It seems the dramatic legal battle within the Papa John’s board may finally end.
According to an SEC filing, John Schnatter will resign from the board of directors once an independent director can be found to replace him or by the 2019 annual meeting. Schnatter will also drop two lawsuits against the company and will withdraw his bid to be re-elected to the board at the annual meeting.
The company will also remove the so-called “poison pill” that it adopted in July to restrict Schnatter from communicating with other board members.
The agreement seems to put an end to a nine-month ordeal that started with a report that Schnatter used a racial slur on a media training call.
There are seven stipulations for the new independent director outlined in the agreement. The first being that it he or she is not the founder; it also requires the director to be “independent” pursuant to the Nasdaq Stock Market listing rules and is independent of the founder and Starboard, the activist investing fund that invested $200 million in the company and took three spots on the board.
Schnatter, who still owns more than 30 percent of the company shares, said he was thankful it’s all over.
"I founded Papa John's, built it from the ground up and remain its largest shareholder. I care deeply about its employees, franchisees and investors and I'm thankful that I've been able to resolve these important issues," Schnatter said in a statement to the New York Times.
The company’s annual meeting is set to take place on April 30, 2019.