RUBY TUESDAY, INC. NON-QUALIFIED STOCK OPTION AWARD

RUBY TUESDAY, INC.

NON-QUALIFIED STOCK OPTION AWARD

THIS AWARD is made as of the Grant Date, by RUBY TUESDAY, INC. (the “Company”) to Samuel E. Beall, III (the “Optionee”). Upon and subject to the Terms and Conditions attached hereto and incorporated herein by reference, the Company hereby awards as of the Grant Date to Optionee a non-qualified stock option (the “Option”), as described below, to purchase the Option Shares.

A.        Grant Date: __________.

B.        Type of Option: Non-Qualified Stock Option.

C.        Plan (under which Option is granted): Ruby Tuesday, Inc. 2003 Stock Incentive Plan pursuant to the Executive Stock Option Program.

D.        Option Shares: All or any part of _______ shares of the Company’s common stock (the “Common Stock”), subject to adjustment as provided in the attached Terms and Conditions.

E.         Exercise Price: $______ per share.

F.         Option Period: The Option may be exercised as to the Vested Option Shares during the Option Period which commences on the Grant Date and ends on the seventh (7th) anniversary of the Grant Date or on an earlier date as provided in the attached Terms and Conditions. Note that other restrictions to exercising the Option described in the attached Terms and Conditions may apply.

G.        Vested Option Shares: The Option Shares shall become Vested Option Shares, as and to the extent indicated below, only if and to the extent the Service Condition is satisfied. The Service Condition is satisfied only if the Optionee provides Continuous Service to the Company and/or any affiliate for the period beginning with the Grant Date through the date described in the following Vesting Schedule:

The Optionee shall be determined to have provided “Continuous Service” through the date specified in the Vesting Schedule above if the Optionee continues in the employ of the Company and/or any affiliate without experiencing a Termination of Employment, regardless of the reason. All or a portion of the Option Shares may become Vested Option Shares on an earlier date as provided in the attached Terms and Conditions.

Any portion of the Option Shares which have not become Vested Option Shares in accordance with this Paragraph G or Section 3 of the Additional Terms and Conditions at the time of Optionee’s Termination of Employment shall be forfeited .

IN WITNESS WHEREOF, the Company has executed and sealed this Award as of the Grant Date set forth above.

TERMS AND CONDITIONS TO THE

RUBY TUESDAY, INC.

NON-QUALIFIED STOCK OPTION AWARD

1.          Exercise of Option . Subject to the provisions provided herein or in the Award made pursuant to the Ruby Tuesday, Inc. 2003 Stock Incentive Plan and to the Executive Stock Option Program, the Option may be exercised with respect to all or any portion of the Vested Option Shares at any time during the Option Period by the delivery to the Company, at its principal place of business, of:

(a)        a written notice of exercise in substantially the form attached hereto as Exhibit 1, which shall be actually delivered to the Company prior to the date upon which Optionee desires to exercise all or any portion of the Option;

(b)         payment to the Company of the Exercise Price multiplied by the number of shares being purchased (the “Purchase Price”) as provided in Section 5 and

Upon acceptance of such notice and receipt of payment in full of the Purchase Price and the withholding liability, the Company shall cause to be issued a certificate representing the Option Shares purchased.

2.            Adjustment of Option Shares . If Optionee is demoted to a job category with respect to which either (a) no option or (b) an option subject to fewer option shares would have been granted to the Optionee pursuant to the Executive Stock Option Program had the Optionee been in that job category on the Grant Date, then the number of Option Shares as to which the Option has not been exercised as of the date of the demotion shall be adjusted as follows: If the Optionee would not have been granted an option in his new job category on the Grant Date, the number of remaining Option Shares shall be reduced to zero. If the Optionee would have been granted an option for fewer option shares on the Grant Date, the remaining Option Shares, if any, shall equal the number of shares that would have been granted to the Optionee in his new job category on the Grant Date less the number of Option Shares previously purchased by the Optionee under the Option before his demotion.

3.           Vested Option Shares . Notwithstanding Paragraph G of the Award, the Service Condition will be deemed satisfied as to all or a portion of the Option Shares if the Optionee provides Continuous Service to the Company and/or any affiliate following the Grant Date through the date of any of the earlier events listed below:

(a)        (i) In the event of a Termination of Employment due to Disability (as defined in the Employment Agreement) or death, (ii) upon attainment of age 65 or upon retirement after satisfaction of the Rule of 90 under the Ruby Tuesday, Inc. Executive Supplemental Pension Plan, or (iii) in the event of a Termination of Employment by the Company or an affiliate without Cause (as defined in the Employment Agreement), all Option Shares shall become Vested Option Shares on the date of such event.

(b)        In the event of a Change in Control (as defined in the Employment Agreement), all Option Shares shall become Vested Option Shares on the date specified by the Committee prior to a Change in Control, unless the Committee elects to cash out the Option in any manner consistent with Section 3.1(d) of the Plan.

4.          Early Expiration of Option Period. The Option Period commences on the Grant Date and with respect to Vested Option Shares generally ends on the seventh anniversary of the Grant Date. However,

with respect to Vested Option Shares, the Option Period shall expire on an earlier date as follows:

(a)         in the event of Optionee’s involuntary Termination of Employment without Cause (as defined in the Employment Agreement) (i) the Option Period shall expire ninety (90) days following that Termination of Employment if the vesting of the Option is solely attributed to such Termination of Employment; and (ii) the Option Period shall expire one (1) year following that Termination of Employment if the vesting of the Option occurred prior to such Termination of Employment; and

(b)         in the event of Optionee’s involuntary Termination of Employment with Cause (as defined in the Employment Agreement), the Option Period shall expire fifteen (15) days following that Termination of Employment.

In the event of Optionee’s voluntary Termination of Employment or Optionee’s involuntary Termination of Employment for Cause (as defined in the Employment Agreement) in either case before the Option Shares become Vested Option Shares, this Option shall expire immediately upon such event without becoming exercisable.

5.           Purchase Price . Payment of the Purchase Price for all Option Shares purchased pursuant to the exercise of an Option shall be made in cash or, alternatively, as follows:

(a)        by delivery to the Company of a number of shares of Common Stock which have been owned by the Optionee for at least six (6) months prior to the date of the Option’s exercise, having a Fair Market Value, as determined under the Plan, on the date of exercise either equal to the Purchase Price or in combination with cash to equal the Purchase Price; or

(b)        by receipt of the Purchase Price in cash from a broker, dealer or other “creditor” as defined by Regulation T issued by the Board of Governors of the Federal Reserve System following delivery by the Optionee to the Committee of instructions in a form acceptable to the Committee regarding delivery to such broker, dealer or other creditor of that number of Option Shares with respect to which the Option is exercised; provided, however, any such cashless exercise must be effected in a manner consistent with the restrictions of Section 13(k) of the Securities Exchange Act of 1934 (Section 402 of the Sarbanes-Oxley Act of 2002).

6.           Withholding . The Optionee must pay to the Company the full amount of the federal, state and local tax withholding obligation arising from the exercise of the Option.

(i)         by the Optionee making a Withholding Election on or prior to the date on which the amount of tax required to be withheld is determined (the “Tax Date”) to reduce the number of Option Shares to be issued upon exercise by the whole number of shares of Common Stock having a Fair Market Value equal to the amount of withholding tax;

(ii)        by the Optionee making a Withholding Election and delivering to the Company before the Tax Date a whole number of shares of Common Stock that the Optionee has owned for at least six (6) months having a Fair Market Value equal to the amount of withholding tax; or

(iii)      by the Optionee making a Withholding Election prior to the Tax Date to have a broker, dealer or other “creditor” (as defined by Regulation T issued by the Board of

Governors of the Federal Reserve System) deliver the amount of tax withholding due in cash to the Company after the Optionee has delivered to the Committee instructions acceptable to the Committee regarding the delivery of the number of Option Shares being exercised to such broker, dealer or other creditor provided, however, that any such delivery must be effected in a manner consistent with the restrictions of Section 13(k) of the Securities Exchange Act of 1934 (Section 402 of the Sarbanes-Oxley Act of 2002).

(b)        A Withholding Election must be made substantially in the form attached as Exhibit 2 and may be made only if:

(i)         the Optionee delivers to the Company a completed written Withholding Election no later than on the Tax Date;

(ii)        the Withholding Election is irrevocable and satisfies the requirements of the exemption provided under Rule 16b-3 of the Securities Exchange Act of 1934; and

(iii)      the Optionee delivers to the Company the Withholding Election on a date determined by the Committee (i.e., at least six (6) months prior to the Tax Date or prior to the Tax Date and in any ten-day period beginning on the third day following the release of the Company’s quarterly or annual summary statement of sales and earnings), if the Optionee is considered by the Committee to be subject to Section 16 of the Securities Exchange Act of 1934.

The Committee may give no effect to any Withholding Election.

7.           Rights as Shareholder . Until the stock certificates reflecting the Option Shares accruing to the Optionee upon exercise of the Option are issued to the Optionee, the Optionee shall have no rights as a shareholder with respect to such Option Shares. The Company shall make no adjustment for any dividends or distributions or other rights on or with respect to Option Shares for which the record date is prior to the issuance of that stock certificate, except as the Plan or this Award otherwise provides.

8.           Restriction on Transfer of Option and of Option Shares . The Option evidenced hereby is nontransferable other than by will or the laws of descent and distribution, and shall be exercisable during the lifetime of the Optionee only by the Optionee (or in the event of his Disability, by his personal representative) and after his death, only by his legatee or the executor of his estate.

(a)        The num