Struggling pizza chain Papa John's International has reached an agreement with ousted founder John Schnatter, who agreed to step down from the company's board in exchange for helping pick his replacement.
Schnatter, who resigned as CEO in December 2017 and then as chairman last year after using a racial slur during a conference call, holds an approximately 31 percent stake in the company.
Schnatter will resign from the board once a new independent director is appointed.
He also agreed to drop a lawsuit filed in Delaware in which he claimed that the company failed to disclose documents he asked for after resigning as chairman.
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The agreement comes after activist investor Starboard Value LP made a $200 million investment Papa John's last month and its chief executive, Jeffrey Smith, became board chairman and named another candidate to the board.
Schnatter founded Papa John’s in 1984 and has a personal net worth estimated at $800 million, according to Forbes. Papa John’s has more than 3,000 store locations in the U.S.