SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Item 1.01. Entry into a Material Definitive Agreement..
On May 11, 2021, Papa John’s International, Inc. (the “Company”) entered into a Share Repurchase Agreement (the “Repurchase Agreement”) with certain funds affiliated with, or managed by, Starboard Value LP (each, a “Seller” and collectively the “Sellers”), pursuant to which (i) the Company is repurchasing from the Sellers 78,387 shares of the Series B Convertible Preferred Stock, par value $0.01 per share, of the Company (“Series B Preferred Stock”) and (ii) the Sellers have agreed to convert the remaining 171,613 shares of Series B Preferred Stock that they own into 3,458,360 shares of the Company’s common stock, par value $0.01 per share (“Common Stock”), pursuant to the terms of the Certificate of Designation of the Series B Preferred Stock. As consideration for the transactions contemplated by the Repurchase Agreement, the Company will pay the Sellers aggregate cash consideration of approximately $183.9 million. The Repurchase Agreement contains customary representations, warranties, and conditions to closing. The transactions contemplated by the Repurchase Agreement are expected to close on or about May 13, 2021. The Company intends to use cash on hand and borrowings under the Company’s existing revolving credit facility to fund the transactions contemplated by the Repurchase Agreement.
Upon the consummation of the transactions contemplated by the Repurchase Agreement, the Sellers will collectively own approximately 9.5% of the outstanding shares of the Company’s Common Stock.
The repurchase of the Series B Preferred Stock from the Sellers is separate from and does not utilize any part of the Company’s existing $75 million share repurchase authorization for Common Stock.
The transaction was negotiated by an independent committee of the Company’s Board of Directors formed for the purpose of evaluating a possible transaction involving the Series B Preferred Stock, and was approved by the full Board of Directors upon such independent committee’s recommendation. The terms of the Governance Agreement, dated February 4, 2019, among the Company and Sellers will not be affected by the repurchase and conversion.
The foregoing summary of the Repurchase Agreement is qualified in its entirety by the full text of the Repurchase Agreement, a copy of which is filed herewith as Exhibit 10.1 and incorporated herein by reference.
Item 7.01 Regulation FD Disclosure.
On May 12, 2021, the Company issued a press release to announce the transactions contemplated by the Repurchase Agreement. A copy of the press release is furnished herewith as Exhibit 99.1.
Item 9.01 Financial Statements and Exhibits.
|10.1||Share Repurchase Agreement, dated May 11, 2021, by and among the Company and the sellers listed on the schedule of sellers attached thereto|
|99.1||Press Release of Papa John’s International, Inc. issued on May 12, 2021|
|104||Cover Page Interactive Data File (embedded within the Inline XBRL document)|
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|PAPA JOHN'S INTERNATIONAL, INC.|
|Date: May 12, 2021||/s/ Ann B. Gugino|
|Ann B. Gugino|
|Chief Financial Officer|