Monday, March 11, 2019

Papa John's Founder Schnatter To Exit Board In Settlement

(Reuters) - Papa John’s founder John Schnatter is leaving its board of directors as part of a settlement resolving a bitter dispute for control of the world’s third-largest pizza chain.

FILE PHOTO: The Papa John's store in Westminster, Colorado, U.S. August 1, 2017. REUTERS/Rick Wilking
The company said in a regulatory filing on Tuesday it would co-operate with Schnatter to find a mutually acceptable independent director who would not be affiliated with Schnatter or hedge fund investor Starboard Value LP, which owns a nearly 10 percent stake in the restaurant chain.
Schnatter, who owns about 30 percent of the company’s shares, would resign from the board if the independent director is appointed before the annual stockholder meeting slated for May, Papa John’s said. Schnatter stepped down as chairman last summer, following reports he had used a racial slur on a media training conference call.
Schnatter has filed several lawsuits against the company in a bid to regain control of the company he founded in his father’s tavern. In January, he claimed a victory when a court ordered the board to give him some internal documents, including text messages related to his firing, which Papa John’s had until then refused to share.
After learning that Papa John’s would not nominate him to its board this year, Schnatter last Friday submitted a letter nominating himself, according to a regulatory filing and a person familiar with the matter. The moves laid the groundwork for a costly and distracting proxy battle that the settlement now helps avoid, the person said.
As part of the agreement, Papa John’s has agreed to share with Schnatter all of the company’s records, giving him the option to sue if those documents revealed wrongdoing by the company, Schnatter said in a statement
Schnatter, in return, has agreed to dismiss lawsuits he filed against the company.
“(I am) thankful that I’ve been able to resolve these important issues, and that we can all focus on the company’s business without the need for additional litigation,” Schnatter said.
The restaurant chain agreed to remove a provision of a poison pill, a stockholder rights plan that can dilute shares, preventing Schnatter from speaking with other shareholders about the company.
Papa John’s also agreed to relinquish the requirement that Starboard vote in favor of the incumbent board.
Last week the pizza chain said its North American same-restaurant sales fell 7.3 percent in 2018 and that sales would lag into the first half of 2019.
Its shares were up about 3 percent in morning trade on Tuesday.
Reporting by Soundarya J and Siddharth Cavale in Bengaluru and Jessica DiNapoli in New York; Editing by Arun Koyyur and Susan Thomas

Rams Don't Pick Up Option On Veteran C John Sullivan

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NFL Rumors: Should Jets’ Mike Maccagnan Pursue John Sullivan After Rams Decline Option? Why Veteran Center Would Be Disastrous Choice

The Jets are in the market for a new starting center after letting Spencer Long walk at the start of February. So far, pending free agents Matt Paradis and Mitch Morse have emerged as the leading options for general manager Mike Maccagnan to fill that hole.
But on Tuesday, a new option hit the table.
So would the Jets be smart to pursue Sullivan as their potential replacement?
Frankly, the move wouldn’t make much sense. Sure, Sullivan has reliably been on the field, despite his age, for the past two seasons. And outside of a troublesome 2016 season with the Redskins, Sullivan has rarely missed a game dating back to his rookie season in 2008. In fact, he’s played 153 of them during that time.
But playing and playing well are two vastly different things. And in 2018, Sullivan was a perfect example of that.
While the Rams had one of the NFL’s best offensive lines en route to the Super Bowl last season, Sullivan was quite clearly the weak link blocking for Todd Gurley and Jared Goff. He received a 51.7 overall grade (out of 100) from, which ranked 34th among centers who played at least 20 percent of their team’s snaps.
For context, Long was the 38th ranked center on that list with a 45.4 grade.
Sullivan’s overall grade wasn’t tanked by a single deficiency, either; he was equally poor in both run and pass blocking, receiving grades of 52.3 and 55.7 in those categories, respectively.
By comparison, Morse was the NFL’s 15th-best center last season with a 68.3 grade (60.8/81.2 run/pass split). Paradis was even better in his injury-shortened season. He graded out second in the league with a 79.0 overall score (77.4/78.6 split).
Of course, there’s plenty of teams looking to track down offensive line upgrades, so the Jets aren’t going to be the only team in play for Morse and Paradis. That means there’s a chance they won’t get either player. So Sullivan can certainly be a backup option, but the numbers clearly show that both Morse and Paradis are more productive when they’re on the field.
The only caveat: Paradis, as already mentioned, was injured most of last season. Morse has battled injuries off-and-on for two seasons. So if the Jets aren’t sold on the health of those two players, then perhaps Sullivan could look more attractive. But betting on a 33-year-old lineman to stay healthy is certainly risky business, too.
Matt Stypulkoski may be reached at Follow him on Twitter @M_Stypulkoski. Find Jets on Facebook.


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