Papa John’s founder Schnatter to resign

Papa John’s has just charted a path forward without Papa John.

Embattled pizza chain Papa John’s International Inc. said founder John Schnatter will resign from the board, bringing to a close months of tensions in the management ranks.

Schnatter, who still owns almost one-third of the shares, will help the company identify a mutually acceptable independent director to take his place, the company said Tuesday in a filing. The founder also agreed to dismiss a Delaware lawsuit related to his exit from the chairman’s seat. His term as director will expire at the 2019 annual meeting or when the independent director is appointed, whichever comes first.

The shares rose as much as 3.6 percent in Tuesday trading before paring gains. The stock was up 0.2 percent as of 9:37 a.m. in New York.

Schnatter said in an emailed statement that he’s thankful to be “able to resolve these important issues.” He said the board’s willingness to remove the “acting in concert” provision from the poison pill plan that made it hard for him to talk to other shareholders was key to his decision to dismiss the lawsuit. Now “we can all focus on the company’s business without the need for additional litigation,” he said.

The settlement comes about a month after the pizza chain landed a $200 million cash infusion from activist hedge fund Starboard Value LP, which put its chief executive officer, Jeff Smith, in charge of Papa John’s. Under Smith’s guidance, Papa John’s is planning new marketing to help reverse a sales slump that worsened after the founder used a racial slur on a conference call. He has said the comment was taken out of context.