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Papa John's Reaches Settlement With Founder John Schnatter

Papa John's International Inc. (PZZA) has reached a settlement agreement with John Schnatter that will resolve the ongoing dispute for control of the pizza chain.

In a regulatory filing on Tuesday, Papa John's said it would co-operate with Schnatter to find a mutually acceptable independent director, who would not be affiliated with Schnatter or hedge fund Starboard Value LP.

Schnatter, who owns about 30 percent of the company's share, would resign from the board, if the independent director is appointed before the 2019 annual stockholder meeting, the company said.

Schnatter was ousted as chairman last summer, following reports he had used a racial slur on a media training conference call. He filed several lawsuits against the company in a bid to regain control of the company.

Meanwhile, Schnatter has agreed to dismiss two lawsuits,: one against the company in the Delaware Chancery Court without prejudice and one in Jefferson County, Kentucky, related to a sublease agreement with prejudice.

Last month, Papa John's agreed to an investment of up to $250 million from Starboard value LP in return for a nearly 10 percent stake. The company also named the hedge fund's CEO Jeffrey Smith as its chairman.

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