This COOPERATION AGREEMENT (this Agreement) is made and entered into as of March 26 2021, by and among Potbelly Corporation, a Delaware corporation (the Company), on the one hand, and Intrinsic Investment Holdings, LLC, an Illinois limited liability company (Intrinsic), the Vann A. Avedisian Trust U/A 8/29/85, a trust formed in the state of Illinois (the Avedisian Trust) and Vann A. Avedisian, an individual (the Investor Designee) (each an Investor and collectively, with each of their respective Affiliates, the Investors), on the other hand. The Company and the Investors are each herein referred to as a party and collectively, the parties.
WHEREAS, on May 10, 2020, the Company entered into a settlement agreement (the Intrinsic Settlement Agreement) with Intrinsic, the Avedisian Trust, the Investor Designee, KGT Investments, LLC, a Delaware limited liability company, The Khimji Foundation, a charitable trust formed in the state of Texas, Mahmood Khimji, an individual, Bryant L. Keil, an individual, Neil Luthra, an individual, David J. Near, an individual, and Todd W. Smith, an individual;
WHEREAS, the parties to the Intrinsic Settlement Agreement have terminated it as of the execution of this Agreement; and
WHEREAS, the Company and the Investors have determined to come to an agreement with respect to the composition of the Board of Directors of the Company (the Board) and certain other matters, as provided in this Agreement;
NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties, intending to be legally bound hereby, agree as follows:
1. Board Composition and Related Matters.
(a) Effective upon the execution and delivery of this Agreement, the Board:
(i) increases the size of the Board by one director;
(ii) appoints the Investor Designee to fill the vacancy resulting from the increase in the size of the Board pursuant to the foregoing clause (i); and
(iii) nominates the Investor Designee for election to the Board at the Companys 2021 annual meeting of stockholders (the 2021 Annual Meeting), with a term expiring at the Companys 2022 annual meeting of stockholders (the 2022 Annual Meeting).
(b) Simultaneous with the execution and delivery of this Agreement and as a condition to the Investors rights and the Boards obligations herein, the Investor Designee has executed and delivered to the Company a resignation letter in the form attached hereto as Exhibit A.