UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

SCHEDULE 14A

(Rule 14a-101)

INFORMATION REQUIRED IN

PROXY STATEMENT

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

Filed by the registrant  ☒                             Filed by a party other than the registrant  ☐

Check the appropriate box:

Potbelly Corporation

(Name of registrant as specified in its charter)

Payment of the filing fee (check the appropriate box):

March 23, 2017April 2, 2019

Dear Fellow Stockholder:Shareholder:

You are cordially invited to attend our Annual Meeting of StockholdersShareholders (including any adjournments or postponements thereof, the “Annual Meeting”) on May 11, 2017.16, 2019. We will hold the meeting at 8:00 a.m., Central Time,local time, at the Westin O’Hare Hotel, 6100 N. River Road, Rosemont,Potbelly Corporation corporate offices located at 111 North Canal Street, 16^th Floor, Chicago, Illinois 60018. Details60606. Included with this letter are the notice of annual meeting of shareholders, a proxy statement detailing the business to be conducted at the Annual Meeting, are given inand a proxy card. You may also find electronic copies of these documents online atwww.proxyvote.com.

Regardless of whether you plan to be with us at the notice of meeting and Proxy StatementAnnual Meeting, it is important that follow.

your voice be heard. Please vote promptly by following the instructions in this Proxy Statement or in the Notice of Internet Availability of Proxy Materials that was sent to you.

Sincerely,

Aylwin Lewis

Chairman of the Board and Chief Executive Officer

Pete Bassi Chairman of the Board		Alan Johnson President and Chief Executive Officer

111 North Canal Street, Suite 850

Chicago, Illinois 60606

NOTICE OF ANNUAL MEETING OF

STOCKHOLDERSSHAREHOLDERS

TO BE HELD ON MAY 11, 201716, 2019

To our Stockholders:Shareholders:

The 20172019 Annual Meeting of StockholdersShareholders (including any adjournments or postponements thereof, the “Annual Meeting”) of Potbelly Corporation (the “Company”) will be held on May 11, 2017,16, 2019, at 8:00 a.m. Central Time,local time, at the Westin O’Hare Hotel, 6100 N. River Road, Rosemont,Potbelly Corporation corporate offices located at 111 North Canal Street, 16^th Floor, Chicago, Illinois 6001860606 for the following purposes:

These items of business are more fully described in the Proxy Statement accompanying this Notice.

The Board of Directors (the “Board”) has set the close of business on March 15, 201726, 2019 as the record date for determining Stockholdersshareholders of the Company entitled to notice of and to vote at the Annual Meeting. A list of the Stockholdersshareholders of record as of the record date will be available for inspection by Stockholders,shareholders, for any purpose germane to the Annual Meeting, at the Company’s offices and at the offices of American Stock Transfer & Trust Company LLC, the Company’s independent share transfer agent, during normal business hours for a period of 10 days prior to the Annual Meeting. The list will also be available for inspection by Stockholdersshareholders at the Annual Meeting.

All Stockholdersshareholders are cordially invited to attend the Annual Meeting in person.EVEN IF YOU CANNOT ATTEND THE ANNUAL MEETING, PLEASE TAKE THE TIME TO PROMPTLY VOTE YOUR PROXY BY CAREFULLY FOLLOWING THE INSTRUCTIONS ON THE NOTICE REGARDINGOF INTERNET AVAILABILITY OF PROXY MATERIALS. ALTERNATIVELY, IF YOU HAVE REQUESTED WRITTEN PROXY MATERIALS, PLEASE SIGN, DATE AND RETURN THE PROXY CARD IN THE RETURN ENVELOPE PROVIDED AS PROMPTLY AS POSSIBLE.

Important Notice Regarding theof Internet Availability of Proxy Materials for the Annual Meeting to be Held on May 11, 2017: the16, 2019: The Proxy Statement for the Annual Meeting and the Annual Report to Stockholderson Form10-K for the fiscal year ended December 30, 2018 are available atwww.proxyvote.com.

By order of the Board of Directors,

Matthew Revord

Senior Vice President, Chief Legal Officer, General CounselChief People Officer and Secretary

March 23, 2017April 2, 2019

IMPORTANT

TO ASSURE THAT YOUR SHARES ARE REPRESENTED AT THE ANNUAL MEETING, WE URGE YOU TO COMPLETE, SIGN AND DATE THE ENCLOSED PROXY CARD AND MAIL IT PROMPTLY IN THE POSTAGEPRE-PAID ENVELOPE PROVIDED, OR VOTE BY TELEPHONE OR THE INTERNET AS INSTRUCTED ON THE PROXY CARD, WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING. YOU CAN REVOKE YOUR PROXY AT ANY TIME BEFORE THE PROXIES YOU APPOINTED CAST YOUR VOTES.

PROXY STATEMENT

Table of Contents

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POTBELLY CORPORATION

PROXYSTATEMENT

The Board of Directors (the “Board“Board of Directors”Directors” or “Board”“Board”) of Potbelly Corporation, a Delaware corporation (the “Company”), is using this Proxy Statement to solicit your proxy for use at our 2017 Annual Meeting. We are sending a Notice Regarding the Availability of Proxy Materials for the2019 Annual Meeting and making proxy materials available to stockholders (or, for those who request, a paper copy of this Proxy Statement andShareholders (including any postponements or adjournments thereof, the form of proxy) on or about March 23, 2017, to our stockholders of record as of the close of business on March 15, 2017.“Annual Meeting”). References in this Proxy Statement to “Potbelly,” the “Company,” “we,” “us,” “our” and similar terms refer to Potbelly Corporation.

We are sending this Proxy Statement, the enclosed proxy card and our Annual Report on Form10-K for the fiscal year ended December 30, 2018 (collectively, the “Proxy Materials”) on or about April 2, 2019, to our shareholders of record as of the close of business on March 26, 2019, the record date. Shareholders of record at the close of business on the record date will be entitled to vote at the Annual Meeting. As of the record date, 24,100,611 shares of our common stock, $0.01 par value per share, were outstanding. Shareholders are entitled to one vote for each share of common stock held. A majority of these shares present in person or represented by proxy at the Annual Meeting will constitute a quorum for the transaction of business.

PROXY STATEMENT SUMMARY

This summary highlights information contained elsewhere in this Proxy Statement. It does not contain all of the information that you should consider, and you should read the entire proxy statement carefully before voting.

Annual Meeting Information

Matters to be Voted on at the Annual Meeting and Board Recommendations

2018 Board Highlights

The following tables provide summary information about our current Board of Directors. Pete Bassi,Ann-Marie Campbell and Harvey Kanter are currently members of the Board of Directors but have decided not to stand forre-election, and therefore are not director nominees. The Board anticipates appointing Dan Ginsberg to the role of Chairman of the Board once Mr. Bassi’s current term has ended at the Annual Meeting. Mr. Ginsberg has been a member of our Board of Directors since 2014 and currently is a member of the Audit Committee and of the Nominating and Corporate Governance Committee.

		Strong Board Refreshment Strong Board Diversity

GENERAL INFORMATION ABOUT THE ANNUAL MEETING AND VOTING

Important Notice Regardingnotice regarding the AvailabilityInternet availability of Proxy Materialsproxy materials for the Annual Meeting to be Held on May 11, 2017

This Proxy Statement, and our Annual Report for the year ended 2016, which includesproxy card and our Annual Report on Form10-K for the fiscal year ended December 30, 2018 are available on the Internetonline atwww.proxyvote.com. Pursuant to rules adopted by the Securities and Exchange Commission (the “SEC”“SEC”), we have elected to provide access to our proxy materials over the Internet. Accordingly, we are sending a Notice Regarding theof Internet Availability of Proxy Materials to our stockholdersshareholders of record as of the close of business on March 15, 2017.26, 2019, the record date. All stockholdersshareholders will have the ability to access our proxy materials on the website referred to in the Notice Regarding theof Internet Availability of Proxy Materials (www.proxyvote.com) or to request to receive a printed set of our proxy materials. Instructions on how to access our proxy materials over the Internet or request a printed copy of our proxy materials may be found in the Notice Regardingof Internet Availability of Proxy Materials. In addition, stockholdersshareholders may request to receive proxy materials in printed form or by email on an ongoing basis by calling1-800-579-1639 or via email tosendmaterial@proxyvote.com.

Why am I receiving these materials?

Our Board of Directors is soliciting proxies in connection with the Annual Meeting. The Company will bear the cost of preparing, printing and mailing the materials in connection with this solicitation of proxies. In addition to mailing these materials, the Company’s officers and other employees may, without being additionally compensated, solicit proxies personally and by mail, telephone or electronic communication. The Company will reimburse banks and brokers for the 2017 Annual Meetingtheir reasonableout-of-pocket expenses related to forwarding proxy materials to beneficial owners of Stockholders.stock or otherwise in connection with this solicitation. On or about March 23, 2017,April 2, 2019, we expect to begin mailing these proxy materials to stockholdersshareholders of record as of the close of business on March 15, 2017,26, 2019, the record date. On

You are receiving this Proxy Statement as a shareholder of the record date, there were 25,063,935 sharesCompany. We request that you promptly use the enclosed proxy card to vote, by telephone, Internet, or mail, in the event you desire to express your support of our common stock outstanding.or opposition to the proposals.

THE BOARD UNANIMOUSLY RECOMMENDS VOTING “FOR” THE ELECTION OF EACH OF THE SEVEN DIRECTOR NOMINEES NAMED IN PROPOSAL 1, “FOR” PROPOSALS 2, 3 AND 5, AND “EVERY YEAR”FOR PROPOSAL 4.

Where and when is the Annual Meeting of Stockholders?Meeting?

We will hold the Annual Meeting of Stockholders on Thursday, May 11, 2017,16, 2019, at 8:00 a.m.,am, Central Time, at the Westin O’Hare Hotel, 6100 N. River Road, Rosemont,Potbelly Corporation corporate offices located at 111 North Canal Street, 16^th Floor, Chicago, Illinois 60018.60606.

What am I being asked to vote on at the meeting?Annual Meeting?

We are asking our stockholdersshareholders to consider the following items:proposals at the Annual Meeting:

Who can vote?

Shareholders of record at the close of business on March 26, 2019, the record date, may vote at the Annual Meeting.

As of the record date, there were 24,100,611 shares of our common stock outstanding.

How many votes do I have?

You have one vote for each share of our common stock that you owned at the closeas of business on the record date. These shares include:

What is the difference between holding shares as a “stockholder“shareholder of record” and as a “beneficial owner”?

If your shares are registered directly in your name with our transfer agent, you are considered the “stockholder“shareholder of record” with respect to those shares. We have sent these proxy materials directly to you.

If your shares are held in a stock brokerage account or by a bank or other nominee, you are considered the “beneficial owner” of the shares held in street name. Your broker, bank or other nominee who is considered the stockholdershareholder of record with respect to those shares has forwarded these proxy materials to you. AsBecause only shareholders of record are entitled to vote at the Annual Meeting, as the beneficial owner, you have the right tomust direct your broker, bank or other nominee on how to vote your shares by using the voting instruction cardform included in the mailing or by following their instructions for voting by telephone or the Internet.

How can I vote my shares?

You can vote by proxy or in person.

What is a proxy?

It is your legal designation ofIf you legally designate another person to vote the stockshares you own. That otherown at a meeting of shareholders according to your instruction, that person is called ayour proxy. If you designate someone as your proxy in a written document, that document is also called a proxy or a proxy card. We have designated two of our officers to serve as proxies for the Annual Meeting of Stockholders to be held on May 11, 2017.Meeting. These officers are Aylwin LewisAlan Johnson and Matthew Revord.

How You Can Votecan I vote my shares?

StockholdersShareholders of Record.StockholdersShareholders of record may vote their shares or submit a proxy to have their shares voted by one of the following methods:

Beneficial Owners.If you are the beneficial owner of your shares of common stock (that is, you hold your shares in “street name” through an intermediary such as a broker, bank or other nominee), you will receive instructionsa voting instruction form from your bank, broker bank or other nominee.

Your bank, broker bank or other nominee will not vote your shares of stock on any mattersProposals 1, 3, 4 or 5 unless you provide them instructions on how to vote your shares of stock.shares. You should instruct your bank, broker or other nominee how to vote your shares of stock by following the

directions provided by your bank, broker or other nominee. Alternatively, you may obtain a proxy“legal proxy” from your bank, broker or other holder of recordnominee and bring it with you to hand in with a ballot in order to be able to vote your shares in person at the meeting.Annual Meeting. If you choose to vote in person at the meeting, you must bring the following: (i) proof of identification, (ii) an account statement or letter from the bank, broker bank or other nominee indicating that you are the beneficial owner of the stockshares and (iii) a signed legal proxy from the stockholdershareholder of record giving you the right to vote the stock.shares. The account statement or letter must show that you were the beneficial owner of the stockshares on March 15, 2017.26, 2019, the record date for the Annual Meeting.

General.If you submit your proxy using any of the methods above, Aylwin LewisAlan Johnson or Matthew Revord will vote your shares in the manner you indicate. You may specify whether your shares should be voted for all, some, or none of the nominees for director, and for, against or againstabstain from voting for Proposals 2, 3, 5 and any other proposals properly introduced at the Annual Meeting.Meeting, and for every year, every two years, or every three years or abstain from voting for Proposal 4. If you vote by telephone or Internet and choose to vote with the recommendation of our Board of Directors, or if you vote by mail, sign your proxy card, and do not indicate specific choices, your shares will be voted “FOR”FOR the election of each of the seven director nominees for director, and “FOR”(Proposal 1),FOR ratification of the appointment of Deloitte & Touche LLP to serve as our independent public accounting firm.firm (Proposal 2);FOR thenon-binding resolution to approve our 2018 named executive officer compensation (Proposal 3); to consider future advisory votes to approve named executive officer compensationEVERY YEAR (Proposal 4); andFOR approval of the Potbelly Corporation 2019 Long-Term Incentive Plan (Proposal 5).

If any othera matter to be considered at the Annual Meeting is presented,timely submitted pursuant to Rule14a-4(c)(1) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), your proxy will authorize Aylwin LewisAlan Johnson or Matthew Revord to vote your shares in accordancetheir discretion with their best judgment.respect to any such matter subsequently raised at the Annual Meeting. At the time this Proxy Statement was filed, we knew of no matters to be considered at the Annual Meeting other than those referenced in this Proxy Statement.

How can I revoke my proxy?

You may revoke a proxy in any one of the following three ways:

IsIf I have already voted by proxy on one or more proposals, can I change my vote confidential?vote?

Yes. Voting tabulations are confidential exceptTo change your vote by proxy, simply sign, date and return the enclosed proxy card or voting instruction form in extremely limited circumstances. Such limited circumstances include contested solicitationthe accompanying postagepre-paid envelope, or vote by proxy via telephone or the Internet in accordance with the instructions on the proxy card or voting instruction form. We strongly urge you to vote by proxy “FOR” the election of proxies, when disclosure is required by law, to defend a claim against us or to assert a claim by useach of the seven director nominees named in Proposal 1, “FOR” Proposals 2, 3, and when a stockholder’s written comments appear5, and “EVER YEAR” on aProposal 4. Only your latest dated proxy or other voting material.will count at the Annual Meeting.

What “quorum” is required for the Annual Meeting?

In order to have a valid stockholdershareholder vote, a quorum must exist at the Annual Meeting. For us,At the Annual Meeting a quorum exists when stockholdersshareholders holding a majority of the issued and outstanding shares entitled to vote are present in person or represented by proxy at athe meeting.

Votes withheld, abstentions andbroker-non votes (discussed below under “—What vote is required to approve each item?

How are the voting results determined?effect of abstentions and brokernon-votes?”)

will be counted as present or represented for purposes of determining whether a quorum exists. In the electionabsence of Class I Directors, your votea quorum, the Annual Meeting may be cast “FOR” eachadjourned by a majority of the nominees or your vote may be “WITHHELD” with respect to one or more of the nominees. The nominees receiving the largest number of “FOR” votes will be elected as directors, up to the maximum number of directorsentitled to be chosen for election. Incast either present in person or represented by proxy or by any officer entitled to preside at the ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm, your vote may be cast “FOR,” “AGAINST” or “ABSTAIN” with respect to that proposal.Annual Meeting.

What vote is required to approve each proposal?

If you

How are a record holder and you sign (including electronic confirmations in the casevoting results determined?

For the election of Internet or telephone voting)directors, your proxy card with no instructions on how to vote your stock willmay be voted in accordance with the recommendationscast “for” each of the Board. If you are a beneficial owner and you sign (including electronic confirmation in the case of Internetnominees or telephone voting) your broker voting instruction card with no instructions on how to vote your stock willmay be voted in the broker’s discretion only“withheld” with respect to “routine” matters butone or more of the nominees. The nominees receiving the largest number of “for” votes will be elected as directors, up to the maximum number of directors to be chosen for election. Each of Proposals 2, 3 and 5 will pass if the total votes cast “for” such proposal exceed the total number of votes cast “against” and “abstain” for such proposal. For Proposal 4, your vote may be cast for “every year,” “every two years,” “every three years” or “abstain.” Proposal 4 is an advisory vote and is not binding on the Company or the Board, and the Board will consider the frequency receiving the most votes cast at the Annual Meeting to be voted with respectthe preference of our shareholders. The Board may decide that it is in the best interests of the Company and our shareholders to hold future advisory votes more or less frequently than the frequency preferred by our shareholders.

What is the effect of abstentions and broker“non-routine”non-votes?

Because the election of directors is determined on the basis of a plurality of the votes cast, abstentions have no effect on the outcome of the election of seven nominees to the Board of Directors (Proposal 1), although abstentions will result in directors receiving fewer votes. Similarly, because the advisory vote regarding the frequency of future advisory votes to approve named executive compensation (Proposal 4) requires shareholders to either indicate a preference between three options (“every year,” “every two years” or “every three years”) or choose to “abstain,” abstentions will only result in fewer votes being cast for the other three options.

Because the approval of a majority of shares present and entitled to vote is required to ratify the appointment of Deloitte & Touche LLP as our independent public accountants for the fiscal year ending December 29, 2019 (Proposal 2), to approve on an advisory basis, thenon-binding matters.resolution to approve our 2018 named executive officer compensation (Proposal 3), and to adopt the Potbelly Corporation 2019 Long-Term Incentive Plan (Proposal 5), abstentions have the effect of a vote against those proposals.

Brokernon-votes occur when brokers do not have discretionary voting authority to vote certain shares held in “street name” on particular“non-routine” proposals, including the election of directors, and the “beneficial owner” of those shares has not instructed the broker to vote on those proposals. If you are a beneficial owner, your broker, bank or other nominee is permitted to vote your shares only with regard to ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm, even if the holder does not receive voting instructions from you. Shares registered in the name of a broker, bank or other nominee, for which proxies are voted on some, but not all matters, will be considered to be represented at the Annual Meeting and voted only as to those matters for which the broker, bank or other nominee has authority to vote.

Because the election of directors is determined on the basis of a plurality of the votes cast, abstentions have no effect on the outcome of the election of Class I directors, although they will result in a director receiving fewer votes. Because the approval of a majority of shares present and entitled to vote is required to ratify the appointment of Deloitte & Touche LLP as our independent public accountants, abstentions have the effect of a vote against those proposals. Brokernon-votes will have no direct effect on the outcome of the election of Classdirectors, on the advisory resolution on executive compensation, on the frequency of future advisory votes on executive compensation or to the approval of our long-term incentive plan.

Will my shares be voted if I directors,do nothing?

If your shares are registered in your name, you must sign and return a proxy card in order for your shares to be voted, unless you vote via telephone or the Internet or vote in person at the Annual Meeting. If you submit (including by telephone or Internet) your proxy card with no instructions on how to vote, your shares will be voted in accordance with the recommendations of the Board.

If your shares of our common stock are held in “street name,” your bank, broker or other nominee has enclosed a proxy card or voting instruction form with this Proxy Statement. We strongly encourage you to authorize your bank, broker or other nominee to vote your shares by following the instructions provided on the proxy card or voting instruction form. If you sign (including electronic confirmation in the case of Internet or telephone voting) your broker voting instruction form with no instructions on how to vote, your stock will be voted in the broker’s discretion only with respect to “routine” matters but will not be voted with respect to“non-routine” matters. The only routine matter on the ballot for the Annual Meeting is the ratification of the appointment of Deloitte & Touche LLP as our independent registered public accountants.accounting firm for the fiscal year ending December 29, 2019 (Proposal 2).

Please return your proxy card or voting instruction form to your bank, broker or other nominee by proxy by signing, dating and returning the enclosed proxy card or voting instruction form in the accompanying postagepre-paid envelope or vote by proxy via telephone or the Internet in accordance with the instructions in the proxy card or voting instruction form. Please contact the person responsible for your account to ensure that a proxy card or voting instruction form is voted on your behalf.

We strongly urge you to vote by proxy “FOR” the election of each of the seven director nominees named in Proposal 1, “FOR” Proposals 2, 3, and 5, and “EVERY YEAR” on Proposal 4 by signing, dating and returning the enclosed proxy card today in the envelope provided. You may also vote by proxy by telephone using the toll-free number on the proxy card or by Internet using the website address on the proxy card. If your shares are held in “street name,” you should follow the instructions on the voting instruction form provided by your bank, broker or other nominee, and provide specific instructions to your bank, broker or other nominee to vote as described above.

What are the fiscal year end dates?

This Proxy Statement provides information about the matters to be voted on at the 2017 Annual Meeting of Stockholders and additional information about Potbelly and its executive officers and directors. Some of the information is provided as of the end of our 20152016, 2017 or 20162018 fiscal years as well as some information being provided as of a more current date. Our fiscal year 2015 ended on December 27, 2015 and our fiscal year 2016 ended on December 25, 2016.2016; our fiscal year 2017 ended on December 31, 2017; and our fiscal year 2018 ended on December 30, 2018.

Where can I find the voting results?

We intend to announce preliminary voting results at the Annual Meeting. We will publishdisclose the finalpreliminary results in a Current Report on Form8-K, which we expect to file on or before May 17, 2017.22, 2019. You can obtain a copy of the Form8-K by logging on to our website athttp://investorsinvestors.potbelly.com/financial-information/sec-filings.potbelly.com/sec.cfm, or by calling the SEC at800-SEC-0330 for the location of the nearest public reference room,, or through the SEC’s EDGAR system atwww.sec.gov. Information on our website does not constitute part of this Proxy Statement.

ANNUAL MEETING PROCEDURES

Admission to the Annual Meeting

Only shareholders of the Company or their duly authorized proxies may attend the Annual Meeting. Proof of ownership of our shares must be presented in order to be admitted to the Annual Meeting. If your shares are held in the name of a bank, broker or other nominee and you plan to attend the Annual Meeting in person, you must bring a brokerage statement, the proxy card mailed to you by your bank or other nominee or other proof of ownership as of the record date, March 26, 2019, to be admitted to the Annual Meeting. Otherwise, proper documentation of a duly authorized proxy must be presented. This proof can be a brokerage statement or letter from a bank, broker or other nominee indicating ownership on the record date, a proxy card, or a valid, legal proxy provided by your bank, broker or other nominee.

After the chairman of the meeting opens the Annual Meeting, further entry will be prohibited. No cameras, recording equipment, electronic devices, large bags, briefcases or packages will be permitted in the Annual Meeting. The use of mobile phones during the Annual Meeting is also prohibited. All persons attending the Annual Meeting will be required to present a valid government-issued picture identification, such as a driver’s license or passport, to gain admittance to the Annual Meeting.

Appraisal Rights

Shareholders do not have appraisal rights under Delaware law in connection with the matters to be voted on at the Annual Meeting.

Shareholder List

A list of our shareholders as of the close of business on March 26, 2019 will be available for inspection during business hours for ten days prior to the Annual Meeting at our principal executive offices located at 111 North Canal Street, Suite 850, Chicago, Illinois 60606 and at the offices of American Stock Transfer & Trust Company, LLC, our independent share transfer agent.

CORPORATE GOVERNANCE

Overview

All of our corporate governance materials, including our corporate governance guidelines, our ethics code of conduct and Board committee charters, are published under the Governance section of our Investor website atwww.potbelly.comhttp://investors.potbelly.com/corporate-governance/governance-documents. Information on our website does not constitute part of this Proxy Statement. These materials are also available in print to any stockholdershareholder without charge upon request made by telephone at (312)951-0600 or by mail to our principal executive offices at Potbelly Corporation, 111 North Canal Street, Suite 850, Chicago, Illinois 60606, Attention: Corporate Secretary. The Board of Directors regularly reviews these materials, Delaware law, the rules and listing standards of the Nasdaq Global Select Market (“NASDAQ”NASDAQ”) and SEC rules and regulations, as well as best practices suggested by recognized governance authorities, and modifies the materials as it believes is warranted.

Director Independence

Our Board of Directors reviews the independence of the current and potential members of the Board of Directors in accordance with independence requirements set forth in the NASDAQ rules and applicable provisions of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (the “Exchange Act”).Act. During its review, the Board of Directors considers transactions and relationships between each director and potential director, as well as any member of his or her immediate family, and the Company and its affiliates, including those related-party transactions contemplated by Item 404(a) of RegulationS-K under the Exchange Act. The Board of Directors must affirmatively determine that the director has no material relationship with the Company, either directly or as a partner, stockholdershareholder or officer of an organization that has a relationship with the Company, that, in the opinion of the Board of Directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. The purpose of this review is to determine whether any such relationships or transactions exist that are inconsistent with a determination that the director is independent. Our Board of Directors has determined that all current directorsnominees except Aylwin LewisAlan Johnson, our President and Chief Executive Officer, are “independent” as such term is defined by NASDAQ rules, our corporate governance standards and the federal securities laws. Our Board also determined that Dan Levitan, who served on

Corporate Environmental and Social Responsibility

We are committed to improving the world by improving the communities we serve. That means being a responsible community member in each of our Boardneighborhoods and always looking for ways to reduce our footprint and improve our relationships with people. We believe it is important to conduct our business in an ethical, legal and socially responsible manner and have undertaken a number of Directors until February  19, 2016, was “independent” as so defined.initiatives to reduce our environmental impact and to ensure a healthy and safe workplace. We expect our suppliers and business partners to adhere to these ideals and to promote these values, and have adopted a Supplier Code of Conduct specifying the standards and principles we expect all of our suppliers to adhere to. A copy of the Supplier Code of Conduct and related information can be found in the “Corporate Responsibility” section of the “About Us” page of our website atwww.potbelly.com.

Ethics Code of Conduct

We have a written ethics code of conduct that applies to our directors, officers and employees. A copy of this code is available athttp://investors.potbelly.com/governance-documents.cfmcorporate-governance/governance-documents. We will disclose information regarding any amendment to or waiver from the provision of this code by posting it on the same portion of our website.

Conflicts of Interest

Pursuant to our ethics code of conduct and our related party transaction policy, each director and executive officer has an obligation not to engage in any transaction that could be deemed a conflict of interest. Our directors may not engage in any transaction that could impact their independence on the Board of Directors. See “Related Party Transactions.Transactions,” on page 48 of this Proxy Statement.

Structure of the Board of Directors

Our Board of Directors currently consists of eight members, comprised of Aylwin Lewis, Peter Bassi,Ann-Marie Campbell, Susan Chapman-Hughes, Dan Ginsberg, Marla Gottschalk, Harvey Kanter and Carl Warschausky. Our certificate of incorporation provides that our Board of Directors shall consist of not more than twelve directors, with the exact number as determined from time to time by resolution of the Board.

Our Board is divided into three classes with staggered terms. However, at our 2018 annual stockholder meeting, our classified board structure will be phased outof Directors currently consists of ten members: Pete Bassi, Joseph Boehm,Ann-Marie Campbell, Susan Chapman-Hughes, Sue Collyns, Dan Ginsberg, Marla Gottschalk, Alan Johnson, Harvey Kanter and beginning at such meeting, allBenjamin Rosenzweig. All current directors, shall be electedexcept for Pete Bassi,Ann-Marie Campbell and Harvey Kanter, are nominees for election for a term expiring at the next annual stockholder meeting. Mr. Lewis,our 2020 Annual Meeting of Shareholders (the “2020 Annual Meeting”). Mr. Bassi, and Ms. Gottschalk are Class I directors and are current nominees for election

CORPORATE GOVERNANCE

with a term expiring at our 2018 annual meeting of stockholders. Ms. Chapman-Hughes and Mr. Warschausky serve as Class II directors with a term expiring at our 2018 annual meeting of stockholders. Ms. Campbell Mr. Ginsberg and Mr. Kanter servehave each given notice to the Board of his or her intent to not stand forre-election, as Class III directors with a term expiring at our 2018 annual meeting of stockholders.

Our amended and restated bylaws (our “Bylaws”) provide that directors may onlyeach will be removed for cause. To removeretiring from service as a director for cause,66-2/3%effective upon the conclusion of his or her current term at the voting power of the outstanding voting stock must vote as a single class to remove the director at an annual or special meeting. Additionally, ourAnnual Meeting. Our certificate of incorporation provides that if a director is removed or if a vacancy occurs, due to either an increase in the size of the Board or the death, resignation, disqualification or other cause, the vacancy willmay be filled solely by the affirmative vote of a majority of the remaining directors then in office, even if less than a quorum remain.quorum.

Board Leadership Structure

Mr. LewisBassi currently serves as both our Chief Executive Officer and our Chairman of the Board. The Board appointed Mr. Bassi to the role of Chairman in August of 2017. Prior to that appointment, Mr. Bassi served as Lead Director and the role of Chairman of the Board and CEO were combined. Mr. Bassi has given notice to the Board of his intent not to stand forre-election to the Board at the Annual Meeting. The Board anticipates appointing Dan Ginsberg to the role of Chairman of the Board once Mr. Bassi’s term has ended at the Annual Meeting. Mr. Ginsberg has been a member of our Board of Directors since 2014 and currently is a member of the Audit Committee and of the Nominating and Corporate Governance Committee. Our Board of Directors has carefully considered its leadership structure and believes at this time that the Company and its stockholdersshareholders are best served by having one person serve both positions. We believe that combining the roles fosters accountability, effective decision-making and alignment between interestsoffices of Chairman of the Board of Directors and management. Mr. Lewis also is able to use thein-depth focus and perspective gained in his executive function to assist our Board of Directors in addressing both internal and external issues affecting the Company.

Our Board of Directors determined asCEO held by different individuals. As part of our corporate governance principles, and as required in our Bylaws, thatin the event the Chairman of the Board and CEO positions are ever recombined, or the Chairman of the Board is not otherwise independent, the Board of Directors shall appoint onean independent director to serve as lead independent director. Mr. Bassi is our lead director and his responsibilities include presiding over periodic meetings of our independent directors and overseeing the function of our Board of Directors and committees. The lead director is also responsible for providing leadership to our Board if any circumstances arise in which the role of the chairman may be, or may be perceived to be, in conflict. The Bylaws also provide that the chairperson of each of our committees will rotate at least once every three years. Our Board of Directors believes that these and other structural features of our Board structure provide for substantial independent oversight of the Company’s management.

Our Board of Directors recognizes that depending on future circumstances, other leadership models may become more appropriate. Accordingly, our Board of Directors will continue to periodically review its leadership structure.

Director Biographies

The following is a list of our current directors and candidates for director, their ages as of December 31, 2016,2018, their occupation during the last five years and certain other biographical information:

Aylwin Lewis,Experience 62, has served as our Chief Executive Officer and President and a director since June 2008. From September 2005 to February 2008, Mr. Lewis served as Chief Executive Officer and President of Sears Holdings Corporation. Prior to that, Mr. Lewis was President of Sears Holdings and Chief Executive Officer of Kmart and Sears Retail following Sears’ acquisition of Kmart Holding Corporation in 2005. Mr. Lewis had been president and Chief Executive Officer of Kmart since October 2004 until that acquisition. From January 2003 to October 2004, he was President, Chief Multi-Branding and Operating Officer of Yum! Brands, Inc. and served as Chief Operating Officer of Yum! Brands from December 1999 to January 2003. Mr. Lewis has nearly 30 years of experience in the restaurant industry. Mr. Lewis is also a member of the board of directors of The Walt Disney Company and Marriott International, Inc. Our Board of Directors believes Mr. Lewis’ qualifications to serve as a member of our Board include his role as Chief Executive Officer and President, his extensive experience in the restaurant industry and his leadership experience as an executive at publicly-traded companies in the restaurant and retail sectors.

Pete BassiPeter Bassi,,67,69, has served as our director since January 2009. Mr. Bassi will retire from the Board upon the conclusion of his current term at the Annual Meeting. Mr. Bassi retired in 2005 as Chairman of Yum! Restaurants International (“YRI”), the international division of Yum! Brands, Inc., where he served as President beginning in July 1997 and was in charge of YRI’s Asian business prior to that. Yum! was created in 1997 in aspin-off from PepsiCo, Inc. Mr. Bassi joined PepsiCo in 1972 and served in various assignments at Pepsi Cola International, Pizza Hut (U.S. and International), Frito Lay and Taco Bell. From 20022015 to 2009,2018, Mr. Bassi served on the board of Mekong Capital; from 2002 to 2009, he served on the board of The Pep Boys – Boys—Manny, Moe & Jack; from 2008 to 2010, he served on the board of El Pollo Loco, Inc.; and from 2013 to 2015, he served on the board of AmRest Holdings SE. Mr. Bassi currently serves on the boardboards of BJ’s Restaurants, Inc., Mekong Capital, a Vietnam private equity firm, and Yum China Holdings, Inc.

Skills and Qualifications

Our Board of Directors believes Mr. Bassi’s qualifications to serve as a member of our Board include his extensive experience in the restaurant industry and his years of experience in his leadership roles as a director and executive officer.

Experience

Ann-Marie Campbell,, 51, 53, has served as our director since August 2014. Ms. Campbell will retire from the Board upon the conclusion of her current term at the Annual Meeting. Ms. Campbell has been Executive Vice President – U.S. Stores for The Home Depot, a home improvement supplies company, since February 2016. Ms. Campbell has worked for The Home Depot since 1985, steadfastly progressing from associate,District Manager to district manager to vice president,Division President, prior to assuming her current position. From 2015 to 2016, Ms. Campbell served on the board of Barnes & Noble, Inc. Ms. Campbell serves on the board of Georgia State University’s Robinson College of Business and of Catalyst, a nonprofit dedicated to expanding opportunities for women and business.

Skills and Qualifications

Our Board of Directors believes Ms. Campbell’s qualifications to serve as a member of our Board include her extensive experience in merchandising, sales and marketing.

Experience

Susan Chapman-Hughes,, 48, 50, has served as our director since May 2014. Since December 2014,February 2018, Ms. Chapman-Hughes has been Senior Vice President, US Large Market, Global Corporate PaymentsHead of Digital Capabilities, Transformation and Operations, Global Commercial Services for American Express Company.Company, a financial services corporation. Prior to assuming her current role, Ms. Chapman-Hughes was Senior Vice President, US Account Development,Large Market, Global Corporate Payments for American Express from December 2014 through February 2018; she was Senior Vice President, US Account Development, Global Corporate Payments from November 2013 through December 2014; and she was the Senior Vice President, Global Real Estate & Workplace Enablement for American Express from July 2010 through November 2013. Before joining American Express Company, Ms. Chapman-Hughes was the Global CAO/Global Head of Operations and Strategy, Citi Realty Services for Citigroup, Inc. Ms. Chapman-Hughes serves on the board of trustees of the National Trust for Historic Preservation and the board of directors of A Better Chance, each of which is a national nonprofit organization.

Skills and Qualifications

Our Board of Directors believes Ms. Chapman-Hughes’s qualifications to serve as a member of our Board include her real estate knowledge and her general management, innovation, financial and digital experience.

Experience

Sue Collyns,52,has served on our Board of Directors since May 2018. Ms. Collyns is currently the Chief Financial Officer of Beachbody LLC, a direct and multi-level marketer of the nation’s most popular fitness brands and weight-loss solutions. Ms. Collyns joined Beachbody, LLC in September 2014. Prior to joining Beachbody, from July 2012 to August 2014, Ms Collyns was the CFO of Dun and Bradstreet Credibility Corp., a technology based subscription company offering web solutions for businesses seeking advice on strengthening their credit score and business reputation. Between December 2011 and June 2012, Ms. Collyns was a consultant to various companies in the technology and restaurant industries. From September 2001 to November 2011, Ms. Collyns was the Chief Financial Officer, the Chief Operating Officer and Company Secretary of California Pizza Kitchen. Prior to 2001, Ms. Collyns held various finance, strategic planning and auditing roles with Sony/BMG Entertainment, Lion/Pepsi, GlaxoSmithkline Pharmaceuticals and PricewaterhouseCoopers. Ms. Collyns also served on the Board of Directors for Zoës Kitchen and was a member of its nominating and governance committee and audit chair from February 2014 to the company’s sale in November 2018.

Skills and Qualifications

Our Board of Directors believes Ms. Collyns’s qualifications to serve as a member of our Board includes her extensive restaurant experience as well as her expertise in finance, investor relations, mergers and acquisitions and strategic planning.

Experience

Dan Ginsberg, 64,66, has served as our director since February 2014. Mr. Ginsberg was Chief Executive Officer of Dermalogica, a U.S.-based skincare brand, from January 2011 through his retirement in August 2014 and has a comprehensive background in branding strategy, marketing and advertising. Mr. Ginsberg’s previous roles include Chief Executive Officer of Red Bull, NA until 2007. Before his Red Bull service, Mr. Ginsberg had been an advertising and marketing executive who held executive positions at agencies such as NW Ayer and Cunningham & Walsh, and Chief Marketing Officer at Hardee’s.

Skills and Qualifications

Our Board of Directors believes Mr. Ginsberg’s qualifications to serve as a member of our Board includes his extensive executive officer experience as well as his marketing and branding expertise.

Experience

Marla Gottschalk, 56,58, has served as our director since November 2009. Ms. Gottschalk was Chief Executive Officer of The Pampered Chef Ltd., a marketer of kitchen tools, food products and cookbooks for preparing food in the home, from May 2006 until December 2013 and its President and Chief Operating Officer from December 2003 until May 2006. Ms. Gottschalk joined Pampered Chef from Kraft Foods, Inc., where she worked for 14 years in various management positions, including Senior Vice President of Financial Planning and Investor Relations for Kraft, Executive Vice President and General Manager of Post Cereal Division and Vice President of Marketing and Strategy of Kraft Cheese Division. Ms. Gottschalk is currently a member of the board of trusteesdirectors of Underwriters Laboratories, a world leader in safety testing and certification, a strategic board advisor for Ocean Spray Cranberries, Inc., and sits on the board of directors for Big Lots, Inc. She has previously served as a director of GATX Corp. and as a director of Visteon Corp.

Skills and Qualifications

Our Board of Directors believes Ms. Gottschalk’s qualifications to serve as a member of our Board include her extensive experience with global companies, her expertise in the food industry and her years of experience in operations and strategic management.

Experience

Alan Johnson, 59, has served as our President and Chief Executive Officer and a director since November 2017. Mr. Johnson was previously the founder of AJ Consulting, a consulting services firm, from September 2015 through November 2017. Prior to that, he was the Chief Executive Officer of BevMo!, a specialty retailer of alcoholic beverages and related products, from April 2007 through September 2015. From 2005 to 2007, Mr. Johnson served as Chief Operating Officer and Chief Financial Officer of Forth & Towne, a division of Gap Inc. Prior to his service with Gap Inc., Mr. Johnson held various executive leadership positions, including at Walt Disney Parks & Resorts, Regal Theaters, PepsiCo and Pizza Hut International. Mr. Johnson is on the Board of Directors of Saucey, a wine, beer and spiritson-demand deliverystart-up. Mr. Johnson has over 30 years of executive leadership experience across a variety of blue chip organizations.

Skills and Qualifications

Our Board of Directors believes Mr. Johnson’s qualifications to serve as a member of our Board include his role as Chief Executive Officer and President, his leadership experience as an executive at publicly-traded companies in the restaurant and retail sectors and his extensive experience in the retail industry.

Experience

Harvey Kanter, 55,57, has served as our director since August 2015. Since January 2014, Mr. Kanter has served as Chairman,will retire from the Board upon the conclusion of his current term at the Annual Meeting. Mr. Kanter is President and Chief Executive Officer and President of Destination XL Group, Inc., a big & tall men’s apparel retailer, having assumed the role on April 1, 2019 after serving as advisor to the acting CEO since February of 2019. Mr. Kanter is also Chairman of the Board for Blue Nile, Inc., an online retailer of diamonds and fine jewelry. Mr. Kanter joinedhas been with Blue Nile insince March 2012, previously serving as its Chief Executive Officer and President. Prior to joining Blue Nile, from January 2009 through March 2012, Mr. Kanterhe was the Chief Executive Officer and President of Moosejaw Mountaineering and Backcountry Travel, Inc., a premium outdoor apparel and gear retailer. Mr. Kanter serves on the board of directors for Blue Nile, Inc. (and certain of its subsidiaries), for thenon-profit organization Jewelers for Children, as a brand ambassador for the Fred Hutch Cancer Research Institute, and as an advisory board member to the Seattle University Executive MBA Program.

Skills and Qualifications

Our Board of Directors believes Mr. Kanter’s qualifications to serve as a member of our Board include his deep retail industry experience, brand expertise and leadership skills.

Carl WarschauskyExperience

Benjamin Rosenzweig, 57, 33, has served as our director since May 2015. Since January 2013,April 2018. Mr. WarschauskyRosenzweig is a partner at Privet Fund Management, LLC. Mr. Rosenzweig joined Privet Fund Management LLC in September 2008. He has been the Presidentan independent director of Cicero Inc., a provider of desktop activity intelligence, since February 23, 2017; Hardinge Inc., a designer, manufacturer and Chief Executive Officerdistributor of World Kitchen, LLC,machine tools, since October 14, 2015; and PFSweb, Inc., a global housewares and consumer products manufacturer.commerce service provider, since May 2013. Mr. Warschausky has been with World Kitchen, LLC since 2008, serving in various roles including Chief Operating Officer, PresidentRosenzweig served on the Board of Directors of StarTek, Inc., a customer engagement business process outsourcer, from May 2011 to December 2018. During his time on the Board for StartTek, Mr. Rosenzweig was chairman of the North America division,audit committee. He served as a director of RELM Wireless Corporation, a manufacturer of wireless communications equipment, from September 2013 to September 2015. Prior to joining Privet in September 2008, Mr. Rosenzweig served as an investment banking analyst in the Corporate Finance group of Alvarez and Chief Financial Officer. Mr. Warschausky serves on the board of directors for World Kitchen, LLC. Marsal, where he completed multiple distressed mergers and acquisitions, restructurings, capital formation transactions and similar financial advisory engagements across several industries.

Skills and Qualifications

Our Board of Directors believes Mr. Warschausky’sRosenzweig’s qualifications to serve as a member of our Board include his extensive finance and general managementfinancial advisory experience in dynamic industries, as well as his global perspective and experience.

CORPORATE GOVERNANCE

across multiple industries.

Board Meetings

Our Board of Directors held sixfifteen meetings during fiscal 2016.2018. In 2016,2018, each of our directors attended at least 75% of the aggregate number of meetings held by the Board of Directors, and held by the committees on which the director served, when such director was a member of the Board of Directors.Directors or such committee. Under our corporate governance guidelines, each director is expected to make every effort to attend each Board meeting and each meeting of any committee on which he or she sits.

The Company’s directors are encouraged to attend our annual meeting of stockholders,shareholders, but we do not currently have a policy relating to directors’ attendance at these meetings. All of our directors serving at the time attended our 2016 annual meeting2018 Annual Meeting of stockholders.Shareholders.

Board Committees

Our Board of Directors has established three standing committees to assist it with its responsibilities. The composition and responsibilities of each committee are described below. The membership and responsibilities of each committee comply with the listing requirements of NASDAQ. Members serve on these committees until their resignation or until otherwise determined by our Board of Directors. A new chairperson of each committee is appointed at least once every three years. In the future, the Board may establish other committees, as it deems appropriate in accordance with our Bylaws, to assist it with its responsibilities.

Audit Committee

The purpose of the audit committeeAudit Committee is set forth in the audit committeeAudit Committee charter and is primarily to assist the Board in overseeing:

The audit committeeAudit Committee currently consists of Ms. Chapman-Hughes, Ms. Collyns, Mr. Ginsberg, and Ms. Gottschalk, and Mr. Warschausky and the chairperson is Mr. Warschausky.Ms. Chapman-Hughes. Our Board of Directors has affirmatively determined that each of these audit committeeAudit Committee members meets the additional heightened independence criteria applicable to directors serving on the audit committeeAudit Committee under NASDAQ and SEC rules. Our Board of Directors has also determined that each of Ms. Chapman-Hughes, Mr. Ginsberg, Ms. Gottschalk, and Mr. Warschauskythese Audit Committee members meet the requirements for financial literacy under the applicable NASDAQ rules and that each is an “audit committee financial expert” under SEC rules. Our Board of Directors has adopted a written charter under which the audit committeeAudit Committee operates. A copy of the charter, which satisfies the applicable standards of the SEC and NASDAQ, is available on our website athttp://investors.potbelly.com/governance-documents.cfmcorporate-governance/governance-documents.

The audit committeeAudit Committee held fivefour meetings during fiscal year 2016.2018.

Nominating and Corporate Governance Committee

The purpose of the nominatingNominating and corporate governance committeeCorporate Governance Committee is set forth in the nominatingNominating and corporate governance committeeCorporate Governance Committee charter and is primarily to:

The nominatingNominating and corporate governance committeeCorporate Governance Committee consists of Mr. Bassi, Mr. Boehm, Ms. Chapman-Hughes, and Mr. Ginsberg and the chairperson is Mr. Bassi. Our Board of Directors has affirmatively determined that each of these Nominating and Corporate Governance Committee members meets the independence criteria applicable to directors serving on the Nominating and Corporate Governance Committee under NASDAQ and SEC rules. Our Board of Directors has adopted a written charter under which the nominatingNominating and corporate governance committeeCorporate Governance Committee operates. A copy of the charter, which satisfies the applicable standards of the SEC and NASDAQ, is available on our website athttp://investors.potbelly.com/governance-documents.cfmcorporate-governance/governance-documents.

The nominatingNominating and corporate governance committeeCorporate Governance Committee held fourten meetings during fiscal year 2016.2018.

Compensation Committee

The purpose of the compensation committeeCompensation Committee is set forth in the compensation committeeCompensation Committee charter and is primarily to:

For more information regarding the process and procedures regarding the determination of executive and director compensation, see “Executive“Director Compensation” and Director Compensation.such information regarding named executive officer compensation, see “Compensation Discussion and Analysis.”

The compensation committeeCompensation Committee consists of Ms. Campbell, Ms. Gottschalk, Mr. Kanter, and Mr. KanterRosenzweig, and the chairperson is Ms. Gottschalk.Campbell. Our Board of Directors has affirmatively determined that each of these compensation committeeCompensation Committee members meets the additional, heightened independence criteria applicable to directors serving on the compensation committeeCompensation Committee under NASDAQ and SEC rules. Our Board of Directors has adopted a written charter under which the compensation committeeCompensation Committee operates. A copy of the charter, which satisfies the applicable standards of the SEC and NASDAQ, is available on our website athttp://investors.potbelly.com/governance-documents.cfmcorporate-governance/governance-documents.

The compensation committeeCompensation Committee held six meetingsduring fiscal year 2016.2018.

Compensation Committee Interlocks and Insider Participation

None of the members of our compensation committeeCompensation Committee is, or has at any time been, an officer or employee of the Company. None of our executive officers currently serves, or in the past year has served, as a member of the board of directors or compensation committee of any other entity that has or has had one or more executive officers who served as a member of our Board or our compensation committeeCompensation Committee during fiscal 2016.2018. No directors served on our compensation committeeCompensation Committee in 20162018 other than Ms. Campbell, Ms. Gottschalk, Mr. Kanter and Mr. Kanter,Rosenzweig, the directors currently serving on such committee, and Dan Levitan, who resigned as a director of the Company in February 2016.committee.

Board’s Role in Risk Oversight

The entire Board of Directors is engaged in risk management oversight. At the present time, the Board of Directors has not established a separate committee to facilitate its risk oversight responsibilities. The Board of Directors expects to continue to monitor and assess whether such a committee would be appropriate. The audit committeeAudit Committee assists the Board of Directors in its oversight of our risk management and the process established to identify, measure, monitor, and manage risks, in particular major financial risks. The compensation committeeCompensation Committee assesses risks arising from our compensation policies and practices. The Board of Directors receives regular reports from management, as well as from the audit committeeAudit Committee and compensation committee,Compensation Committee, regarding relevant risks and the actions taken by management to address those risks.

Policy for Director Recommendations

Our nominatingNominating and corporate governance committeeCorporate Governance Committee is responsible for reviewing and making recommendations to our Board of Directors regarding nominations of candidates for election as a director of the Company. The nominatingNominating and corporate governance committeeCorporate Governance Committee identifies new director candidates through a variety of sources. The committee will consider director candidates recommended by stockholdersshareholders in the same manner it considers other candidates, but it has no obligation to

CORPORATE GOVERNANCE

recommend such candidates. A stockholdershareholder that wants to recommend a candidate for election to the Board of Directors should send a recommendation in writing to Potbelly Corporation, 111 North Canal Street, Suite 850, Chicago, Illinois 60606, Attention: Corporate Secretary. Such recommendation should describe the candidate’s qualifications and other relevant biographical information and provide confirmation of the candidate’s consent to serve as director.

StockholdersShareholders may also nominate directors at the annual meeting by adhering to the advance notice procedure described under “Stockholder“Shareholder Proposals for the 20182020 Annual Meeting” elsewhere inon page 51 of this Proxy Statement.

The nominatingNominating and corporate governance committeeCorporate Governance Committee works with the Board on an annual basis to determine the appropriate characteristics, skills and experience for the Board as a whole and its individual members. In evaluating the suitability of individual Board members, the Board and the nominatingNominating and corporate governance committeeCorporate Governance Committee will take into account factors such as the individual’s general understanding of disciplines relevant to the success of a publicly traded company; understanding of Potbelly’s business; education and professional background, including current employment and other board memberships; reputation for integrity; and any other factors they consider to be relevant. ThePursuant to the provisions of our Corporate Governance Guidelines, the Board will endeavor to reflect the diversity of Potbelly’s stockholders,shareholders, employees and customers and the communities it serves. Additionally, in determining whether to recommend a director forre-election, the nominatingNominating and corporate governance committeeCorporate Governance Committee also considers the director’s past attendance at meetings and participation in and contributions to the activities of the Board.

If the nominatingNominating and corporate governance committeeCorporate Governance Committee determines that an additional or replacement director is required, the committee may take such measures that it considers appropriate in connection with its evaluation of a director candidate, including candidate interviews, inquiry of the person or persons making the recommendation and engagement of an outside search firm to gather additional information. From time to time for a fee, Potbelly has used the executive search firm, Amrop Knightsbridge,Spencer Stuart, to identify and evaluate or assist in identifying and evaluating potential candidates for election as directors. Amrop Knightsbridge has recommended candidates for director in the past.

Communication with the Board

StockholdersShareholders and other parties interested in communicating directly with one or more individual directors or with thenon-management directors as a group, may do so by writing to the individual director or group, c/o Potbelly Corporation, 111 North Canal Street, Suite 850, Chicago, Illinois 60606, Attention: Corporate Secretary. The Board has directed our corporate secretary to forward stockholdershareholder communications to our chairman and any other director to whom the communications are directed. In order to facilitate an efficient and reliable means for directors to receive all legitimate communications directed to them regarding our governance or operations, our corporate secretary will use his discretion to refrain from forwarding the following: sales literature; defamatory material regarding us and/or our directors; incoherent or inflammatory correspondence, particularly when such correspondence is repetitive and was addressed previously in some manner; and other correspondence unrelated to the Board of Director’s corporate governance and oversight responsibilities.

In 2018, Aon Hewitt, which provides occasional consulting services to the Compensation Committee, advised the Compensation Committee on the appropriateness and competitiveness of our compensation programs relative to market practice, our strategy and our internal processes, Aon Hewitt also consulted with the Compensation Committee on restructuring our executive officer long-term incentive with consulting services concerning the introduction of performance share units, which the Company introduced as a new form of equity for executive officers beginning with grants in fiscal year 2019. Aon Hewitt attended Compensation Committee meetings when requested and works with management as necessary to gather and review information required to carry out its obligations.

Mr. Johnson, our CEO, and other members of the management team support the Compensation Committee in the executive compensation process and regularly attend portions of committee meetings. Mr. Johnson provides the Compensation Committee with his perspective regarding the performance of his executive leadership team, including the other named executive officers. Mr. Johnson makes recommendations to the Compensation Committee on the full range of annual executive compensation decisions, except with regard to his own compensation. In accordance with NASDAQ rules, Mr. Johnson was not present when his compensation for fiscal 2018 was being discussed and does not vote on executive compensation matters, and neither Mr. Johnson nor other members of management attended executive sessions of the Compensation Committee.

Role of Market Data and Our Peer Group. As part of the annual executive compensation process, the Compensation Committee reviews compensation levels and practices for executives holding comparable positions at peer group companies and also considers broader compensation survey data. Our market for executive recruiting is generally other restaurant or retail concepts. Fornon-operations executives, we recruit from the general restaurant industry. In evaluating the competitiveness of our executive compensation program, we compare our executive’s compensation against the restaurant industry, specifically the limited-service restaurant segment, and national and local competitors to help ensure we are competitive, focusing on items such as equity awards, merit pay, incentive pay and paid time off.

The Compensation Committee does not explicitly benchmark our executive officers’ compensation to the peers, but the peer group data is one of multiple reference points used to evaluate our executive compensation programs.

2018 Peer Group. Our peer group consists of casual dining, fine dining, quick casual and quick service restaurants. The Compensation Committee and independent directors considered the peer group in connection with the fiscal 2018 executive compensation decisions. The Compensation Committee reviews the composition of the peer group periodically and will make adjustments to the peer group in response to changes in the size of business operations of the Company and of companies in the peer group, companies in the peer group being acquired or taken private, and other companies in the restaurant industry becoming public. The table below lists the companies that were considered for fiscal 2018.