Exhibit 10.1

 

LOGO [g917935potbelly_logo.jpg] EXECUTIVE EMPLOYMENT CONTRACT

THIS EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into
as of May 1, 2015 (the “Effective Date”) by and between Potbelly Corporation, a
Delaware corporation (hereinafter referred to as “Company”), and Julie
Younglove-Webb, an individual (hereinafter referred to as “Executive”).

Statement of Purpose

WHEREAS, Executive is currently employed by Company as a Vice President; and

WHEREAS, the Company desires to promote Executive to Senior Vice President,
Operations and Executive desires to accept such employment on the terms and
conditions set forth below; and

WHEREAS, Company and Executive desire to definitively set forth their agreement
with respect to Executive’s employment; and

WHEREAS, Potbelly Illinois, Inc. and Potbelly Sandwich Works, LLC are direct or
indirect subsidiaries of the Company;

NOW, THEREFORE, in consideration of the Statement of Purpose, the terms and
provisions of this Contract and other good and valuable consideration, the
parties hereto mutually consent, covenant, represent, warrant, and agree as
follows:

1. Term, Employment and Duties.

(a) Term. The “Term” of this Agreement shall commence on the Effective Date and
shall terminate on the date the Executive’s employment with Company and its
affiliates terminates for any reason (“Termination Date”). Executive shall at
all times be an at-will employee and nothing in this Agreement shall constitute
or be evidence of any agreement or understanding, express or implied, that
Executive has a right to continue to be employed by Company for any period of
time or any specific rate of compensation.

(b) Title and Duties. Effective as of the Effective Date, Company hereby agrees
to continue to employ Executive, and Executive agrees to continue in the employ
of Company, as Company’s Senior Vice President, Operations. Executive shall also
have the commensurate titles and positions with such subsidiaries of affiliates
of Company as determined by Company and shall serve in such positions without
additional compensation. Executive shall have the duties, responsibilities and
authority customary for her positions and shall perform such other duties
consistent with such positions as may be assigned to Executive, from time to
time, by Company.

(c) Performance of Duties. Executive shall devote Executive’s full business
time, energy, loyalty, and ability exclusively to the business, affairs, and
interests of Company and its affiliates, and shall use Executive’s best efforts
and abilities to promote the interests of Company and its affiliates and to
perform the services contemplated by this Agreement and agrees that she will
perform her duties faithfully and efficiently subject to the directions of the
CEO. Without the prior approval of the Company’s CEO or the executive to whom
she reports, Executive shall not, during the Term, directly or indirectly,
render any other employment or consulting activities or services, including as a
director, to any other person, firm, corporation, or other entity; provided,
however, that, to the extent that the following activities do not conflict with
or detract from the performance by Executive of Executive’s duties, Executive
may act as a director of, and may also engage in activities involving,
charitable, educational, religious, and similar types of organizations, and
similar types of activities.

(d) Confidentiality, Non-Competition, Non-Interference and Intellectual
Property. Executive hereby acknowledges and confirms that the Executive
Confidentiality and Non-Compete Agreement signed by Executive and effective as
of the Effective Date is hereby incorporated into and forms a part of this
Agreement.

 

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EXECUTIVE EMPLOYMENT AGREEMENT

 

2. Termination of Employment.

(a) Termination Date. Executive’s Termination Date shall occur upon termination
by Company for any reason or no reason or by Executive for any reason or no
reason, including any of the following: (i) Executive’s death; (ii) Executive
being disabled by reason of physical and mental infirmity or both, thereby
rendering Executive unable to satisfactorily perform Executive’s duties under
this Agreement (a “Disability”), said Disability to be determined in good faith
by the CEO in consultation with no fewer than two (2) accredited physicians
selected by the CEO and reasonably approved by Executive in the event that
Disability is disputed; (iii) termination of Executive’s employment by Company
with or without Cause (as defined below) or (iv) Executive’s resignation with or
without Good Reason (as defined below). Executive’s Termination Date shall be
considered to be on account of a “Qualifying Termination” if the Termination
Date occurs due to (1) termination by Company without Cause, or (2) termination
by Executive with Good Reason.

(b) Cause. The term “Cause” as used in this Agreement shall mean an act, action,
or series of acts or actions, or omission or series of omissions, by Executive
which constitute or result in: (i) intentional misrepresentation of material
information by Executive in Executive’s relations with Company; (ii) Executive’s
indictment (or its equivalent) for the commission of a crime by Executive that
constitutes a felony; (iii) commission of an act involving moral turpitude;
(iv) the material breach or material default by Executive of any of Executive’s
written agreements with Company or obligations under any material provision of
this Agreement or any written policy of Company (that remains unremedied within
thirty (30) days after notice to Executive); (v) the commission of fraud or
embezzlement on the part of Executive; (vi) failure to comply with any lawful
written direction of Company’s Board of Directors (the “Board”) (that, if
capable of cure without damage to Company, remains unremedied within thirty
(30) days after notice to Executive); or (vii) willful action taken for the
purpose of harming Company or any of its affiliates. For purposes of clause
(vii) of this Paragraph 2(b), no act or failure to act, on the part of
Executive, shall be considered “willful” unless it is done or omitted to be
done, by Executive in bad faith and without reasonable belief that Executive’s
action or omission was in the best interest of Company. An act, or failure to
act, based upon authority given pursuant to a resolution duly adopted by the
Board shall be conclusively presumed to be done, or omitted to be done, by
Executive in good faith and in the best interest of Company.

(c) Good Reason. The term “Good Reason” as used in this Agreement means the
occurrence, without Executive’s consent, of (i) a material reduction in either
Executive’s rate of Base Salary (as defined in Paragraph 3(a)) or Executive’s
target or maximum bonus percentage (other than a reduction which does not exceed
the percentage reduction of an across the board salary or bonus reductions
(target, actual or maximum) for management employees); (ii) any material
reduction in the position, authority, or office of Executive with respect to
Company, or in Executive’s responsibilities or duties for Company; (iii) any
action or inaction by Company that constitutes a material breach of the terms of
this Agreement; or (iv) any relocation of Executive’s principal place of work
with Company to a place more than fifty (50) miles from Company’s headquarters
at the Effective Date; provided, however, that any such occurrence under clauses
(i) – (v) above shall constitute Good Reason only if (1) Executive provides
notice to Company within thirty (30) days after the occurrence, (2) Company
fails to cure such occurrence within thirty (30) days after receipt of notice
from Executive, and (3) Executive terminates employment within thirty (30) days
following expiration of the cure period.

3. Compensation and Benefits During Employment.

(a) Base Salary. During the term of Executive’s employment hereunder, Company
shall pay to Executive a base salary at an annual rate of $315,000.00 (the “Base
Salary”). The Base Salary may be increased from time to time at the
recommendation of the CEO and approved by the Compensation Committee of the
Board (the “Compensation Committee”).

(b) Annual Bonus. Executive shall be eligible for a discretionary “Annual Bonus”
in accordance with the Company’s Executive Officers Incentive Plan as in effect
on the Effective Date at a target rate of 60% of her Base Salary. Executive’s
bonus shall be paid in a single lump sum cash payment not later than June 15
following the conclusion of the calendar year in which such bonus is earned,
provided, however, that if the annual audit for such calendar year has not been
issued by Company’s outside auditors by said June 15, then payment shall be made
within thirty (30) days following the issuance of such audit, but in no event
shall payment be made later than the end of the calendar year following the
calendar year in which such bonus is earned.

 

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(c) Time Off. During the Term, Executive shall be entitled to vacation
consistent with Company practice and policy for executive-level employees, but
not less than four (4) weeks per year. In addition, Executive shall be entitled
to those paid holidays granted to Company employees while Executive is employed.

(d) Executive Benefits/Perquisites. Executive shall be entitled to such other
benefits, including health insurance, dental, 401(k), and other benefits and
perquisites in such form and in such manner and at such times as Company shall
from time to time adopt and establish for its executive-level employees
generally. Executive shall be subject to eligibility and other requirements of
applicable benefit plans.

(e) Expenses. Company shall pay or reimburse Executive for all reasonable
business expenses actually incurred or paid by Executive during the Term in the
performance of Executive’s duties and responsibilities under this Agreement,
subject to and in accordance with applicable expense reimbursement policies as
in effect from time to time.

(f) Equity Awards. Executive shall be entitled to annual equity grants, if any,
as determined by the Compensation Committee.

4. Payments and Benefits on Termination of Employment.

(a) Termination for any Reason. If Executive’s Termination Date occurs for any
reason, Company shall pay or provide to Executive (i) Executive’s Base Salary
for the period ending on the Termination Date; (ii) Executive’s earned but
unpaid Annual Bonus for any bonus year ending prior to the bonus year during
which the Termination Date occurs; (iii) reimbursement of Executive’s incurred
but unreimbursed business expenses for periods prior to Executive’s Termination
Date; and (iv) any other payments or benefits to be provided to Executive by
Company pursuant to any employee benefit plans or arrangements of Company or
required by applicable law, to the extent such amounts are due from Company.
Executive will be entitled to any other benefits in accordance with the terms of
the applicable benefit plan or program. Unless Executive’s Termination Date
occurs as a result of a Qualifying Termination, all stock options outstanding on
Executive’s Termination Date shall remain exercisable for ninety (90) days
following the Termination Date or for such longer or shorter period specified
under the stock option agreement evidencing such stock option but in no event
after the expiration of the stock option term.

(b) Qualifying Termination—Non-Change in Control. If Executive’s Termination
Date occurs by reason of a Qualifying Termination and if the Release
Requirements (as defined Paragraph 4(e)) are satisfied as of the sixtieth
(60th) day following the Termination Date (which sixtieth (60th) day shall be
referred to as the “Payment Date”), then, in addition to the payments and
benefits to which Executive is entitled under Paragraph 4(a), Executive will be
entitled to the following payments and benefits:

(i) Company shall pay Executive a cash severance payment in a gross amount equal
to twelve (12) months of Executive’s Base Salary (determined as of the
Termination Date without regard to any reduction thereof under circumstances
which constitute Good Reason) (the “Severance Payment”). Any Severance Payment
to which Executive is entitled under this Paragraph 4(b)(i) will commence on the
first regular payroll date after the Payment Date and shall continue to be paid
in substantially equal payroll by payroll period installments for a period of
twelve (12) months thereafter.

(ii) If Executive is entitled to and elects continuation coverage under
Company’s group health plans pursuant to “COBRA” (“COBRA Coverage”), Company
shall continue to pay on behalf of Executive and her eligible dependents the
same level of employer contribution that is provided by Company for
corresponding coverage for similarly-situated active employees for the lesser of
(1) twelve (12) months following Executive’s Termination Date or (2) the date on
which COBRA Coverage terminates by its terms (the “Post-Termination Coverage
Benefit”). Company shall have no obligations under this Paragraph 4(b)(ii) if
the Post-Termination Coverage Benefit would subject Company or any of

 

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its affiliates to tax penalties or materially increase the cost to Company and
its affiliates of providing group medical coverage to employees generally. For
the period commencing on Executive’s Termination Date and ending on the Payment
Date, the COBRA Coverage shall be provided at Executive’s expense and, if the
Release Requirements are satisfied on the Payment Date, Executive shall be
entitled to a lump sum payment in an amount equal to the Post-Termination
Coverage Benefit that would have been provided to Executive for the period
beginning on the Termination Date and ending on the Payment Date, which lump sum
payment shall be made on the Payment Date or the next scheduled payroll date.

If the Release Requirements are not satisfied on the Payment Date, Executive
shall not be entitled to any payments or benefits under this Paragraph 4(b).

(c) Qualifying Termination—Change in Control. If Executive’s Termination Date
occurs by reason of a Qualifying Termination on or within two (2) years
following a Change in Control (as defined below), then, in addition to the
payments and benefits to which Executive is entitled under Paragraph 4(a),
Executive will be entitled to the following payments and benefits (which shall
not be subject to satisfaction of the Release Requirements):

(i) Company shall pay Executive the Severance Benefit in accordance with the
provisions of Paragraph 4(b)(i).

(ii) If Executive is entitled to and elects COBRA Coverage, Company shall
provide Executive with the Post-Termination Coverage Benefit in accordance with
the provisions of Paragraph 4(b)(ii).

(iii) Company shall pay Executive a cash payment equal to the amount of the
Annual Bonus that Executive would have received for the bonus year in which the
Termination Date occurs had her Termination Date not occurred, based on actual
Company performance and pro-rated for the portion of the bonus year completed
prior to the Termination Date, payable at the same time as the annual bonus is
paid to similarly situated active executive employees in accordance with the
terms of the applicable bonus plan of the Company.

For purposes of this Agreement, the term “Change in Control” shall mean, a
“Change in Control” as defined in the Potbelly Corporation 2012 Long-Term
Incentive Plan.

(d) Company Property. Upon Executive’s Termination Date, Executive will promptly
return to Company all the documents and/or property of or relating to Company or
any of its affiliates within Executive’s possession or control.

(e) Release Requirements. For purposes of this Agreement, the “Release
Requirements” shall be satisfied as of any date if, as of such date, Executive
(or, for purposes of Paragraph 4(f), the legal representative of Executive’s
estate) has signed a form of general release and waiver satisfactory to Company
and Executive if prior to death (the “Release”) and the Release has become
effective in accordance with applicable law (including that the Release has not
revoked and the revocation period applicable under applicable law has expired).

(f) Termination by Reason of Death or Disability. If Executive’s Termination
Date occurs by reason of death or Disability and the Release Requirements are
satisfied (which, in the case of death shall be satisfied by the legal
representative of Executive’s estate), then, in addition to the payments and
benefits to which Executive is entitled under Paragraph 4(a), Company shall pay
to Executive or the legal representative of her estate, as applicable, a cash
payment equal to the amount of the Annual Bonus that Executive would have
received for the bonus year in which the Termination Date occurs had her
Termination Date not occurred, based on actual Company performance and pro-rated
for the portion of the bonus year completed prior to the Termination Date,
payable at the same time as the annual bonus is paid to similarly-situated
active executive employees in accordance with the terms of the applicable bonus
plan of Company.

 

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5. Mitigation and Set-Off. Executive shall not be required to mitigate the
amount of any payment provided for in this Agreement by seeking other employment
or otherwise. Company shall not be entitled to set off against the amounts
payable to Executive under this Agreement any amounts earned by Executive in
other employment after termination of her employment with Company or any amounts
which might have been earned by Executive in other employment had she sought
such other employment; provided, however that Company shall be entitled to set
off against the amounts payable to Executive under this Agreement any amounts
owed to Company by Executive.

6. Reimbursements. To the extent that any reimbursements under this Agreement
are taxable to Executive, such reimbursements shall be paid to Executive only if
(a) to the extent not specified herein, the expenses are incurred and
reimbursable pursuant to a reimbursement plan that provides an objectively
determinable nondiscretionary definition of the expenses that are eligible for
reimbursement and (b) the expenses are incurred during the Term. With respect to
any expenses that are reimbursable pursuant to the preceding sentence, the
amount of the expenses that are eligible for reimbursement during one calendar
year may not affect the amount of reimbursements to be provided in any
subsequent calendar year, the reimbursement of an eligible expense shall be made
no later than the last day of the calendar year following the calendar year in
which the expense was incurred, and the right to reimbursement of the expenses
shall not be subject to liquidation or exchange for any other benefit.

7. Notices. Notices and all other communications provided for in this Agreement
shall be in writing and shall be delivered personally or sent by registered or
certified mail, return receipt requested, postage prepaid, or sent by facsimile
or prepaid overnight courier to the parties at the addresses set forth below (or
such other addresses as shall be specified by the parties by like notice).
Communications that are to be delivered by the U.S. mail or by overnight service
are to be delivered to the addresses set forth below:

to Company:

Potbelly Corporation

222 Merchandise Mart Plaza Suite 2300

Chicago, Illinois 60654

Attention: General Counsel

or to Executive, to Executive’s home address as reflected in Company’s records.

Each party, by notice furnished to the other party, may modify the applicable
delivery address, except that notice of change of address shall be effective
only upon receipt.

8. Non-Waiver. No waiver by either party or any breach by the other party of any
provision hereof shall be deemed to be a waiver of any later or other breach
thereof or as a waiver of any such or other provision of this Agreement.

9. Governing Law and Choice of Forum. The construction, validity, and
enforceability of this Agreement shall be governed by the laws of the State of
Illinois, as that law applies to contracts made, and to be wholly performed, in
the State of Illinois.

10. Binding Effect. This Agreement shall be binding upon and inure to the
benefit of Company, Executive, and Executive’s personal representatives,
beneficiaries, heirs, and successors. Company will require any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business and/or assets of Company to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that Company would be required to perform it if no such succession has
taken place.

11. Severability. If any provision of this Agreement or any part thereof be held
invalid or unenforceable, the same shall not affect or impair any other
provision of this Agreement or any part thereof, and the invalidity or
unenforceability of any provision of this Agreement shall not have any effect on
or otherwise impair or limit the other obligations of Company or Executive.

 

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12. Counterparts. This Agreement may be executed in duplicate counterparts, each
of which shall be deemed an original hereof.

13. Disputes. Except as set forth in this Paragraph 13, any dispute, claim or
difference arising between Company and Executive (each a “Party,” and jointly,
the “Parties”), including any dispute, claim or difference arising out of this
Agreement, will be settled exclusively by binding arbitration in accordance with
the rules of the Judicial Arbitration and Mediation Services, Inc. (“JAMS”). The
arbitration will be held Chicago, Illinois unless the Parties mutually agree
otherwise. Nothing contained in this Paragraph 13 will be construed to limit or
preclude a Party from bringing any action in any court of competent jurisdiction
for injunctive or other provisional relief to compel another party to comply
with its obligations under this Agreement or any other agreement between or
among the Parties during the pendency of the arbitration proceedings. Each Party
shall bear its own costs and fees of the arbitration, and the fees and expenses
of the arbitrator will be borne equally by the Parties, provided, however, if
the arbitrator determines that any Party has acted in bad faith, the arbitrator
shall have the discretion to require any one or more of the Parties to bear all
or any portion of fees and expenses of the Parties and/or the fees and expenses
of the arbitrator; provided, further that, with respect to claims that, but for
this mandatory arbitration clause, could be brought against Company under any
applicable federal or state labor or employment law (“Employment Law”), the
arbitrator shall be granted and shall be required to exercise all discretion
belonging to a court of competent jurisdiction under such Employment Law to
decide the dispute, whether such discretion relates to the provision of
discovery, the award of any remedies or penalties, or otherwise and provided
further that Company may be required to pay filing or administrative fees in the
event that requiring Executive to pay such fees would render this Paragraph 13
unenforceable under applicable law. As to claims not relating to Employment
Laws, the arbitrator shall have the authority to award any remedy or relief that
a Court of the State of Illinois could order or grant. The decision and award of
the arbitrator shall be in writing and copies thereof shall be delivered to each
Party. The decision and award of the arbitrator shall be binding on all Parties.
In rendering such decision and award, the arbitrator shall not add to, subtract
from or otherwise modify the provisions of this Agreement. Either Party to the
arbitration may seek to have the award of the arbitrator entered in any court
having jurisdiction thereof. All aspects of the arbitration shall be considered
confidential and shall not be disseminated by any Party with the exception of
the ability and opportunity to prosecute its claim or assert its defense to any
such claim. The arbitrator shall, upon request of either Party, issue all
prescriptive orders as may be required to enforce and maintain this covenant of
confidentiality during the course of the arbitration and after the conclusion of
same so that the result and underlying data, information, materials and other
evidence are forever withheld from public dissemination with the exception of
its subpoena by a court of competent jurisdiction in an unrelated proceeding
brought by a third party.

14. Assignment and Survival. This Agreement is personal to Executive and shall
not be assignable by Executive. This Agreement may be assigned by Company only
to a successor-in interest to all or substantially all of the business
operations of Company or any of its affiliates. The rights and obligations of
the parties to this Agreement shall survive its termination or expiration of
this Agreement to the extent that any performance is required under this
Agreement after the termination or expiration of the Agreement.

15. No Strict Construction. The language used in this Agreement will be deemed
to be the language chosen by the parties to express their mutual intent, and no
rule of strict construction will be used against any person.

16. Indemnification. If Executive (or her heirs, executors or administrators) is
made a party or is threatened to be made a party to, or is involved in, any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that Executive
is or was a director or officer of Company or is or was serving at the request
of Company as a director or officer of another corporation, partnership, joint
venture, trust or other enterprise, Executive (and her heirs, executors or
administrators) shall be indemnified and held harmless by Company to the fullest
extent permitted by Delaware Law. To the fullest extent authorized by Delaware
Law, the right to indemnification conferred in this Paragraph 16 shall also
include the right to be paid by Company the expenses incurred in connection with
any such proceeding in advance of its final disposition upon delivery to Company
of an undertaking by or on behalf of Executive to repay such amount if it shall
ultimately be determined that Executive is not entitled to be indemnified.
Company’s obligations under this Paragraph 16 shall survive the termination or
expiration of this Agreement for any reason.

 

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17. Withholding. All payments and benefits under this Agreement are subject to
withholding of all applicable taxes.

18. Special Section 409A Rules. It is intended that this Agreement will comply
with section 409A of the Internal Revenue Code of 1986, as amended (the “Code”),
to the extent applicable, and this Agreement shall be interpreted and construed
on a basis consistent with such intent. Notwithstanding any other provision of
this Agreement to the contrary, if any payment or benefit hereunder is subject
to section 409A of the Code, and if such payment or benefit is to be paid or
provided on account of Executive’s Termination Date (or other separation from
service or termination of employment):

(a) and if Executive is a specified employee (within the meaning of section
409A(a)(2)(B) of the Code) and if any such payment or benefit is required to be
made or provided prior to the earlier of (i) the first (1st) day of the seventh
(7th) month following Executive’s separation from service or (ii) the date of
Executive’s death (the “Section 409A Payment Date”), such payment or benefit
shall be delayed until the Section 409A Payment Date; and

(b) the determination as to whether Executive has had a termination of
employment (or separation from service) shall be made in accordance with the
provisions of section 409A of the Code and the guidance issued thereunder
without application of any alternative levels of reductions of bona fide
services permitted thereunder.

For purposes of section 409A of the Code, any installment payment or benefit
under this Agreement shall be treated as a separate payment. If this Paragraph
18 applies to any payment or benefit hereunder, any such payments or benefits
that would otherwise have been paid or provided to Executive between Executive’s
Termination Date and the Section 409A Payment Date, shall be paid in a lump sum
on the Section 409A Payment Date.

19. Entire Agreement. This Agreement, together with Executive Confidentiality
and Non-Compete Agreement in effect on the Effective Date, constitutes the
entire agreement between the parties with respect to the subject matter hereof
and supersedes and cancels all prior or contemporaneous oral or written
agreements and understandings between them with respect to the subject matter
hereof, except as otherwise specifically stated in this Agreement, including the
Prior Agreement; provided, however, that nothing in this Agreement shall
supersede the provisions of the Stock Terms Agreement which was included as
Exhibit C to the Prior Agreement. This Agreement may not be changed or modified
orally but only by an instrument in writing signed by the parties hereto, which
instrument states that it is an amendment to this Agreement.

[signature page follows]

 

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EXECUTIVE EMPLOYMENT AGREEMENT

 

IN WITNESS WHEREOF, intending to be legally bound, Company and Executive have
executed this agreement as of the date set forth below.

 

Dated as of May 1, 2015

POTBELLY CORPORATION

/s/ Aylwin Lewis

By: Aylwin Lewis Its: President and Chief Executive Officer EXECUTIVE:

/s/ Julie Younglove-Webb

Julie Younglove-Webb

 

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