Potbelly Corporation (PBPB) Earnings Call Transcript & Summary

Good morning, and welcome to the 2020 Potbelly Corporation Annual Meeting of Shareholders. I would now like to turn the meeting over to Mr. Alan Johnson, President and Chief Executive Officer of Potbelly Corporation. Mr. Johnson, please go ahead.

Good morning, ladies and gentlemen, and welcome to the 2020 Annual Meeting of Shareholders of Potbelly Corporation. I'm Alan Johnson, President and Chief Executive Officer of the Potbelly Corporation. I will be presiding over this meeting, and it is my pleasure to welcome all of you. We're excited to be hosting our first-ever virtual meeting, which allows us to be more inclusive and reach a greater number of our shareholders. We have shareholders attending via the web portal. As is our custom, we will conduct the business portion of our meeting first and answer questions at the end of the meeting. In keeping with the digital approach to this meeting, it is now shortly after 8 a.m. Central Standard Time on June 24. And in accordance with the notice of this meeting, this meeting is officially called to order. Before proceeding to the business of the meeting, I would like to make certain introductions. We're joined today by Natalie Martini of Deloitte & Touche LLP, company's auditors for the 2019 fiscal year and the company's auditors as of December 29, 2019. Ms. Martini will respond to any questions that arise during the discussion period that are appropriate for Deloitte & Touche to address. The company has appointed American Election Services, LLC to act as the Inspector of Elections. Mr. Charles Zade from American Election Services is with us today. Mr. Zade has previously taken his oath as an Inspector of Elections. After the formal meeting has been adjourned, we will provide time for general questions. Only validated shareholders may ask questions in the designated field on the web portal. Please note that this meeting is being recorded. However, no one attending via the web or telephone is permitted to use any audio recording devices. Matt Revord, Secretary of the company, will now report on the mailing of the notice of this meeting and the presence of a quorum.

Thank you, Alan. This meeting is held pursuant to printed notices mailed on May 20, 2020 and June 12, 2020, to each shareholder of record on June 11, 2020. We've received an affidavit as of the mailing of the notice of the meeting from Broadridge Financial Solutions, Inc. We are informed by the Inspector of Elections that immediately prior to the commencement of the meeting, 8,994,706 shares of the company's voting stock were present in person or by proxy. That is 79.64% of the outstanding voting stock of the company. All documents concerning the notice of this meeting will be filed with the records of the meeting.

Based upon the percentage of the total shares of the company held by the holders of record now present at the meeting, either in person or by proxy, I hereby declare a quorum present at the meeting. On behalf of the Board of Directors of the company, I would like to express my appreciation to all shareholders who returned their proxies. The meeting is now duly convened for the purpose of transacting business properly before it. As specified in the notice of the meeting, the first matter to be acted upon by the shareholders is the election of 8 directors to serve until the 2021 annual meeting. The 8 nominees receiving the largest number of votes of shares present in person or by proxy at this meeting will be elected as directors. The candidates listed in the proxy material, Joseph Boehm, Adrian Butler, Marla Gottschalk, David Head, Alan Johnson, David Near, Benjamin Rosenzweig and Todd Smith, have been nominated by the company's Nominating and Corporate Governance Committee, and the Board of Directors has recommended a vote for the election of all the nominees. Susan Chapman-Hughes and Dan Ginsberg resigned from the Board effective as of June 8, 2020 and June 9, 2020, respectively, and withdrew as director nominees for election at the annual meeting. Any votes that have been submitted with respect to Ms. Chapman-Hughes or Mr. Ginsberg's nomination will be disregarded. In accordance with the bylaws of the company, shareholders are required to provide advanced notice of their intent to nominate candidates for directors. No such notice was received. Therefore, I declare that the nominations for directors closed. As specified in the notice of the meeting, the second matter to be acted upon by the shareholders is a vote to ratify the appointment of Deloitte & Touche LLP as the company's independent auditors for the fiscal year ended December 27, 2020, as described in the company's proxy statement. The Board of Directors has recommended a vote for the ratification of the appointment of Deloitte & Touche LLP as the company's independent auditors for the 2020 fiscal year. As specified in the notice of the meeting, the third matter to be acted upon by the shareholders is a nonbinding advisory vote on the resolution to approve the company's 2019 named executive officer compensation as described in the company's proxy statement. The Board of Directors has recommended a vote for the nonbinding resolution. As specified in notice of the meeting, the fourth matter to be acted upon by the shareholders is a vote to approve the amendment and restatement of the Potbelly Corporation 2019 Long-Term Incentive Plan as described in the company's proxy statement. The Board of Directors has recommended a vote for the approval of the amendment and restatement of the long-term incentive plan. If any shareholder would like to make a comment regarding any of the proposals, please submit your comments through the web portal. Any shareholder who hasn't yet voted or wishes to change their vote may do so by clicking on the Vote button on the web portal and following the instructions there. Shareholders who have sent in proxy or voted via telephone or Internet and do not want to change their vote do not need to take any further action. [Voting]

Now that everyone has had an opportunity to vote, I now declare the polls for the 2020 Potbelly Corporation Annual Meeting of Shareholders closed as at 8:08 Central Time on June 24, 2020. Will the Secretary please report the results of the balloting on the matters to be voted upon by the shareholders?

We are informed by the Inspector of Elections that the ballots have been counted on all matters to be voted upon. And based on the preliminary report of the Inspector of Elections, a plurality of votes cast has been voted for the election of the 8 directors named in the proxy statement with terms expiring on the date of the annual meeting in 2021. More than a majority of the shares present in person or represented by proxy and entitled to vote has been voted to ratify the appointment of Deloitte & Touche LLP as the company's independent auditor for the fiscal year ending December 27, 2020. More than the majority of shares present in person or represented by proxy and entitled to vote has been voted to approve the nonbinding advisory vote on the 2019 compensation for the company's named executive officers. More than a majority of shares present in person or represented by proxy and entitled vote has voted to approve the amendment and restatement of the Potbelly Corporation 2019 Long-Term Incentive Plan. Alan?

I hereby request that the final report of the Inspector of Elections be filed with the minutes of this meeting. We have now come to that part of the agenda providing for general questions and discussions. We will take shareholder questions that are being entered today on the web portal. Only matters that may concern all shareholders should be raised at this time. Please remember to follow the rules for conduct of the meeting.

Alan, at this time, we have no active questions.

Thank you, Matt. If there is no other business, this concludes our meeting. I would again like to express my sincere appreciation to the shareholders who attended this virtual meeting as well as those who submitted their proxies, but were not able to be present in person. The meeting is adjourned.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.