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Goodbye, (Mr.) Ruby Tuesday…

The headline, of course, refers to S. E. (“Sandy”) Beall, III, who opened the first Ruby Tuesday (RT) restaurant in 1972 in Knoxville, Tennessee. The location was close to the University of Tennessee campus, which no doubt appealed to the hungry student set.

Besides being the founder of Ruby Tuesday, Beall has been its longtime chairman, chief executive, and president. On Wednesday, the company announced that Beall plans to retire, and yesterday at 5:26 p.m. (squeaking in just before the SEC stopped accepting filings for the day), the company filed an 8-K that gives us an idea of what this will mean for Beall and Ruby Tuesday’s bottom line.

According to yesterday’s filing, Beall entered into a Transition Agreement with Ruby Tuesday. While the actual agreement hasn’t been filed yet, the company did include a summary of the terms, which seem pretty generous. For one, Beall will continue to collect his regular salary of $1.1 million for as long as he’s employed. He’s also eligible to receive a pro-rated bonus for the fiscal year ending June 4, 2013, although the amount Beall receives will be “based on the date and circumstances of [his] departure.” And, finally, Ruby Tuesday will pay him “the basic severance to which he is eligible under the Company’s executive severance plan”, which adds up to $2.2 million.

The filing adds:

“The Transition Agreement confirms the Company’s obligations with respect to Mr. Beall’s existing equity awards, providing that any remaining service-vesting condition of his equity awards has been fully satisfied and the performance-vesting condition applicable to certain of his awards will continue to apply. He will have the remaining term of his stock options during which to exercise such options.”

The proxy that Ruby Tuesday filed in August, 2011 disclosed that the value of Beall’s restricted stock and stock option awards — had he retired in May, 2011 — was nearly $2.39 million. The same document listed the present value of his pension at the time as almost $8.07 million.

Beall has weathered the ups and downs of his business in the past forty years. He sold the Ruby Tuesday concept to Morrison Restaurants, Inc. Later, in 1996, Morrison spun off Ruby Tuesday as a separate company and changed its own name to that of the popular Beatles Rolling Stones song. With Beall still at the helm, Ruby Tuesday expanded to 740 company-owned Ruby Tuesday restaurants and 85 franchised restaurants, according to the company’s press release.

But the restaurant business is never easy, and Ruby Tuesday is no exception. The stock price has fallen quite a bit since we last footnoted about the company in 2008 (in fact, it has dropped nearly 74% in the past 5 years), and the company has written off losses and closed restaurants in recent years.

Beall, whose age was listed as a relatively young 61 in the most recent 10-K, said in the press release that “I look forward to taking some time off and to pursuing personal ventures.” Sounds like a nice plan to us.

Image source: Sunfox via flickr

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