LOUISVILLE, Ky. — Pizza Inn's new chief executive and president, Tim Taft, will earn a $1 salary in his first year at the company, but his contract grants him the right to buy 5 percent of the chain immediately.
According to a regulatory filing, Pizza Inn granted Taft non-qualified options to buy 500,000 shares of its common stock based on the March 31 share price of $2.50. (Pizza Inn's total outstanding shares number 10 million.) The purchase price would be $1.25 million, but as of April 5, no sizeable acquisition of the thinly traded stock had been made.
Should Taft buy the allotted portion of stock, he can exercise 50,000 shares immediately at the current market price. He also will be allowed to exercise scheduled amounts of stock on future employment anniversaries.
According to the filing, Taft's $1 salary commitment (read also New Pizza Inn CEO eager to start turnaround) will end after one year of service. On his first anniversary, the board will determine a new annual salary of no less than $300,000.
He is eligible for unspecified discretionary bonuses this year, should the board grant them. In his second year at the helm, his contract calls for a minimum $200,000 annual bonus.
Taft must relocate to within 50 miles of the chain's headquarters in The Colony, Texas, by June 1, 2006. He currently resides in Austin, Texas.
Taft's predecessor, Ronald Parker, was fired in December. In 2003 he earned $1.1 million, including a guaranteed minimum bonus equal to half his salary (read also Will Parker's departure from Pizza Inn end an era of greed?). According to regulatory filings, Parker currently owns 8 percent of Pizza Inn's outstanding shares.