Dec. 14, 2004
THE COLONY, Texas — Embattled Pizza Inn CEO Ronald Parker was officially fired on Dec. 11 by the 410-unit chain's board of directors. PizzaMarketplace broke the news of Parker's departure on Dec. 1 (read CEO Parker is out at Pizza Inn), when numerous sources close to the company said he had stepped down. Attempts to get an official confirmation from the company, however, went unanswered.
According to a Dec. 14 news release, Parker was terminated for violating his employment agreement, but no official details were provided.
Parker had held the post since August of 2002.
In Parker's absence, Pizza Inn's board of directors appointed Rod McDonald, its current secretary and general counsel, as acting chief executive officer. McDonald joined Pizza Inn in 1997.
"We will immediately begin looking for an outstanding leader to serve as the permanent chief executive officer of Pizza Inn," said Mark Schwarz, Pizza Inn's board chair. Schwarz also is president of Newcastle Partners, which owns a 36 percent (majority) share of Pizza Inn.
It appears, however, Parker won't go down without a fight. According to a story in the Dec. 13 Dallas Morning News, Parker's attorney, Rogge Dunn, said his client was wrongfully fired and would pursue litigation or arbitration to obtain "a very large and significant sum" to compensate for the ouster. (Read also Will Parker's departure from Pizza Inn end an era of greed?)
As detailed in numerous filings with the Securities and Exchange Commission, Parker's leadership in changing his employment contract — plus the contracts of three other executives — to include hefty severance packages, has long been a bone of contention between him and Newcastle Partners.
In December of 2002 — just days after Newcastle purchased 27 percent of Pizza Inn from Parker's former boss, CEO C. Jeffrey Rogers — a hastily called board meeting occurred in which Parker's employment agreement was rewritten to state he would receive a $5.4 million lump-sum payout should Pizza Inn's board undergo a change of control (read also Battle for the Board at Pizza Inn).
In February of 2004, Pizza Inn's shareholders overwhelmingly approved the installation of two Newcastle-nominated board members, but the company ruled in April that no change of control occurred.
Still, said Dunn, because Parker's employment agreement was approved by the board, the company still owes him the stated severance. "Now they've changed their position. They've come along and fired him without cause, and they don't want to pay him what he's owed under the contract."
Bill Brewer, a Dallas attorney representing Pizza Inn, told the DMN Parker was fired with cause and that relieves the company of the stated severance burden.
"The board believes that ... Mr. Parker [and other executives] were guilty of a scheme designed to entrench themselves and abuse the company's assets," Brewer said.
Pizza Inn also announced that its annual meeting of shareholders, originally scheduled for Dec. 15, has been postponed, and that a new date is forthcoming.