employee Benefits Committee of
Ruby Tuesday, Inc.
We have audited the accompanying statement of net assets available for benefits
of the Ruby Tuesday, Inc. Salary Deferral Plan (the Plan) as of December
31, 1999, and the related statement of changes in net assets available for
benefits for the year then ended. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audit. The accompanying
financial statements of Ruby Tuesday, Inc. Salary Deferral Plan as of and for
the year ended December 31, 1998 were audited by other auditors whose report
thereon dated June 23, 1999 expressed an unqualified opinion on those
statements.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Ruby
Tuesday, Inc. Salary Deferral Plan as of December 31, 1999 and the changes in
net assets available for benefits for the year then ended in conformity with
generally accepted accounting principles.
Our audit was performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets held
for investment purposes and reportable transactions are presented for purposes
of additional analysis and are not a required part of the basic financial
statements, but are supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. These supplemental schedules are the
responsibility of the Plan's management. The supplemental schedules have been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, are fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
/s/ KPMG LLP
Louisville, Kentucky
June 19, 2000
<PAGE>
Ruby Tuesday, Inc. Salary Deferral Plan
Statements of Net Assets Available for Benefits
December 31
1999 1998
---------------------------------------------------------------
Assets
Investments. at fair value:
Company Stock Funds $4,320,043 $5,014,372
Mutual Funds 8,338,765 7,196,438
Money Market Funds and Cash 602,494 1,086,294
Loans to Participants 297,012 287,896
------------------------------------------------
13,558,314 13,585,000
Guaranteed investment contracts
with insurance companies,
at contract value 103,025 531,614
------------------------------------------------
Total Investments 13,661,339 14,116,614
Contributions Receivable:
Participants 77,116 124,971
Employer 11,948 23,455
------------------------------------------------
89,064 148,426
------------------------------------------------
Net Assets Available for Benefits $13,750,403 $14,265,040
================================================
See accompanying notes to the financial statements
<PAGE>
Ruby Tuesday, Inc. Salary Deferral Plan
Statements of Changes in Net Assets Available for Benefits
December 31
1999 1998
-------------------------------------------
Net Investment Income:
Net appreciation in fair value
of investments $388,285 $2,122,181
Dividends on Ruby Tuesday,
Inc. common stock 21,508 20,942
Other dividends and interest 337,578 346,037
-------------------------------------------
747,371 2,489,160
Administrative Expenses (43,171) (41,087)
-------------------------------------------
704,200 2,448,073
Contributions:
Participants 1,412,127 1,532,220
Employer 199,378 247,715
-------------------------------------------
1,611,505 1,779,935
Distributions to participants (2,830,342) (1,355,907)
-------------------------------------------
Net (Decrease) Increase (514,637) 2,872,101
Net assets available for benefits
at beginning of year 14,265,040 11,392,939
-------------------------------------------
Net assets available for benefits
at end of year $13,750,403 $14,265,040
===========================================
See accompanying notes to the financial statements
<PAGE>
Ruby Tuesday, Inc. Salary Deferral Plan
Notes to Financial Statements
December 31, 1999 and 1998
1. Description of the Plan
The following description of Ruby Tuesday, Inc. Salary Deferral Plan (the
Plan)is provided for informational purposes only. Participants should
refer to the Plan agreement for a more complete description of the Plan's
provisions.
(a) General
The Plan is a voluntary, defined contribution plan covering all
full-time employees of Ruby Tuesday, Inc. (The Company) who have one
year of service and are age twenty-one or older. It is subject to the
Employee Retirement Income Security Act of 1974 (ERISA).
The general administration of the Plan is the responsibility of the
Employee Benefits Committee (the Committee) which consists of at
least two persons and not more than seven persons appointed by the
Board of Directors. Cost of administering the Plan are paid by the
Company to the extent not paid by the Trust.
(b) Contributions
Each year, participants may contribute between 2% and 10% of their
annual compensation as defined in the Plan. Participants may also
contribute amounts representing distributions from other qualified
defined benefit or contribution plans. Participants direct the
investment of their contributions into various options offered by the
Plan. The Plan currently offers a Company Stock fund, seven mutual
funds, one money market fund, and a guaranteed investment contract as
investment options for participants. The Company matches 20% of the
employee's contribution for those employees who have completed at
least 3 years of service but fewer than 10 years; 30% of the
employee's contribution for those employees who have completed at
least 10 years of service but fewer than 20 years; and 40% of the
employee's contribution for those employees who have completed at
least 20 years of service. The matching Company contribution is
invested directly in Ruby Tuesday, Inc. Common stock. For those
employees whom are classified as a highly compensated employee, the
Company matches 20% of the employee's contribution regardless of the
employee's years of service. Contributions are subject to certain
limitations.
<PAGE>
Ruby Tuesday, Inc. Salary Deferral Plan
Notes to Financial Statements
December 31, 1999 and 1998
(c) Participant Accounts
Each participant's account is credited with the participant's
contribution and allocations of the Company's contribution and Plan
earnings, and charged with an allocation of administrative expenses.
Allocations are based on participant earnings or account balances, as
defined. Forfeited balances of terminated participant's nonvested
accounts are used to reduce future company contributions. The benefit
to which a participant is entitled is the benefit that can be
provided from the participant's vested account.
(d) Vesting
Participants are 100% vested in their contributions and respective
matching Company contributions plus actual earnings thereon.
(e) Payment of Benefits
On termination of service due to death, disability, or retirement,
the participant or the beneficiary of the participant shall receive a
lump-sum payment in cash.
(f) Participant Loans
Participants may borrow from their fund accounts a minimum balance of
$500 up to a maximum equal to the lesser of $50,000 or 50 percent of
their vested account balance. The loans are secured by the balance of
the participant's account. The interest rate charged is fixed at the
time of the loan at the prime rate plus 1%.
2. Significant Accounting Policies
(a) Basis of Accounting
The financial statements of the Plan are presented on the accrual
method of accounting.
<PAGE>
Ruby Tuesday, Inc. Salary Deferral Plan
Notes to Financial Statements
December 31, 1999 and 1998
(b) Use of Estimates
The preparation of the financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect reported amounts of net assets
available for benefits and the reported changes in such net assets
available for benefits during the reported period. Actual results may
vary from those estimates.
(c) Investment Valuation and Income Recognition
Investments in mutual funds are stated at fair value based on quoted
redemption values on the last business day of the plan year. Ruby
Tuesday, Inc. common stock is traded on the New York Stock Exchange
and is valued at the closing sales price on the last business day of
the plan year.
Guaranteed investment contracts are stated at the contract value as
determined by the insurance companies. Contract value represents
contributions made under the contracts, plus interest at the contract
rates, less funds used to pay benefits and the insurance companies'
administrative expenses.
Purchases and sales of securities are recorded on a trade-date basis.
Interest income is recorded on the accrual method.
(d) Plan Expenses
Administrative expenses of the Plan are paid by the Company to the
extent not paid by the Trust.
<PAGE>
Ruby Tuesday, Inc. Salary Deferral Plan
Notes to Financial Statements
December 31, 1999 and 1998
3. Investments
The Plan's investments are held by a trust fund administered by Prudential
Investments except for its guaranteed investment contracts with insurance
companies (see Note 7) and its investments in mutual funds which are held by the
funds themselves.
The fair values of individual investments that represenent 5%
or more of the Plan's net assets at December 31, 1999
and 1998 are as follows:
1999 1998
------------------------------------------
Investments at fair value as determined
by quoted market prices:
Company stock funds
Ruby Tuesday, Inc. common stock $ 4,320,043 * $ 5,014,372 *
Mutual Funds:
Putnam Diversified Income Trust
Fund 2,167,844 2,199,459
Prudential Equity Fund 2,201,902 3,664,128
Franklin Small Cap Growth Fund 1,299,226
Prudential Moneymart Assets 1,086,294
Prudential Stock Index Fund 1,188,912
Templeton Growth Fund 1,124,370
* Nonparticipant-Directed
The Plan's investments (including gains and losses on investments
bought and sold, as well as held during the year) appreciated
by $388,285 and $2,122,181 during the years ended December 31, 1999
and 1998, respectively, as follows:
December 31
1999 1998
------------------------------------------
Company stock funds $ (730,750) $2,079,333
Mutual funds 1,119,035 42,848
Guaranteed investment contracts - -
------------------------------------------
Totals $ 388,285 2,122,181
==========================================
<PAGE>
Ruby Tuesday, Inc. Salary Deferral Plan
Notes to Financial Statements
December 31, 1999 and 1998
Information about the components of the changes in net assets during the years
ended December 31, 1999 and 1998 related to the nonparticipant-directed
investments are as follows.
Change in net assets: December 31
1999 1998
-----------------------------------------------
Net (depreciation)appreciation $(730,750) 2,079,333
Dividends 21,508 20,942
Other dividends and interest 14,728 6,451
Administrative expenses (9,141) (8,388)
Contributions 557,927 629,644
Distributions to participants (569,328) (453,310)
Net transfers to participant-directed investments (3,856) (117,145)
--------------------------------
$(718,912) 2,157,527
================================
4. Plan Termination
The Plan may be terminated at any time by the Company's Board of
Directors. Upon termination, all assets are to be distributed to Plan
participants or their beneficiaries. Each participant would receive a
proportionate share of the remaining assets, as determined by the
individual account balances, on the date of termination.
5. Income Tax Status
The Internal Revenue Service has determined and informed the Company
by a letter dated April 2, 1997, that the Plan and related trust are
designed in accordance with applicable sections of the Internal
Revenue Code (IRC). Although the plan has been amended since
receiving the determination letter, the Plan administrator and the
Plan's tax counsel believe that the Plan is designed and is currently
being operated in compliance with the applicable requirements of the
IRC.
<PAGE>
Ruby Tuesday, Inc. Salary Deferral Plan
Notes to Financial Statements
December 31, 1999 and 1998
6. Transactions with Parties In Interest
The Company Stock Fund invests solely in Company Stock. At December
31, 1999 and 1998, this fund held 475,070 and 471,940 shares of this
stock, respectively, with market values of $4,320,043 or $9.09 per
share and $5,014,372 or $10.63 per share, respectively. Certain Plan
investments are shares of mutual funds managed by Prudential
Investments. Prudential Investments is the trustee as defined by the
Plan and, therefore, these transactions qualify as party-in-interest
transactions. Fees paid by the Plan for the investment management
services amounted to $43,171 and $41,087 for the years ended December
31, 1999 and 1998, respectively.
7. Guaranteed Investment Contracts with Insurance Companies
The Plan had guaranteed investment contracts with two insurance
companies: New York Life and Transamerica Occidental Life. Deposits
made under these contracts earn interest at guaranteed rates between
7.08% and 7.70%. The contracts have various terms relating to the
allowance of withdrawals. Each contains provisions for investment
loss (surrender) charges which the Plan would have to pay in the
event of early withdrawal prior to contract maturity date. The
contracts with New York Life matured during the Plan year ended
December 31, 1999. The contract values of the individual investments
which comprise the total of the guaranteed investment contracts at
December 31, 1999 and 1998 are as follows:
1999 1998
---------------------------------------
New York Life Insurance Company,
guaranteed investment contract $ - 320,003
Transamerica Occidental Life,
guartanteed investment contract 103,025 211,611
---------------------------------------
$ 103,025 531,614
=======================================
The average yield for the contracts for the years ended December
31, 1999 and December 31, 1998 was 7.60% and 6.71%, respectively.
The fair value of the contracts determined using the sum of the
present values of each of the contracts' projected cash flows,
discounted at the December 31, 1999 rates based on current yields of
similar investments with comparable durations approximates the
contract value of the contracts at December 31, 1999.
8. Subsequent Event
On April 10, 2000, the Board of Directors of the Company declared a
two-for-one split of the Company's common stock to be effected as a
stock dividend for stockholders of record on April 28, 2000.
Accordingly, the shares and per share amounts have been restated to
give effect to the stock split.
<PAGE>
Ruby Tuesday, Inc. Salary Deferral Plan
Schedule of Assets Held for Investment Purposes
Employer Identification Number 63-0475239
Plan Number 001
December 31,1999
Identity of Issuer,
Borrower, Lessor or Description of Current
Similar Party Investment Cost Value
Investments:
Company Stock Fund:
Ruby Tuesday, Inc. * 475,070 shares $3,153,100 $4,320,043
of common stock
Mutual Funds:
Aim High Yield Fund A 9,175 shares 83,169 73,943
of mutual fund
Putnam Diversified Income A 201,285 shares 2,422,282 2,167,844
of mutual fund
Aim Balanced Fund A 8,644 shares 240,828 282,568
of mutual fund
Prudential Stock Index Z * 36,526 shares 1,014,967 1,188,912
of mutual fund
Prudential Equity Fund A * 113,976 shares 2,246,434 2,201,902
of mutual fund
Franklin Small Capital 29,441 shares 718,088 1,299,226
Growth of mutual fund
Templeton Growth Fund A 56,331 shares 1,059,494 1,124,370
of mutual fund
----------------------------
Total Mutual Funds 7,785,262 8,338,765
Money Market Fund:
Prudential MoneyMart 602,494 shares 602,494 602,494
Assets A * of mutual fund
Guaranteed Investment
Contracts with Insurance
Companies, at Contract
Value:
Transamerica Occidental Guaranteed investment 103,025 103,025
Life contract
Participant Loans Prime + 1% 0 297,012
----------------------------
Total Assets Held for Investment Purposes $11,643,881 $13,661,339
============================
* Represents a party-in-interest
<PAGE>
Ruby Tuesday, Inc. Salary Deferral Plan
Schedule of Reportable Transactions
Employer Identification Number 63-0475239
Plan Number 001
December 31,1999
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Current Value
of Asset on
Purchase Selling Cost of Transaction Net Gain
Identity of Party Involved Description of Assets Price Price Asset Date or (Loss)
------------------------------------------------------------------------------------------------------------------------------------
Individual Transactions in Excess of 5% of Plan Assets
------------------------------------------------------------------------------------------------------------------------------------
There were no transactions involving nonparticipant-directed investments in excess of 5% of Plan assets
Series of Securities Transactions in Excess of 5% of Plan Assets
------------------------------------------------------------------------------------------------------------------------------------
* Prudential Investments *Ruby Tuesday Co Stock 682,451 682,451 682,451
Ruby Tuesday Co Stock 646,030 425,387 646,030 220,643
Note: This schedule only includes participant directed investments
* Represents a party-in-interest
</TABLE>
<PAGE>
SIGNATURES
Ruby Tuesday, Inc. Salary Deferral Plan. Pursuant to the requirements
of the Securities Exchange Act of 1934, the Compensation Committee of
the Ruby Tuesday, Inc. Salary Deferral Plan have duly caused this annual
report to be signed on its behalf by the undersigned hereunto duly authorized.
Ruby Tuesday, Inc.
Salary Deferral Plan
Date June 28, 2000 /s/Dolph Von Arx
------------- Dolph Von Arx
Director; Chairman,
Compensation Committee
Date June 28, 2000 /s/J. Russell Mothershed
------------- J. Russell Mothershed
Plan Administrator
