John Schnatter, founder and largest shareholder of Papa Johns International, Inc. (NASDAQ: PZZA), today announced that he has entered into an agreement with the Company that resolves his lawsuit currently pending in Delaware.
Under the terms of the agreement, the Company has agreed to promptly remove the Acting in Concert provision of the Poison Pill rights plan adopted by Papa Johns Board of Directors in July 2018, which severely and improperly restricted the ability of shareholders to communicate with each other. Similarly, the Company will drop the requirement that the Starboard Entities vote in favor of the incumbent board members.
With those provisions removed, Mr. Schnatter has agreed to dismiss without prejudice the lawsuit he filed in the Delaware Court of Chancery, to avoid a costly and expensive proxy contest by identifying a mutually acceptable independent director to serve on the Board in his place, and to withdraw his notice to nominate himself for election to the Board at the 2019 annual meeting of shareholders and to step down from the board.
Mr. Schnatter commented, I founded Papa Johns, built it from the ground up and remain its largest shareholder. I care deeply about its employees, franchisees, and investors and am thankful that Ive been able to resolve these important issues, and that we can all focus on the Companys business without the need for additional litigation.
The Agreement also confirmed that the Company would provide Mr. Schnatter all of the books and records as ordered by the Delaware Court of Chancery, and that Mr. Schnatter retains his ability to assert new legal claims if those documents reveal additional wrongdoing on the part of Company insiders.
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Mr. Schnatter is eager to work with Jeff Smith and Starboard to identify a new member of the Board. Im happy that we were able to enter into this agreement and allow the new leadership being implemented by Jeff Smith and Starboard to help Papa Johns regain its strength and market position, said Mr. Schnatter.
Mike Sitrick or Terry Fahn
Sitrick And Company