Regrouping from early-week losses, shares of Potbelly (PBPB 12.55, +0.40 +3.29%) are trending higher this afternoon in reaction to news out last night. The company announced the addition of Joseph Boehm to its Board of Directors as part of a settlement agreement with Ancora Advisors.
As highlighted, Mr. Boehm will serve an initial term through the company's 2018 Annual Meeting of Stockholders, and the company has agreed to include Mr. Boehm (or a replacement designated by the Ancora Parties) in the company's slate of director nominees for election at the 2018 Annual Meeting.
Specifically, Mr. Boehm or his replacement will also serve as a member of the Board's Nominating and Corporate Governance Committee and as a member of the Strategic Review Committee, which is undertaking a comprehensive review of the Company's business strategy and strategic business alternatives.
The aforementioned appointment is part of a settlement agreement with Ancora Advisors, LLC, an investment advisor in Cleveland, Ohio and certain affiliated entities and others. The term of the Agreement is scheduled to continue until the later of the close of business on the date thirty calendar days prior to the last day of the advance notice deadline set forth in the company's by-laws for the company's 2019 Annual Meeting of Stockholders or the date that is thirty calendar days following the last day that Mr. Boehm (or any replacement that is a principal or employee of an Ancora Party) serves as a director of the company. The Ancora Parties are only entitled to representation on the Company's Board so long as they continue to own at least 3% of the company's common stock.
As part of the agreement, during the Standstill Period, the Ancora Parties and Mr. Boehm will not, among other things:
- Acquire shares of the company's common stock such that they would then beneficially own more than 9.9% of the Company's common stock
- Participate in any solicitation of proxies that is inconsistent with Company's recommendations or proposals
- Propose or participate in any change of control of the Company (though the Ancora Parties would be allowed to sell or tender their shares and otherwise receive consideration, pursuant to any such transaction and to vote on any such transaction in their sole discretion)
- Present any stockholder proposal at a stockholder meeting or institute or participate in any litigation against the Company or any of its current or former directors or officers
There was no update on the strategic review mentioned, but PBPB reports Q3 results in about a month (probably first week of November). Look for PBPB to update on the impact of Hurricanes Harvey and Irma during that time.