March 5 (UPI) -- Papa John's International reached a settlement with founder John Schnatter, who will resign from the company's board of directors once a new independent director is appointed.
The company and Schnatter will work together to find a new board member who is not affiliated with Schnatter, a Securities and Exchange Commission filing reads.
Papa John's wants to have the new board member in place before its 2019 annual shareholders meeting. If no appointment is made by that time, Schnatter's position on the board will expire at the meeting and his lawsuits against the company will be dismissed. He will remain a major shareholder.
Also as part of the settlement, Papa John's will amend its agreement with activist investor Starboard Value LP so it can't vote on aa new director. Ordinarily, Starboard, which invested $200 million in the pizza chain last month, would vote its shares on any board of director appointment.
Starboard has the option to invest another $50 million by March 29.
He filed two lawsuits against Papa John's after his dismissal as CEO. The first suit targeted the company's records related to his departure.
The suit second accused the company's new CEO Steve Ritchie and the board of causing harm to the company with "repeated and ongoing breaches to the duties of loyalty and care they owe to the company."