News

Pizza Inn postpones annual meeting for a second time

January 6, 2004

THE COLONY, Texas—The annual meeting of shareholders of Pizza Inn, Inc. has been moved from Jan. 21, to Feb. 11, signaling increasing tension between the chain's board and its largest shareholder, Dallas-based Newcastle Partners.

According to a Securities and Exchange Commission (SEC) filing, on Jan. 6, Pizza Inn's board decided to postpone the meeting to "allow sufficient time for all shareholders to receive and consider the Company's proxy solicitation materials and to vote prior to the Annual Meeting."

The meeting originally was scheduled for December but was moved to January, when Newcastle began a proxy solicitation designed to install a trio of its own nominees to Pizza Inn's board.

Newcastle, which owns approximately 36 percent of Pizza Inn's shares outstanding, also wants shareholder support for the amendment of several company bylaws. According to SEC filings, the bylaws were changed by the company's board just days after Newcastle bought a 35 percent share of the pizza chain from former CEO Jeff Rogers in December 2002.

In a December 2003 SEC filing, Newcastle CEO Mark Schwarz accused Pizza Inn's top executives of making the bylaw changes without Newcastle's awareness and as a means of protecting their jobs.

Pizza Inn has argued that if Newcastle gains the board spots it's seeking, and should shareholders approve the bylaws change, based on its executives' employment contracts, a "change of employment" would occur, and those executives would receive a total of $7.4 million in parachute payouts.

Newcastle disputes the claim that a change of control would occur..

Read related Pizza Inn stories ...
* Battle for the Board at Pizza Inn
* SEC filing details battle for Pizza Inn board
* Pizza Inn reschedules annual meeting as proxy battle looms
* Largest Pizza Inn shareholder wants to expand board with two pizza veterans
* Pizza Inn's Q1 '03 comp-sales drop 4.8%