Papa John's founder John Schnatter asked the board of directors to remove a provision adopted to thwart takeover attempts that he says prevents him from working with other investors who may be interested in the company.
The so-called wolf-pack provision is tucked inside a "poison pill" the board adopted in July to restrict Schnatter, who already owns almost 31 percent of the company, from acquiring more equity. The poison pill is intended to defend the company against a hostile takeover if anyone amasses a stake of more than 15 percent without board approval.
Schnatter said several potential outside investors have expressed an interest in speaking to him about the company, but the provision "precludes me from discussing the company, my investment in the company or the activities or plans of potential investors or shareholders with them or anyone else with an interest in the company," according to a letter dated Thursday and sent to the board and filed with the Securities and Exchange Commission on Monday.
A "wolf pack" is a group of activist investors working together to gain control of a corporate board, according to the Yale Law Journal. The provision is intended to prevent a dominant investor like Schnatter from teaming up with other investors to regain control of the company. The former CEO and chairman was ousted from the company and barred from its corporate offices in July after a racially charged slur Schnatter made on a conference call came to light that month.
"As detailed when it was adopted, the rights plan does not prevent the board from considering any offer that it considers to be in the best interest of Papa John's stockholders," company spokeswoman Madeline Chadwick said in an email. "The plan also reduces the likelihood that any person or group gains control of Papa John's without paying an appropriate control premium to all of the company's stockholders."
The company's shares have tumbled by more than 24 percent over the last 12 months, making it an attractive target to outside bidders.
The poison pill adopted by the board doubles the share price for anyone who attempts to amass more than 15 percent of the company's shares without board approval. Since Schnatter already owned about 30 percent when the shareholder plan was adopted, the provision kicks in for him above 31 percent. He currently owns 30.9 percent of the company, according to an SEC filing on Thursday.
Schnatter has repeatedly said he has no confidence in the company's current management and has filed two lawsuits against the board, one seeking books and records related to his ouster and the other accusing the board of breaching its duties to serve shareholders.
Schnatter said the wolf-pack provision unreasonably curtails his rights as a shareholder and may violate Delaware law.
"It precludes shareholders from holding any substantive discussions about the company because of the threat of crippling dilution of their ownership interest in the company," he said.
Terry Fahn, a spokesman for Schnatter, declined to comment.
The company's shares were up less than 1 percent in trading Monday.
—CNBC's Lauren Hirsch and Sarah Whitten contributed to this article.