UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers |
(e)
On November 2, 2022, Potbelly Corporation (the “Company”) and Robert D. Wright, President and Chief Executive Officer of the Company, entered into an Employment Agreement Amendment (the “Amendment”) to the Executive Employment Agreement dated July 20, 2020 between the Company and Mr. Wright (the “Wright Employment Agreement”).
The Amendment (i) extends the term of the Wright Employment Agreement from July 20, 2023 to December 31, 2025, (ii) increases Mr. Wright’s annual base salary to an annual rate of $725,000 which such annual base salary shall be subject to an annual review beginning in calendar year 2024 and may be increased based on performance as determined in the discretion of the Board of Directors of the Company (the “Board”), (iii) entitles Mr. Wright to receive an annual bonus in an amount equal to 50% (threshold), 115% (target), or 200% (maximum) of Mr. Wright’s annual base salary based on performance against specific performance targets set by the Board, (iv) provides for an annual grant of restricted stock units with respect to shares with a value equal to $500,000 which shall vest in equal monthly installments (each a “Time-Based Vesting Date”) over three years (the “Time-Based Awards”), (v) provides for an annual grant of performance stock units with respect to shares with a value equal to $500,000 which shall vest pursuant to the Equity Plan (as defined in the Wright Employment Agreement) (the “Performance-Based Awards”) and (vi) provides for an annual grant of price performance stock units with respect to shares with a value equal to $500,000 which shall vest if the 45-day volume weighted average price of a share of common stock of the Company exceeds: (a) $8.00, (b) $10.00 and (c) $12.00 (individually, the “Price Performance Awards” and together with the Time-Based Awards and the Performance-Based Awards, the “Equity Awards”).
With respect to the Equity Awards, if Mr. Wright’s employment is terminated (a) prior to December 31, 2025 for any reason, the Time-Based Awards and Performance-Based Awards that have not vested will terminate and any unvested portion of Price Performance Awards will remain eligible to vest subject to the relevant terms and conditions for 90 days following the termination date or (b) after December 31, 2025 for any reason other than Cause (as defined in the Wright Employment Agreement), death or Disability (as defined in the Wright Employment Agreement) and Mr. Wright assists the Board with the transition of his position on a reasonable basis, all outstanding Time-Based Awards will continue to vest until fully vested and all outstanding Performance-Based Awards and Price Performance Awards will continue to vest subject to the relevant terms and conditions of the awards. Upon a Change in Control (as defined in the Wright Employment Agreement), all of the unvested Time-Base Awards will vest and all or some portion of the Performance-Based Awards and Price Performance Awards shall vest as set forth in the Amendment.
The Amendment provides that upon termination of Mr. Wright’s employment by the Company without Cause (as defined in the Wright Employment Agreement) or by Mr. Wright for Good Reason (as defined in the Amendment), Mr. Wright will be entitled to receive (i) annual base salary for one year, (ii) a lump sum payment of a prorated portion of his annual bonus, determined at the target level of performance for such year, (iii) medical continuation benefits, if Mr. Wright is entitled to and elects the benefits and (iv) vesting of certain Equity Awards as described above.
The foregoing description of the Amendment is not complete and is qualified in its entirety by reference to the Amendment which is filed as Exhibit 10.1 of this Current Report on Form 8-K and the Wright Employment Agreement which is filed as Exhibit 10.1 of the Current Report on Form 8-K filed on July 20, 2020.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
| Exhibit No. |
Description | |
| 10.1 | Employment Agreement Amendment between Potbelly Corporation and Robert D. Wright, dated November 2, 2022. | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). | |
SIGNATURES
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.
| POTBELLY CORPORATION | ||
| By: | /s/ Steven Cirulis | |
| Name: | Steven Cirulis | |
| Title: | Senior Vice President, Chief Financial Officer and Chief Strategy Officer | |
Date: November 2, 2022