Exhibit 10.1

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

THIS EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into
as of July 20, 2020 (the “Effective Date”) by and between Potbelly Corporation,
a Delaware corporation (hereinafter referred to as “Company”), and Robert D.
Wright, an individual (hereinafter referred to as “Executive”).

 

WHEREAS, Company desires to employ Executive from and after the Effective Date
in the position of its President and Chief Executive Officer, and Executive
desires to perform services for, and to be employed by, Company in such
capacity, all on the terms and conditions set forth herein;

 

NOW, THEREFORE, in consideration of the mutual promises, covenants and
conditions set forth in this Agreement, Company and Executive agree as follows:

 

1. Definitions. For purposes of this Agreement, capitalized terms used herein
shall have the meaning specified below if not otherwise defined herein.

 

(a) Accrued Obligations is defined in paragraph 4(a).

 

(b) Annual Base Salary is defined in paragraph 3(a).

 

(c) Annual Bonus is defined in subparagraph 3(b)(ii).

 

(d) Base Salary is defined in paragraph 3(a).

 

(e) Board means the Board of Directors of Company.

 

(f) Cause means (i) any willful and continued failure by Executive to
substantially perform his duties for Company (other than any such failure
resulting from Executive’s being Disabled), (ii) the willful engaging by
Executive in conduct which is demonstrably and materially injurious to Company,
monetarily or otherwise, (iii) the engaging by Executive in egregious misconduct
involving serious moral turpitude to the extent that, in the reasonable judgment
of the Board, Executive’s credibility and reputation no longer conform to the
standard of Company’s executives, (iv) Executive’s indictment (or its
equivalent) for the commission of a crime by Executive that constitutes a
felony, or (v) a breach of the Restrictive Covenants Agreement. For purposes of
this Agreement, no act, or failure to act, on Executive’s part shall be deemed
“willful” unless done, or omitted to be done, by Executive not in good faith and
without reasonable belief that Executive’s action or omission was in the best
interest of Company.

 

 

 

 

(g) Change in Control means the first to occur of any of the following: (i) the
consummation of a transaction, approved by the stockholders of Company, to merge
Company with or into or consolidate Company with another entity or sell or
otherwise dispose of all or substantially all of its assets, or the stockholders
of Company adopt a plan of liquidation; provided, however, that a Change in
Control shall not be deemed to have occurred by reason of a transaction, or a
substantially concurrent or otherwise related series of transactions, upon the
completion of which fifty percent (50%) or more of the beneficial ownership of
the voting power of Company, the surviving corporation or corporation directly
or indirectly controlling Company or the surviving corporation, as the case may
be, is held by the same persons (although not necessarily in the same
proportion) as held the beneficial ownership of the voting power of Company
immediately prior to the transaction or the substantially concurrent or
otherwise related series of transactions, except that upon the completion
thereof, employees or employee benefit plans of Company may be a new holder of
such beneficial ownership, or (ii) the “beneficial ownership” (as defined in
Rule 13d-3 under the Exchange Act) of securities representing fifty percent
(50%) or more of the combined voting power of Company is acquired, other than
from Company, by any “person” as defined in Sections 13(d) and 14(d) of the
Exchange Act (other than any trustee or other fiduciary holding securities under
an employee benefit or other similar equity plan of Company), or (iii) at any
time during any period of two (2) consecutive years, individuals who at the
beginning of such period were members of the Board cease for any reason to
constitute at least a majority thereof (unless the election, or the nomination
for election by Company’s stockholders, of each new director was approved by a
vote of at least two-thirds of the directors still in office at the time of such
election or nomination who were directors at the beginning of such period).

 

(h) COBRA Continuation Period means the period commencing on the date that COBRA
Coverage begins and ending on the date that COBRA Coverage terminates by its
terms.

 

(i) COBRA Coverage means continuation of group medical coverage required under
section 4980B of the Code.

 

(j) Code means the Internal Revenue Code of 1986, as amended.

 

(k) Company means Potbelly Corporation, a Delaware corporation, or any successor
thereto.

 

(l) Compensation Committee means the Compensation Committee of the Board.

 

(m) Disability/Disabled means that Executive is unable to engage in any
substantial gainful activity by reason of any medically determinable physical or
mental impairment which can be expected to result in death or which has lasted
or can be expected to last for a continuous period of not less than twelve (12)
months. Whether Executive has a “Disability” (or is “Disabled”) shall be
determined by Company in a manner that is consistent with section 22(e)(3) of
the Code.

 

(n) Effective Date means July 20, 2020.

 

(o) Employment Law is defined in Section 7.

 

(p) Equity Award(s) is defined in paragraph 3(c).

 

(q) Equity Plan means Company’s long-term incentive plan, as in effect from time
to time.

 

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(r) Exchange Act means Securities Exchange Act of 1934, as amended.

 

(s) Executive means Robert D. Wright.

 

(t) Good Reason as used herein means the occurrence, without Executive’s
consent, of (i) any reduction in either the annual base salary of Executive or
the target annual bonus percentage or maximum annual bonus percentage applicable
to Executive (other than across the board salary reductions 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) following initial election to the
Board, Executive shall fail to be re-elected to the Board while employed as the
Chief Executive Officer of Company; provided, however, that any such occurrence
under clauses (i) — (iv) above shall constitute good reason only if Company
fails to cure such occurrence within thirty (30) days after receipt from
executive of notice of such occurrence.

 

(u) JAMS means Judicial Arbitration and Mediation Services, Inc.

 

(v) Medical Continuation Benefit means reimbursement by Company of the portion
of the applicable monthly premium required to be paid by Executive (and his
eligible dependents) for COBRA Coverage, which reimbursement (i) shall be equal
to the portion of the monthly premium paid by Company for group health coverage
with respect to its active employees for the level of coverage provided to
Executive and his dependents in the form of COBRA Coverage and (ii) shall be
provided for the lesser of (A) twelve (12) months following the Termination Date
or (B) the date that COBRA Coverage with respect to Executive and/or his covered
dependents, as applicable, terminates in accordance with its terms.

 

(w) Party means Company and Executive, referred to jointly as the “Parties”.

 

(x) Payment Date means the sixtieth (60th) day following the Termination Date.

 

(y) PSU Award is defined in subparagraph 3(c)(ii).

 

(z) Release means a general release in favor of Company and its affiliates in a
form determined by Company.

 

(aa) Release Requirements is defined in paragraph 4(c).

 

(bb) Restrictive Covenants Agreement is defined in paragraph 2(d).

 

(cc) Section 409A Payment Date is defined in Section 11.

 

(dd) Shares means shares of common stock, $.01 par value, of the Company.

 

(ee) Sign-On Bonus is defined in subparagraph 3(b)(i).

 

(ff) Sign-On Grant is defined in subparagraph 3(c)(i).

 

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(gg) Term is defined in paragraph 2(a).

 

(hh) Termination Date means the date on which Executive’s employment with
Company and its affiliates terminates for any reason.

 

(ii) Vesting Date is defined, as applicable, in subparagraphs 3(c)(i) or
3(c)(ii).

 

2. Term and Performance of Duties.

 

(a) Term. Company hereby agrees to employ Executive, and Executive accepts such
employment and agrees to perform services for, Company and its affiliates for
the “Term” which shall be the period beginning on the Effective Date and
expiring on the earlier of (i) the third anniversary of the Effective Date or
(ii) the date this Agreement is terminated in accordance with Section 4 of this
Agreement.

 

(b) Performance of Duties. During the Term, while Executive is employed by
Company, Executive agrees that he shall devote his full business time, energies,
loyalty, and talents to serving as its President and Chief Executive Officer,
shall use his best efforts and abilities to promote the interests of Company and
its affiliates and to perform the services contemplated by this Agreement, and
shall perform his duties faithfully and efficiently subject to the directions of
the Board. Executive’s duties may include providing services for both Company
and its affiliates, as determined by the Board; provided, that Executive shall
not, without his consent, be assigned tasks that would be inconsistent with
those of Company’s President and Chief Executive Officer. Executive shall have
such authority and power as are inherent to the undertakings applicable to his
positions and necessary to carry out his responsibilities and the duties
required of him hereunder. Executive will be subject to reasonable and
appropriate travel on Company business. Notwithstanding the foregoing, during
the Term, Executive may devote reasonable time to activities other than those
required under this Agreement, including the supervision of his personal
investments, and activities involving professional, charitable, educational,
religious and similar types of organizations, speaking engagements, membership
on the boards of directors of other organizations, and similar type activities,
to the extent that such other activities do not, in the reasonable judgment of
the Board, inhibit or prohibit the performance of Executive’s duties under this
Agreement, or conflict in any material way with the business of Company or any
of its affiliates; provided, however, that Executive shall not serve on the
board of any business, or hold any other position with any business, without the
consent of the Board, which shall not be unreasonably withheld.

 

(c) Board Service. During the Term, while Executive is employed as Company’s
President and Chief Executive Officer, at the request of Company and subject to
any appointment or election requirements, Executive shall serve on the Board and
the boards of directors of Company’s subsidiaries, in each case without
additional compensation. Upon Executive’s Termination Date, Executive shall
immediately resign from the Board and all boards of directors of Company’s
subsidiaries.

 

(d) Confidentiality, Non-Competition, Non-Interference and Intellectual
Property.  Executive hereby acknowledges and confirms that, on or prior to the
Effective Date, Executive shall execute the form of Executive Confidentiality
and Non-Compete Agreement set forth in Appendix A hereto and which is hereby
incorporated into and forms part of this Agreement (the “Restrictive Covenants
Agreement”).

 

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3. Compensation. Subject to the terms of this Agreement, during the Term, while
Executive is employed by Company, Company shall compensate him for his services
as follows:

 

(a) Base Salary. During the Term while he is employed by Company, Company shall
pay to Executive as compensation for services to be rendered hereunder as
follows: (i) for the period commencing on the Effective Date and ending on June
30, 2021, a “Base Salary” at the rate of $1 (or such other nominal amount
sufficient to enable Executive to pay applicable welfare benefit costs), and
(ii) for the period commencing on July 1, 2021 and ending on the last day of the
Term, a “Annual Base Salary” at the annual rate of $650,000. The Base Salary and
the Annual Base Salary, as applicable, shall be payable in substantially equal
monthly, or more frequent, payments. The rate of Annual Base Salary shall be
subject to annual review beginning for calendar year 2022 and may be increased
for performance as determined in the discretion of the Board (or applicable
committee thereof). The Base Salary and Annual Base Salary, as applicable, shall
be pro-rated for any period of less than twelve (12) months.

 

(b) Bonuses. Executive shall be eligible to receive bonuses in accordance with
the following:

 

(i)To incentivize Executive to accept Company’s offer of employment, Executive
shall receive a cash sign-on bonus (the “Sign-On Bonus”) in an amount equal to
$400,000. The Sign-On Bonus shall be payable in a lump sum on July 1, 2021
provided Executive’s Termination Date has not occurred prior to July 1, 2021;
provided, however, that if the Termination Date occurs after December 31, 2020
and prior to July 1, 2021 on account of Executive’s death, Disability,
termination by the Company for reasons other than for Cause, or termination by
Executive for Good Reason, the Sign-On Bonus will be paid on July 1, 2021
notwithstanding that Executive’s Termination Date occurs prior to July 1, 2021.

 

(ii)For any calendar year during the Term beginning with calendar year 2021,
Executive shall be eligible to receive an “Annual Bonus” in an amount equal to a
percentage of Executive’s Annual Base Salary, subject to satisfaction of
applicable performance targets determined by the Compensation Committee in its
sole discretion no later than March 15 of the applicable calendar year and in
accordance with the terms and conditions of Company’s annual bonus plan. For
purposes of determining the amount of the Annual Bonus, if any, pursuant to this
subparagraph 3(b)(ii), the percentage of Executive’s Annual Base Salary that
shall be applied shall be (A) sixty percent (60%) at the threshold level of
performance, (B) one hundred and fifteen percent (115%) at the target level of
performance, and (C) 200% at the maximum level of performance and in no event
shall the Annual Bonus for any year be greater than two hundred percent (200%)
of Executive’s Annual Base Salary.

 

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(c) Equity Compensation. As of the Effective Date (or, if the Effective Date
does not occur in an open trading window, in the first open trading window
occurring after the Effective Date and as soon as practicable after the
Effective Date), Executive shall receive equity awards in accordance with the
following:

 

(i)To incentivize Executive to accept Company’s offer of employment, Executive
shall be granted a restricted stock unit award with respect to 300,000 Shares
(the “Sign-On Grant”), which shall be subject to the following vesting terms:

 

(1)Fifty percent (50%) of the Shares subject thereto (150,000 Shares) shall vest
on the first annual anniversary of the Effective Date (the “Vesting Date” for
purposes of this clause (1)) provided that the Termination Date has not occurred
as of the Vesting Date and subject to the terms and conditions of the award.

 

(2)Fifty percent (50%) of the Shares subject thereto (150,000 Shares) will vest
at the rate of one twenty-fourth (1/24) of such Shares (6,250 Shares) on each
monthly anniversary of the Effective Date beginning with the thirteenth (13th)
monthly anniversary of the Effective Date (each such date a “Vesting Date” for
purposes of this clause (2)) provided that the Termination Date has not occurred
as of the Vesting Date and subject to the terms and conditions of the award.

 

(3)Notwithstanding the provisions of clauses (1) and (2), if, and only if, a
Change in Control occurs prior to the applicable Vesting Date and if the
Termination Date occurs prior to the applicable Vesting Date and on or within
twelve (12) months following the Change in Control by reason of termination by
Company without Cause or termination by Executive for Good Reason, then the
Termination Date shall be the “Vesting Date” with respect to any Shares subject
to the Sign-On Grant that have not vested as of the Termination Date and all
such unvested Shares shall vest as of the Termination Date.

 

Any portion of the Sign-On Grant that is not vested on the Termination Date in
accordance with the provisions of this subparagraph 3(c)(i) shall be forfeited
as of the Termination Date. The Sign-On Grant shall constitute an inducement
grant and shall not be granted pursuant to the Equity Plan.

 

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(ii)Executive shall be granted a performance stock unit award (the “PSU Award”)
with respect to 700,000 Shares, which PSU Award shall be granted pursuant to the
Equity Plan. The PSU Award shall vest with respect to the percentage of shares
subject to the PSU Award as indicated in the following chart based on the date
that the price of a Share is above the applicable price set forth in the
following chart (each date on which a portion of the PSU Award vests being
referred to as a “Vesting Date”), provided in any case that the Termination Date
has not occurred as of the applicable Vesting Date and subject to the terms and
conditions of the award:

 

Vesting Percentage
(Based on Total
Shares Subject to
PSU Award)  

Pre-Change in Control: 

Thirty (30)-day
volume weighted
average price
(VWAP) of a Share

  

Change in Control:

 

Price per Share
received by Company
shareholders on
closing of Change in
Control transaction

   40%  $4.00   $3.00   40%  $6.00   $5.00   20%  $8.00   $7.00 

 

Any portion of the PSU Award that is not vested on the Termination Date (or, in
the case of a Change in Control, on the date of the Change in Control) shall be
forfeited as of the Termination Date (or Change in Control, if applicable);
provided, however, that if the Termination Date occurs prior to a Change in
Control by reason of termination by Company without Cause or termination by
Executive for Good Reason, any then unvested portion of the PSU Award shall
remain outstanding for a period of ninety (90) days following the Termination
Date and shall vest during such ninety (90) day period subject to the
satisfaction of the performance measures outlined above.

 

The Sign-On Grant and the PSU Award are sometimes referred to collectively as
the “Equity Awards” and individually as an “Equity Award”. The Equity Awards
shall be evidenced by award agreements that are consistent with the standard
award agreements used by the Company for similar types of awards, subject to the
foregoing provisions (and which, in the case of the PSU Award, will provide for
a performance period of five (5) years with respect to the applicable Share
price hurdles). Executive shall not be entitled to any grants of equity awards
under the Equity Plan (or otherwise) during the Term except as provided in this
paragraph 3(c).

 

(d) Benefits and Perquisites. Executive shall be eligible to participate in
employee benefit plans, programs and arrangements, to the extent and on
substantially the same terms as those benefits are provided by Company from time
to time to Company’s similarly-situated executive employees, including vacation
programs, fringe benefit programs, retirement plans, and welfare plans, subject
in all cases to the eligibility requirements thereof. Without limiting the
generality of the foregoing, Executive shall be entitled to five (5) weeks of
vacation for each calendar year during the Term (pro-rated for any partial
year).

 

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(e) Expense Reimbursements. 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 Company’s applicable expense
reimbursement policies as in effect from time to time.

 

4. Termination and Payments on Termination. Company or Executive may terminate
the Term and Executive’s employment with Company and its affiliates at any time
for any reason or no reason without any breach of this Agreement. Any such
termination (other than termination on account of Executive’s death) shall be
effected through an advance written notice from the terminating Party to the
other Party, which notice shall be provided within applicable time periods set
forth in this Agreement, if applicable, shall indicate the specific termination
provision in this Agreement relied on, and shall set forth in reasonable detail
the facts and circumstances, if any, on which such termination is based.
Notwithstanding the foregoing, Executive’s employment shall not be considered to
have terminated due to Good Reason unless, within thirty (30) days of an event
that Executive considers to constitute Good Reason, Executive provides written
notice to Company of such event, Company has not cured such event or condition
within thirty (30) days following receipt of such notice, and Executive
terminates employment for Good Reason within fifteen (15) days after expiration
of such cure period. Subject to the terms and conditions of this Agreement,
Executive’s right to payment and benefits under this Agreement for periods after
his Termination Date shall be determined in accordance with the following
provisions of this Section 4.

 

(a) Termination for Any Reason or No Reason. In the event the Termination Date
occurs for any reason or no reason, whether by Company or Executive, Executive
shall be entitled to (i) payment of his earned but unpaid Base Salary or Annual
Base Salary, as applicable, for the period ending on the Termination Date,
payable as required by applicable law, (ii) payment of his earned but unused
vacation days, as determined in accordance with Company’s policy as in effect
from time to time, payable in accordance with applicable law, (iii) any equity
compensation to which Executive is entitled under the terms of the Equity Plan
or applicable award agreements, (iv) reimbursements of any reasonable business
expenses incurred prior to the Termination Date and submitted as required under
the expense reimbursement policy of Company, and (v) any other payments or
benefits to which Executive is entitled under the express terms of any employee
benefit plans, arrangements or programs of Company and its affiliates. For
purposes of this Agreement, the payments and benefits to which Executive is
entitled pursuant to this paragraph 4(a) are referred to herein as the “Accrued
Obligations”. Except as otherwise expressly provided to the contrary in this
Agreement, nothing in this Agreement shall be construed as requiring Executive
to be treated as employed by Company for purposes of any employee benefit plan,
arrangement or program following the date of the Termination Date.

 

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(b) Termination by Company for Cause; Termination by Executive without Good
Reason; Termination by Reason of Account of Death or Disability. In the event
that the Termination Date occurs by reason of (i) termination of Executive’s
employment by Company for Cause, (ii) termination by Executive without Good
Reason, or (iii) Executive’s death or Disability, Executive (or in the event of
his death, his estate) shall be entitled to the Accrued Obligations and he shall
be entitled to no other payments or benefits from Company under this Agreement
or otherwise.

 

(c) Termination by Company without Cause; Termination by Executive for Good
Reason. In the event that the Termination Date occurs by reason of (i)
termination by Company without Cause or (ii) termination by Executive for Good
Reason and, in either case, if the Release Requirements (as defined below) are
met as of the Payment Date, Executive shall be entitled to the following
payments and benefits: (A) an amount equal to the Annual Base Salary set forth
in paragraph 3(a) (as the same may be increased from time to time), payable in
twelve (12) substantially equal monthly installments, beginning on the Payment
Date, (B) an amount equal to a pro rata portion of the Annual Bonus, determined
at the target level of performance for such year, payable in a lump sum as of
the Payment Date, (D) if Executive is entitled to and elects COBRA Coverage, the
Medical Continuation Benefit, and (E) all equity awards shall vest and shall be
exercisable, if applicable, in accordance with their terms as set forth in the
Equity Plan or applicable award agreement (taking into account the provisions of
paragraph 3(c)). The Medical Continuation Benefit to which Executive is entitled
for any month shall be paid monthly during the period for which the Medical
Continuation Benefit is payable; provided, however, that any portion of the
Medical Continuation Benefit for the period beginning on the Termination Date
and ending on the Payment Date shall be paid in a lump sum on the Payment Date.
In no event shall the Medical Continuation Benefit have the effect of extending
or otherwise modifying the maximum COBRA Continuation Period. The “Release
Requirements” will be will be satisfied as of the Payment Date if, as of the
Payment Date, (I) Executive has executed the Release, in connection with his
Termination Date; (II) the revocation period required by applicable law has
expired and Executive has not revoked the Release within such revocation period,
and (III) the Release has become effective.

 

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 his employment with Company or any amounts
which might have been earned by Executive in other employment had he 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. Assignment and Survival. This Agreement is personal to Executive and shall
not be assignable by Executive. This Agreement may be assigned by Company 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
shall survive s 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.

 

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7. Disputes. Except as set forth in this Section 7, any dispute, claim or
difference arising between the Parties including any dispute, claim or
difference arising out of this Agreement, shall be settled exclusively by
binding arbitration in accordance with the rules of the JAMS. The arbitration
shall be held Chicago, Illinois unless the Parties mutually agree otherwise.
Nothing contained in this Section 7 shall 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 shall 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 Section 7
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.

 

8. Indemnification. If Executive (or his 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 his 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 Section 8 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 Section 8 shall survive the termination or
expiration of this Agreement for any reason.

 

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9. Miscellaneous.

 

(a) 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

111 N. Canal Street, Suite 850

Chicago, IL 60606

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.

 

(b) Modification, Waivers. This Agreement may be modified or amended only by a
writing signed by an authorized representative of Company and Executive. To the
extent that the provision of Medical Continuation Benefit under this Agreement
would subject Company to a material tax or penalty, Company shall have the
authority to amend the Agreement to the limited extent reasonably necessary to
avoid such tax or penalty and shall use all reasonable efforts to provide
Executive with a comparable benefit that does not subject Company to such tax or
penalty. Company’s failure, or delay in exercising any right, or partial
exercise of any right, shall not waive any provision of this Agreement or
preclude Company from otherwise or further exercising any rights or remedies
hereunder, or any other rights or remedies granted by any law or any related
document.

 

(c) 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 without regard to conflicts of law principles.

 

(d) 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 shall 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.

 

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(e) Severability. To the extent any provision of this Agreement shall be invalid
or enforceable with respect to Executive, it shall be considered deleted
herefrom with respect to Executive and the remainder of such provision and this
Agreement shall be unaffected and shall continue in full force and effect. In
furtherance to and not in limitation of the foregoing, should the duration or
geographical extent of, or business activities covered by, any provision of this
Agreement be in excess of that which is valid and enforceable under applicable
law with respect to Executive, then such provision shall be construed to cover
only that duration, extent or activities which are validly and enforceably
covered with respect to Executive. Executive acknowledges the uncertainty of the
law in this respect and expressly stipulates that this Agreement be given the
construction which renders its provisions valid and enforceable to the maximum
extent (not exceeding its expressed terms) possible under applicable laws.

 

(f) No Violation. Executive represents and warrants to Company that the
execution and delivery of this Agreement by Executive, and the carrying out of
Executive’s duties on behalf of Company as contemplated hereby, do not violate
or conflict with the terms of any other agreements to which Executive is or was
a party.

 

(g) Independent Review and Advice. Executive represents and warrants that
Executive has carefully read this Agreement; that Executive executes this
Agreement with full knowledge of the contents of this Agreement, the legal
consequences thereof, and any and all rights which each party may have with
respect to each other; that Executive has had the opportunity to receive
independent legal advice with respect to the matters set forth in this Agreement
and with respect to the rights and asserted rights arising out of such matters,
and that Executive is entering into this Agreement of Executive’s own free will.
Executive expressly agrees that there are no expectations contrary to the
Agreement and no usage of trade or regular practice in the industry shall be
used to modify the Agreement.

 

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

 

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

 

11. Special Section 409A Rules.

 

(a) Generally. It is intended that this Agreement shall comply with section 409A
of 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 11 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.

 

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(b) Expense Reimbursements. To the extent that any reimbursements from Company
to Executive under this Agreement or otherwise (including any reimbursements
under this paragraph 3(e)) are taxable to Executive, such reimbursements shall
be paid to Executive only if (i) 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 (i) 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.

 

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

 

13. Entire Agreement.  This Agreement, together with Executive Confidentiality
and Non-Compete Agreement set forth in Exhibit A hereto, 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. 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.

 

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IN WITNESS HEREOF, each party has caused this Executive Employment Agreement to
be executed in a manner appropriate for such party as of the date first above
written.

 

  POTBELLY CORPORATION         By: /s/ Joseph Boehm   Name: Joseph Boehm   Its:
Director         EXECUTIVE         /s/ Robert D. Wright   Robert D. Wright

 

 

 

  

APPENDIX A

 

RESTRICTIVE COVENANTS AGREEMENT