THE COLONY, Texas — Despite writing questionably large parachute payouts into their labor agreements nearly three years ago, two Pizza Inn executives have new contracts.
According to a regulatory filing, chief financial officer, Shawn Preator, and senior vice president of franchise operations and concept development, Ward Olgreen, signed new labor agreements with the 400-unit chain on April 22. Each man's compensation remains largely unchanged from 2004, but by signing the new contracts, both agreed to terminate previous deals inked in late 2002.
Those contracts are at the center of a more than 2-year-old maelstrom (read Greed between the lines) resulting in the 2004 firing of chief executive and president Ronald Parker and the resignation of vice president and legal counsel Keith Clark.
According to numerous regulatory filings, in December of 2002, the four men put Pizza Inn at great financial risk by collaborating to rewrite their employment agreements to include huge payouts to each should the company undergo a change of control.
New appointments in February of 2004 did change Pizza Inn's board makeup (read also Newcastle gains control of Pizza Inn board), but the company's counsel determined later that May that no change of control occurred. Clark objected to the ruling and resigned several weeks later. He and Pizza Inn remain in arbitration over his $760,000 parachute payout (read Pizza Inn SVP, Clark, to resign in July).
After Parker was fired last December over a salary dispute (read Parker, fallen Pizza Inn CEO, added to compensation lawsuit), his lawyers stated he would seek his $5.4 million payout. The case remains in discovery.
Had a change of control occurred, Olgreen would have received $630,000, while Preator would have gotten $597,000 — amounts several times larger than their salaries.
Preator's new agreement expires on Dec. 31, 2005, and will pay him no less than $150,000 salary and a $30,000 bonus. Olgreen's deal expires on the same date, and will pay him a salary no less than $168,000 and a $33,600 bonus.