The protracted battle between Papa John's and its former CEO appears to be coming to a close. CNBC reports the pizza chain has reached a settlement agreement with John Schnatter that dictates Schnatter, who owns about a third of the company's shares, will help pick an independent director for the board, then resign from the board himself if that person is put in place before the annual stockholders meeting this year (last year it was held in early May). Schnatter, who stepped down as chairman last summer—he'd stepped down as CEO the year before—after he admitted using a racial slur during a May conference call, also agreed to nix two lawsuits, one of which Fox Business says was centered on documents Schnatter demanded from the company after he resigned as chairman.
The new independent director won't be tied to either Schnatter or hedge fund Starboard Value, which owns a 10% stake in the company. Starboard CEO Jeffrey Smith was named Papa John's chair last month after Starboard agreed to inject up to $250 million into the pizza firm. Per a securities filing, if a new director isn't appointed by the time the shareholders meeting rolls around, Schnatter's term will simply expire at the meeting, CBS News reports. In a statement to Bloomberg, Schnatter says he's glad to be "able to resolve these important issues" and is "happy that we were able to enter into this agreement and allow the new leadership ... to help Papa John's regain its strength and market position." (It initially seemed Schnatter wasn't going to go quietly.)