Exhibit 10.1

COOPERATION AGREEMENT

This Cooperation Agreement (this “Agreement”) is made and entered into as of May
18, 2018 (the “Agreement”) by and among Aratana Therapeutics, Inc., a Delaware
corporation (the “Company”), and the persons and entities listed on Annex A
hereto (collectively, the “Engaged Group” and, for clarity and as applicable,
including each member thereof acting individually) (each of the Company and the
Engaged Group, a “Party” to this Agreement, and collectively, the “Parties”).

RECITALS

WHEREAS, the Company and Engaged Capital, LLC, a member of the Engaged Group,
have engaged in various discussions and communications concerning the Company’s
business, financial performance and strategic plans;

WHEREAS, as of the date hereof, the Engaged Group is the beneficial owner (as
defined in Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as
amended (together with the rules and regulations promulgated thereunder, the
“Exchange Act”)) of 2,400,000 shares of common stock of the Company, $0.001 par
value per share (the “Common Stock”), or approximately 5.1% of the Common Stock
issued and outstanding on the date hereof;

WHEREAS, the Engaged Group submitted a letter to the Company on March 23, 2018
(the “Nomination Letter”) nominating a slate of director candidates to be
elected to the Company’s board of directors (the “Board”) at the 2018 annual
meeting of stockholders of the Company (the “2018 Annual Meeting”); and

WHEREAS, the Company and the Engaged Group have determined to come to an
agreement with respect to certain matters relating to the composition of 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 hereto, intending to be legally bound hereby, agree as follows:

Section 1.Board Appointments, Committees and Related Agreements. 

(a)Board Matters. Immediately upon the execution of this Agreement, the Board
and all applicable committees of the Board shall take all necessary actions to:
(i) accept the resignation tendered by Robert “Rip” B. Gerber, Jr. as a Class I
director of the Company, (ii) increase the size of the Board to ten (10)
directors, (iii) appoint Lowell Robinson as a Class I director to fill the
vacancy created by Mr. Gerber’s resignation (with a term expiring at the 2020
annual meeting of stockholders of the Company) and (iv) appoint Craig Barbarosh
as a new Class III director (with a term expiring at the 2019 annual meeting
(the “2019 Annual Meeting”) of stockholders of the Company (each of Messrs.
Robinson and Barbarosh, a “New Director” and, together, the “New Directors”).
The Company further agrees that prior to the expiration of the Standstill Period
(as defined below), (i) the size of the Board shall not exceed ten (10) members
and (ii) the Company shall not seek to change the classes on which the New
Directors serve.

(b)Replacements.  From the date of this Agreement until the expiration of the
Standstill Period, if any New Director is unable or unwilling to serve as a
director, resigns as a director or is removed as a director and so long as the
Engaged Group continuously beneficially owns in the aggregate

 

 

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at least the lesser of (x) 4.9% of the Company’s then outstanding Common Stock
and (y) 2,295,400 shares of Common Stock, the Engaged Group shall have the
ability to recommend a substitute person(s) to replace such New Director in
accordance with this Section 1(b) (any such replacement director shall be
referred to as the “Replacement Director”). Each candidate for Replacement
Director recommended by the Engaged Group must (A) qualify as “independent”
pursuant to Securities and Exchange Commission (“SEC”) rules and regulations and
Nasdaq listing standards, (B) qualify to serve as a director under the Delaware
General Corporation Law, and (C) have the relevant financial and business
experience to be a director of the Company. The Nominating and Corporate
Governance Committee of the Board (the “Nominating Committee”) shall make its
determination and recommendation regarding whether such candidate so qualifies
within ten (10) Business Days (as defined below) after such candidate has
submitted to the Company the documentation required by Section 1(e)(v) herein.
In the event the Nominating Committee does not accept a substitute person
recommended by the Engaged Group as the Replacement Director (given that the
Nominating Committee cannot unreasonably withhold its consent), the Engaged
Group shall have the right to recommend additional substitute person(s) whose
appointment shall be subject to the Nominating Committee recommending such
person in accordance with the procedures described above. Upon the
recommendation of a Replacement Director candidate by the Nominating Committee,
the Board shall review, approve and vote on the appointment of such Replacement
Director to the Board no later than ten (10) Business Days after the Nominating
Committee’s recommendation of such Replacement Director; provided,  however,
that if the Board does not approve and appoint such Replacement Director to the
Board, the Parties shall continue to follow the procedures of this Section 1(b)
until a Replacement Director is approved and appointed to the Board. For
purposes of this Agreement, “Business Day” means any day that is not (x) a
Saturday, (y) a Sunday or (z) any other day on which commercial banks are
authorized or required by law to be closed in the City of New York.

(c)Strategic Review Committee.  No later than July 1, 2018, the Board shall
establish a Strategic Review Committee of the Board (the “Strategic Review
Committee”) to conduct a strategic review of the Company’s business and make
recommendations to the Board with respect to the Company’s strategy and
opportunities to enhance stockholder value. During the Standstill Period, the
Strategic Review Committee shall consist of three (3) independent Board members
(including one (1) New Director) and the Chief Executive Officer of the
Company.  One of the independent Board members of the Strategic Review Committee
shall be Irvine O. Hockaday, Jr., and either Mr. Hockaday or the New Director
will serve as Chairman of such committee, as determined by the Board.

(d)Director Committee Appointments. Subject to the Company’s Corporate
Governance Guidelines and Nasdaq rules and applicable laws, the Board and all
applicable committees of the Board shall take all actions necessary to ensure
that from and after the appointment of the New Directors to the Board and
through the end of the Standstill Period, (A) Mr. Robinson is appointed to the
Audit Committee, and (B) Mr. Barbarosh is appointed to the Compensation
Committee.  Without limiting Section 1(c) and subject to the Company’s Corporate
Governance Guidelines and Nasdaq rules and applicable laws, the Board and all
applicable committees of the Board shall take all action necessary to ensure
that at all times during the Standstill Period, any committee of the Board
formed after the date of this Agreement shall include at least one (1) New
Director. Without limiting the foregoing, the Board shall give each of the New
Directors the same due consideration for membership to any committee of the
Board as any other independent director.

(e)Additional Agreements. 

(i)The Engaged Group hereby irrevocably withdraws the Nomination Letter.

(ii)The Engaged Group agrees to cause its Affiliates to comply with the terms of
this Agreement and shall be responsible for any breach of this Agreement by any
such Affiliate.  As used

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in this Agreement, the term "Affiliate" shall have the meaning set forth in Rule
12b-2 promulgated by the SEC under the Exchange Act and shall include all
persons or entities that at any time during the term of this Agreement become
Affiliates of any person or entity referred to in this Agreement.  A breach of
this Agreement by an Affiliate of any member of the Engaged Group, if such
Affiliate is not a party hereto, shall be deemed to occur if such Affiliate
engages in conduct that would constitute a breach of this Agreement if such
Affiliate was a party hereto to the same extent as the Engaged Group; provided,
 however, that with respect to the Engaged Group, the term “Affiliate” shall not
include any limited partners or other investors in any member of the Engaged
Group that does not control such member of the Engaged Group.

(iii)Upon execution of this Agreement, the Engaged Group hereby agrees that it
will not, and that it will not permit any of its Affiliates to, directly or
indirectly, (A) nominate or recommend for nomination any person for election at
the 2018 Annual Meeting (except as provided in Section 1(a) or Section 1(b)),
(B) submit any proposal for consideration at, or bring any other business
before, the 2018 Annual Meeting or any special meeting of stockholders held
during the Standstill Period (as defined below), or (C) initiate, encourage or
participate in any “withhold” or similar campaign with respect to the 2018
Annual Meeting.  The Engaged Group shall not publicly or privately encourage or
support any other stockholder or person or entity to take any of the actions
described in this Section 1(e)(iii).

(iv)During the Standstill Period, the Engaged Group agrees that it will, and
shall cause each of its Affiliates to, appear in person or by proxy at each
annual or special meeting of stockholders and vote all shares of Common Stock of
the Company beneficially owned by the Engaged Group or such Affiliate (or
otherwise for which it has voting rights) at such meeting (A) in favor of the
slate of directors recommended by the Board and (B) in accordance with the
Board’s recommendations with respect to any other matter presented to
stockholders of the Company for consideration; provided,  however, that in the
event that Institutional Shareholder Services Inc. (“ISS”) or Glass, Lewis &
Co., LLC (“Glass Lewis”) recommends otherwise with respect to any proposals
(other than the election or removal of directors), the Engaged Group shall be
permitted to vote in accordance with ISS’s or Glass Lewis’ recommendation;
provided,  further, that the Engaged Group shall be permitted to vote in its
sole discretion with respect to any publicly announced proposals relating to a
merger, acquisition, disposition of all or substantially all of the assets of
the Company or other business combination involving the Company requiring a vote
of stockholders of the Company.

(v)Prior to the date of this Agreement, each New Director has submitted to the
Company (A) a fully completed copy of the Company’s standard director & officer
questionnaire and other reasonable and customary director onboarding
documentation required by the Company of all current directors in connection
with the appointment or election of new Board members, and (B) a written
acknowledgment that such New Director agrees to be bound by all agreements,
policies, codes and guidelines applicable to non-employee directors of the
Company. Any Replacement Director will also promptly (but in any event prior to
being placed on the Board in accordance with this Agreement) submit to the
Company (A) a fully completed copy of the Company’s standard director & officer
questionnaire and other reasonable and customary director onboarding
documentation required by the Company of all current non-employee directors in
connection with the appointment or election of new Board members, and (B) a
written acknowledgment that the Replacement Director agrees to be bound by all
lawful agreements, policies, codes and guidelines applicable to non-employee
directors of the Company.

(vi)The Company currently intends to hold the 2018 Annual Meeting no later than
August 20, 2018 and agrees to hold the 2018 Annual Meeting no later than such
date, unless otherwise agreed to in writing by the Parties.

(vii)During the Standstill Period, upon written request from the Company, the
Engaged Group will promptly provide the Company with information regarding the
amount of the securities

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of the Company then beneficially owned by the Engaged Group.  Such information
provided to the Company will be kept strictly confidential unless required to be
disclosed pursuant to law. 

Section 2.Standstill Provisions.

(a)The standstill period (the “Standstill Period”) begins on the date of this
Agreement and shall terminate on the earlier to occur of (i) the date that is
thirty (30) calendar days prior to the first anniversary of the deadline for
submission of stockholder nominations of director candidates for the 2018 Annual
Meeting and (ii) the date that is thirty (30) calendar days prior to the
deadline for submission of stockholder nominations of director candidates for
the 2019 Annual Meeting. The Engaged Group agrees that during the Standstill
Period, neither it nor any of its Affiliates will, and it will cause each of its
Affiliates not to, directly or indirectly, in any manner, alone or in concert
with others:

(i)solicit, or encourage or in any way engage in any solicitation of, any
proxies or consents or otherwise become a “participant” in a “solicitation” (as
such terms are defined in Regulation 14A under the Exchange Act), directly or
indirectly, of proxies or consents (including, without limitation, any
solicitation of consents that seeks to call a special meeting of stockholders or
by encouraging or participating in any “withhold” or similar campaign), in each
case, with respect to securities of the Company in opposition to the
recommendation or proposal of the Board, or recommend or request or induce or
attempt to induce any other person to take any such actions, or seek to advise,
encourage or influence any other person with respect to the voting of the
securities of the Company (including any withholding from voting) or grant a
proxy with respect to voting of any securities of the Company or other voting
securities to any person other than to the Board or persons appointed as proxies
by the Board;

(ii)advise, knowingly encourage, or instruct any person with respect to any of
the matters covered by this Section 2 at any annual or special meeting of
stockholders;

(iii)agree or propose to deposit any securities of the Company in any voting
trust or similar arrangement, or subject any securities of the Company to any
arrangement or agreement with respect to the voting thereof (including but not
limited to a voting agreement or pooling arrangement), other than any such
voting trust, arrangement or agreement solely among the Engaged Group or its
Affiliates which is otherwise constructed in accordance with this Agreement;

(iv)seek or encourage any person to submit nominations in furtherance of a
“contested solicitation” or take other applicable action for the election or
removal of directors with respect to the Company;

(v)form, join or in any way participate in any “group” (within the meaning of
Section 13(d)(3) of the Exchange Act) with respect to the Common Stock (other
than a “group” that includes all or some of the members of the Engaged Group,
but does not include any other entities or persons that are not members of the
Engaged Group as of the date hereof); provided,  however, that nothing herein
shall limit the ability of an Affiliate of the Engaged Group to join the “group”
following the execution of this Agreement, so long as any such Affiliate agrees
to be bound by the terms and conditions of this Agreement;

(vi)(i) call or seek to call or request the call of any meeting of stockholders,
including by written consent, (ii) seek, alone or in concert with others,
representation on, or nominate any candidate to, the Board, except as
specifically set forth in Section 1, (iii) seek the removal of any member of the
Board, except as specifically set forth in Section 1, (iv) solicit consents from
stockholders or otherwise act or seek to act by written consent, or (v) make a
request for a list of the Company’s stockholders or for any books and records of
the Company;

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(vii)except following approval of the Board, purchase or cause to be purchased
or otherwise acquire (i) beneficial ownership of any Common Stock or other
securities of the Company if immediately after the taking of such action, the
Engaged Group together with its Affiliates would, in the aggregate, beneficially
own more than 9.9% of the then outstanding shares of Common Stock, or (ii)
interests in any of the Company’s indebtedness;

(viii)unless the Company is in material breach of this Agreement, make or
publicly advance any request or proposal that the Company or Board amend, modify
or waive any provision of this Agreement, or take any action challenging the
validity or enforceability of any provisions of this Section 2 (provided, that
the Engaged Group may make confidential requests to the Board to amend, modify
or waive any provision of Agreement, which the Board may accept or reject in its
sole discretion, so long as any such request is not publicly disclosed by the
Engaged Group and is made by the Engaged Group in a manner that does not require
the public disclosure thereof by the Company, the Engaged Group or any other
person);

(ix)acquire or agree, offer, seek or propose to acquire, or cause to be
acquired, ownership (including beneficial ownership) of any of the assets or
business of the Company or any rights or options to acquire any such assets or
business from any person, in each case other than securities of the Company;

(x)propose, make any public statement regarding any third party proposal with
respect to, or solicit, negotiate with, or provide any information to any person
with respect to, a merger, consolidation, acquisition of control or other
business combination, tender or exchange offer, purchase, sale or transfer of
assets or securities, dissolution, liquidation, reorganization, change in
structure or composition of the Board (except as specifically set forth in
Section 1);

(xi)disclose publicly, or privately in a manner that could reasonably be
expected to become public, any intention, plan or arrangement inconsistent with
the foregoing; or

(xii)enter into any agreement, arrangement or understanding concerning any of
the foregoing (other than this Agreement) or encourage or solicit any person to
undertake any of the foregoing activities.

(b)Notwithstanding the foregoing, nothing in this Agreement shall prohibit or
restrict the Engaged Group from: (i) communicating privately with the Board or
any of the Company’s officers regarding any matter, so long as such
communications are not intended to, and would not reasonably be expected to,
require any public disclosure of such communications, (ii) communicating
privately with stockholders of the Company and others in a manner that does not
otherwise violate Section 2(a), or (iii) taking any action necessary to comply
with any law, rule or regulation or any action required by any governmental or
regulatory authority or stock exchange that has, or may have, jurisdiction over
the Engaged Group.  Furthermore, for the avoidance of doubt, nothing in this
Agreement shall be deemed to restrict in any way the ability of the New
Directors (or their replacements, as applicable) from fulfilling their duties as
directors.

Section 3.Representations and Warranties of the Company. 

The Company represents and warrants to the Engaged Group that: (a) the Company
has the corporate power and authority to execute this Agreement and to bind it
thereto, (b) this Agreement has been duly and validly authorized, executed and
delivered by the Company, constitutes a valid and binding obligation and
agreement of the Company, and is enforceable against the Company in accordance
with its terms, except as enforcement thereof may be limited by applicable
bankruptcy, insolvency, reorganization,

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moratorium, fraudulent conveyance or similar laws generally affecting the rights
of creditors and subject to general equity principles and (c) the execution,
delivery and performance of this Agreement by the Company does not and will not
(i) violate or conflict with any law, rule, regulation, order, judgment or
decree applicable to the Company, or (ii) result in any breach or violation of
or constitute a default (or an event which with notice or lapse of time or both
could constitute such a breach, violation or default) under or pursuant to, or
result in the loss of a material benefit under, or give any right of
termination, amendment, acceleration or cancellation of, any organizational
document, or any material agreement, contract, commitment, understanding or
arrangement to which the Company is a party or by which it is bound (including
any employment or benefit agreement or arrangement with any employee, officer or
director, and any indebtedness for borrowed money). The Company further
represents and warrants that Mr. Gerber has delivered to the Board an
irrevocable resignation letter pursuant to which he shall resign from the Board
and all applicable committees thereof effective immediately prior to
effectiveness of the appointment of the New Directors.

Section 4.Representations and Warranties of the Engaged Group. 

Each member of the Engaged Group represents and warrants to the Company that (a)
it has the power and authority to execute this Agreement and any other documents
or agreements to be entered into in connection with this Agreement and to bind
the Engaged Group thereto, (b) this Agreement has been duly authorized, executed
and delivered by such person, and is a valid and binding obligation of such
person, enforceable against such person in accordance with its terms, except as
enforcement thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or similar laws generally
affecting the rights of creditors and subject to general equity principles, (c)
the execution of this Agreement, the consummation of any of the transactions
contemplated hereby, and the fulfillment of the terms hereof, in each case in
accordance with the terms hereof, will not conflict with, or result in a breach
or violation of the organizational documents of such person as currently in
effect, and (d) the execution, delivery and performance of this Agreement by
such person does not and will not (i) violate or conflict with any law, rule,
regulation, order, judgment or decree applicable to such person or (ii) result
in any breach or violation of or constitute a default (or an event which with
notice or lapse of time or both could constitute such a breach, violation or
default) under or pursuant to, or result in the loss of a material benefit
under, or give any right of termination, amendment, acceleration or cancellation
of, any organizational document, agreement, contract, commitment, understanding
or arrangement to which such person is a party or by which it is bound. As of
the date of this Agreement, the Engaged Group beneficially owns, in the
aggregate, 2,400,000 shares of Common Stock.

Section 5.Termination.

This Agreement shall terminate at the end of the Standstill Period unless
otherwise mutually agreed in writing by the Parties. Notwithstanding the
foregoing, the provisions of Section 7 through Section 12 and Section 14 shall
survive the termination of this Agreement. No termination of this Agreement
shall relieve any Party from liability for any breach of this Agreement prior to
such termination.

Section 6.Press Release; Communications. 

Promptly following the execution of this Agreement, the Company shall issue a
mutually agreeable press release (the “Press Release”) announcing certain terms
of this Agreement in the form attached hereto as Annex B.  Prior to the issuance
of the Press Release and subject to the terms of this Agreement, neither the
Company (including the Board and any committee thereof) nor the Engaged Group
shall issue any press release or public statement regarding this Agreement or
the matters contemplated hereby without the prior written consent of the other
Party.  During the Standstill Period, neither the Company nor the Engaged Group
shall make any public announcement or statement that is inconsistent with or
contrary to the terms

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of this Agreement.  The Company, with respect to its Form 8-K, and the Engaged
Group, with respect to its amendment to its Schedule 13D, will provide the other
Party, prior to each such filing, a reasonable opportunity to review and comment
on such documents, and each such Party will consider any comments from the other
Party in good faith. 

Section 7.Specific Performance. 

Each of the Engaged Group, on the one hand, and the Company, on the other hand,
acknowledges and agrees that irreparable injury to the other Party hereto may
occur in the event any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached and that such
injury would not be adequately compensable by the remedies available at law
(including the payment of money damages). It is accordingly agreed that the
Engaged Group, on the one hand, and the Company, on the other hand (the “Moving
Party”), shall each be entitled to seek specific enforcement of, and injunctive
relief to prevent any violation of, the terms hereof, and the other Party hereto
will not take action, directly or indirectly, in opposition to the Moving Party
seeking such relief on the grounds that any other remedy or relief is available
at law or in equity. Each of the Parties hereto agrees to waive any bonding
requirement under any applicable law. This Section 7 is not the exclusive remedy
for any violation of this Agreement.

Section 8.Expenses. 

Each Party shall be responsible for its own fees and expenses incurred in
connection with the negotiation, execution and effectuation of this Agreement
and the transactions contemplated hereby, including, but not limited to, any
matters related to the 2018 Annual Meeting, except that the Company will
reimburse the Engaged Group for its reasonable documented expenses, including
legal fees, incurred in connection with the negotiation and entry into this
Agreement and other matters related to the 2018 Annual Meeting, in an amount to
be mutually agreed.

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Section 9.Severability.

If any term, provision, covenant or restriction of this Agreement is held by a
court of competent jurisdiction to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions of this Agreement
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated. The Parties agree to use their commercially reasonable best
efforts to agree upon and substitute a valid and enforceable term, provision,
covenant or restriction for any of such that is held invalid, void or
enforceable by a court of competent jurisdiction.

Section 10.Notices. 

Any notices, consents, determinations, waivers or other communications required
or permitted to be given under the terms of this Agreement must be in writing
and will be deemed to have been delivered: (i) upon receipt, when delivered
personally; (ii) upon confirmation of receipt, when sent by email (provided such
confirmation is not automatically generated); or (iii) one (1) Business Day
after deposit with a nationally recognized overnight delivery service, in each
case properly addressed to the Party to receive the same. The addresses for such
communications shall be:

If to the Company:

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Aratana Therapeutics, Inc.
11400 Tomahawk Creek Parkway, Suite 340
Leawood, Kansas 66211
Attention: John C. Ayres
Email:  jayres@aratana.com

with a copy (which shall not constitute notice) to:

Latham & Watkins LLP
885 Third Avenue
New York, New York 10022
Attention:  M. Adel Aslani-Far
Email: adel.aslanifar@lw.com

If to the Engaged Group:

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Engaged Capital, LLC

610 Newport Center Drive, Suite 250

Newport Beach, California 92660

Attention: Glenn W. Welling

Email: glenn@engagedcapital.com

with a copy (which shall not constitute notice) to:

Olshan Frome Wolosky LLP
1325 Avenue of the Americas
New York, New York 10019
Attention:  Steve Wolosky
                   Ryan Nebel
Email:   swolosky@olshanlaw.com
              rnebel@olshanlaw.com

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Section 11.Applicable Law. 

This Agreement shall be governed by and construed and enforced in accordance
with the laws of the State of Delaware without reference to the conflict of laws
principles thereof. Each of the Parties hereto irrevocably agrees that any legal
action or proceeding with respect to this Agreement and the rights and
obligations arising hereunder, or for recognition and enforcement of any
judgment in respect of this Agreement and the rights and obligations arising
hereunder brought by the other Party hereto or its successors or assigns, shall
be brought and determined exclusively in the Court of Chancery in the State of
Delaware (or, if any such court declines to accept jurisdiction over a
particular matter, any state or federal court located in the State of Delaware).
Each of the Parties hereto hereby irrevocably submits with regard to any such
action or proceeding for itself and in respect of its property, generally and
unconditionally, to the personal jurisdiction of the aforesaid courts and agrees
that it will not bring any action relating to this Agreement in any court other
than the aforesaid courts. Each of the Parties hereto hereby irrevocably waives,
and agrees not to assert in any action or proceeding with respect to this
Agreement, (a) any claim that it is not personally subject to the jurisdiction
of the above-named courts for any reason, (b) any claim that it or its property
is exempt or immune from jurisdiction of any such court or from any legal
process commenced in such courts (whether through service of notice, attachment
prior to judgment, attachment in aid of execution of judgment, execution of
judgment or otherwise) and (c) to the fullest extent permitted by applicable
legal requirements, any claim that (i) the suit, action or proceeding in such
court is brought in an inconvenient forum, (ii) the venue of such suit, action
or proceeding is improper or (iii) this Agreement, or the subject matter hereof,
may not be enforced in or by such courts. EACH OF THE PARTIES HERETO WAIVES THE
RIGHT TO TRIAL BY JURY. 

Section 12.Counterparts. 

This Agreement may be executed in two or more counterparts, each of which shall
be considered one and the same agreement and shall become effective when
counterparts have been signed by each of the Parties and delivered to the other
Party (including by means of electronic delivery).

Section 13.Mutual Non-Disparagement.

Subject to applicable law, each of the Parties covenants and agrees that, during
the Standstill Period (unless otherwise specified in accordance with this
Agreement) or if earlier, until such time as the other Party or any of its
agents, subsidiaries, affiliates, successors, assigns, officers, key employees
or directors shall have breached this Section 13, neither it nor any of its
respective agents, subsidiaries, affiliates, successors, assigns, officers, key
employees or directors, shall in any way criticize, attempt to discredit, make
derogatory statements with respect to, call into disrepute, defame, make or
cause to be made any statement or announcement that relates to and constitutes
an ad hominem attack on, or relates to and otherwise disparages (or causes to be
disparaged) the other Parties or such other Parties’ subsidiaries, affiliates,
successors, assigns, officers (including any current or former officer of a
Party or a Parties’ subsidiaries), directors (including any current or former
director of a Party or a Parties’ subsidiaries), employees, agents, attorneys or
representatives, or any of their practices, procedures, businesses, business
operations, products or services, in any manner.

Section 14.Entire Agreement; Amendment and Waiver; Successors and Assigns; Third
Party Beneficiaries. 

This Agreement (including, for purposes of this Section 14, the Annexes hereto)
contains the entire understanding of the Parties hereto with respect to its
subject matter.  There are no restrictions, agreements, promises,
representations, warranties, covenants or undertakings between the Parties other
than those expressly set forth herein and incorporated pursuant thereto.  No
modifications of this Agreement can be

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made except in writing signed by an authorized representative of each of the
Company and the members of the Engaged Group.  No failure on the part of any
Party to exercise, and no delay in exercising, any right, power or remedy
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of such right, power or remedy by such Party preclude any other or
further exercise thereof or the exercise of any other right, power or
remedy.  All remedies hereunder are cumulative and are not exclusive of any
other remedies provided by law.  The terms and conditions of this Agreement
shall be binding upon, inure to the benefit of, and be enforceable by the
Parties hereto and their respective successors, heirs, executors, legal
representatives, and permitted assigns.  No Party shall assign this Agreement or
any rights or obligations hereunder without, with respect to the Engaged Group,
the prior written consent of the Company, and with respect to the Company, the
prior written consent of the Engaged Group.  This Agreement is solely for the
benefit of the Parties hereto and is not enforceable by any other persons.

 (Signature page follows)

 

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IN WITNESS WHEREOF, the Parties hereto have duly executed and delivered this
Agreement as of the date first above written.

﻿

 

Aratana Therapeutics, Inc.

 

﻿

 

 

 

﻿

 

 

 

﻿

By:

/s/ Steven St. Peter

 

﻿

Name:

Steven St. Peter

 

﻿

Title:

President and CEO

 

﻿

﻿

 

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ENGAGED GROUP: 

 

Engaged Capital Flagship Master Fund, LP

 

 

 

 

﻿

By:

Engaged Capital, LLC
General Partner

 

 

 

 

 

By:

/s/ Glenn W. Welling

 

 

Name:

Glenn W. Welling

 

 

Title:

Founder and Chief Investment Officer

﻿

 

Engaged Capital Flagship Fund, LP

 

 

 

 

﻿

By:

Engaged Capital, LLC
General Partner

 

 

 

 

 

By:

/s/ Glenn W. Welling

 

 

Name:

Glenn W. Welling

 

 

Title:

Founder and Chief Investment Officer

﻿

 

Engaged Capital Flagship Fund, Ltd.

 

 

 

 

 

By:

/s/ Glenn W. Welling

 

 

Name:

Glenn W. Welling

 

 

Title:

Director

﻿

  

Engaged Capital, LLC

 

 

 

 

 

By:

/s/ Glenn W. Welling

 

 

Name:

Glenn W. Welling

 

 

Title:

Founder and Chief Investment Officer

﻿

﻿

Engaged Capital Holdings, LLC

 

 

 

 

﻿

By:

/s/ Glenn W. Welling

﻿

 

Name:

Glenn W. Welling

﻿

 

Title:

Sole Member

 

 

 

 

 

 

 

 

﻿

/s/ Glenn W. Welling

﻿

Glenn W. Welling

﻿

﻿

 

 

 

 

 

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Annex A

﻿

﻿

Members of the Engaged Group

﻿

Engaged Capital Flagship Master Fund, LP

Engaged Capital Flagship Fund, LP

Engaged Capital Flagship Fund, Ltd.

Engaged Capital, LLC

Engaged Capital Holdings, LLC

Glenn W. Welling

﻿

﻿

﻿

﻿

 

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Annex B

﻿

Press Release

﻿

[See Attached]

 

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Aratana Therapeutics Appoints Craig Barbarosh and Lowell Robinson to its Board
of Directors in Cooperation Agreement with Engaged Capital

﻿

LEAWOOD, Kan., May 21, 2018 -- Aratana Therapeutics, Inc. (Nasdaq: PETX), a pet
therapeutics company focused on the licensing, development and commercialization
of innovative therapeutics for dogs and cats, today announced the Company has
appointed Craig Barbarosh and Lowell Robinson to its Board of Directors (Board)
in connection with a cooperation agreement with Engaged Capital, LLC (“Engaged
Capital”). Mr. Barbarosh will be a member of the Board’s Compensation Committee
and Mr. Robinson will be a member of the Audit Committee. Rip Gerber, a member
of the Board, has resigned, and following these changes, Aratana’s Board has
been increased to ten members.

﻿

"We greatly appreciate Rip’s six years of dedicated service on Aratana’s Board.
He has served during an important evolution of our business," said Wendy Yarno,
Chairperson of Aratana Therapeutics’ Board. "We appreciated the constructive
dialogue with Engaged Capital, and we welcome Craig and Lowell to the Board. We
believe they will further strengthen our Board, adding additional skills and
perspective."

﻿

"We invested in Aratana as we see significant value to be realized in the
Company’s innovative therapeutic portfolio," said Glenn W. Welling, Principal
and Chief Investment Officer at Engaged Capital. "Craig and Lowell will bring an
objective and valuable perspective into the boardroom for shareholders with a
disciplined focus on cost and capital allocation, along with a sense of urgency
in delivering on the value of Aratana’s unique assets."

﻿

Craig A. Barbarosh has been a director of Quality Systems, Inc. since September
2009 and is currently the Vice Chairman of the Board of Directors, Chair of the
Compensation Committee and a member of the Special Transactions Committee. For
Sabra Health Care REIT, Inc., he was appointed a director in November 2010 and
serves as the Chair of the Audit Committee and a member of its Compensation
Committee. Mr. Barbarosh is an attorney at a large, international law firm where
he has been a partner since June 2012. Mr. Barbarosh holds his J.D. from the
University of the Pacific, McGeorge School of Law and his B.A. in Business
Economics from the University of California at Santa Barbara.

﻿

Lowell W. Robinson has more than thirty years of executive level experience and
held senior global financial positions, including Chief Financial Officer of
several publicly traded companies. Most recently he served in various roles for
MIVA, Inc., including Chief Financial Officer, Chief Operating Officer and Chief
Administrative Officer. Mr. Robinson has also served on numerous public company
board of directors, including SITO Mobile, Ltd., Higher One Holdings, Inc.,
Support.com, Inc., The Jones Group, Inc., Edison Schools Inc. and International
Wire Group, Inc.  Since 2014, Mr. Robinson has served as a director for EVINE
Live Inc., a digital omnichannel home shopping network. He is also on the board
of The Council for Economic Education and the advisory board for the University
of Wisconsin Economics Department; and previously served on the boards of The
Metropolitan Opera Guild, The Smithsonian Libraries and the University of
Wisconsin School of Business. Mr. Robinson earned his M.B.A. from Harvard
Business School and B.A. in Economics from the University of Wisconsin.

﻿

Mr. Barbarosh and Mr. Lowell were nominated to the Board by Engaged Capital.
Following these appointments, Engaged Capital has agreed to withdraw its
previously nominated slate of directors for election at the Annual Meeting as
part of a mutual cooperation agreement. The full agreement with Engaged Capital
will be filed in a Form 8-K with the Securities and Exchange Commission.

﻿

 

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About Aratana Therapeutics

Aratana Therapeutics is a pet therapeutics company focused on licensing,
developing and commercializing innovative therapeutics for dogs and cats.
Aratana believes that it can leverage the investment in the human
biopharmaceutical industry to bring therapeutics to pets in a capital and time
efficient manner. The Company's pipeline includes therapeutic candidates
targeting pain, inappetence, cancer, viral diseases, allergy and other serious
medical conditions.  Aratana believes the development and commercialization of
these therapeutics will permit veterinarians and pet owners to manage pets'
medical needs safely and effectively, resulting in longer and improved quality
of life for pets. For more information, please visit www.aratana.com.

﻿

About Engaged Capital

Engaged Capital, LLC (Engaged Capital) was established in 2012 by a group of
professionals with significant experience in activist investing in North America
and was seeded by Grosvenor Capital Management, L.P., one of the oldest and
largest global alternative investment managers. Engaged Capital is a limited
liability company owned by its principals and formed to create long-term
shareholder value by bringing an owner’s perspective to the managements and
boards of undervalued public companies. Engaged Capital’s efforts and resources
are dedicated to a single investment style, “Constructive Activism” with a focus
on delivering superior, long-term, risk-adjusted returns for investors. Engaged
Capital is based in Newport Beach, California.

﻿

Forward-Looking Statements Disclaimer

This press release contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. All statements contained in
this press release that do not relate to matters of historical fact should be
considered forward-looking statements.

﻿

These forward-looking statements are based on management's current expectations.
These statements are neither promises nor guarantees, but involve known and
unknown risks, uncertainties and other important factors that may cause our
actual results, performance or achievements to be materially different from any
future results, performance or achievements expressed or implied by the
forward-looking statements, including, but not limited to, the following: our
history of operating losses and our expectation that we will continue to incur
losses for the foreseeable future; failure to obtain sufficient capital to fund
our operations; risks relating to the impairment of intangible assets; risks
pertaining to stockholder class action lawsuits; unstable market and economic
conditions; restrictions on our financial flexibility due to the terms of our
credit facility; our substantial dependence upon the commercial success of our
therapeutics; development of our biologic therapeutic candidates is dependent
upon relatively novel technologies and uncertain regulatory pathways, and
biologics may not be commercially viable; denial or delay of regulatory approval
for our existing or future therapeutic candidates; failure of our therapeutic
candidates that receive regulatory approval to achieve market acceptance or
achieve commercial success; product liability lawsuits that could cause us to
incur substantial liabilities and limit commercialization of current and future
therapeutics; failure to realize anticipated benefits of our acquisitions and
difficulties associated with integrating the acquired businesses; development of
pet therapeutics is a lengthy and expensive process with an uncertain outcome;
competition in the pet therapeutics market, including from generic alternatives
to our therapeutic candidates, and failure to compete effectively; failure to
identify, license or acquire, develop and commercialize additional therapeutic
candidates; failure to attract and retain senior management and key scientific
personnel; our reliance on third-party manufacturers, suppliers and partners;
regulatory restrictions on the marketing of our approved therapeutics and
therapeutic candidates; our small commercial sales organization, and any failure
to create a sales force or collaborate with third-parties to commercialize our
approved therapeutics and therapeutic candidates; difficulties in managing the
growth of our company; significant costs of being a public company; risks
related to the effectiveness of our internal controls; changes in distribution
channels for pet therapeutics; consolidation of our veterinarian customers;
limitations on our ability to use our net operating loss

 

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carryforwards; the impact of tax reform legislation; impacts of generic
products; safety or efficacy concerns with respect to our therapeutic
candidates; effects of system failures or security breaches; delay or
termination of the development of grapiprant therapeutic candidates and
commercialization of grapiprant products that may arise from termination of or
failure to perform under the collaboration agreement and/or the co-promotion
agreement with Elanco; failure to obtain ownership of issued patents covering
our therapeutic candidates or failure to prosecute or enforce licensed patents;
failure to comply with our obligations under our license agreements; effects of
patent or other intellectual property lawsuits; failure to protect our
intellectual property; changing patent laws and regulations; non-compliance with
any legal or regulatory requirements; litigation resulting from the misuse of
our confidential information; the uncertainty of the regulatory approval process
and the costs associated with government regulation of our therapeutic
candidates; failure to obtain regulatory approvals in foreign jurisdictions;
effects of legislative or regulatory reform with respect to pet therapeutics;
the volatility of the price of our common stock; our status as an emerging
growth company, which could make our common stock less attractive to investors;
dilution of our common stock as a result of future financings; the influence of
certain significant stockholders over our business; and provisions in our
charter documents and under Delaware law could delay or prevent a change in
control. These and other important factors discussed under the caption "Risk
Factors" in the Company's Annual Report on Form 10-K filed with the Securities
and Exchange Commission, or SEC, on March 14, 2018, along with our other reports
filed with the SEC could cause actual results to differ materially from those
indicated by the forward-looking statements made in this press release. Any such
forward-looking statements represent management's estimates as of the date of
this press release. While we may elect to update such forward-looking statements
at some point in the future, we disclaim any obligation to do so, even if
subsequent events cause our views to change, except as required under applicable
law. These forward-looking statements should not be relied upon as representing
our views as of any date subsequent to the date of this press release.

﻿

Contacts
For investor inquires:
Craig Tooman
ctooman@aratana.com

(913) 353-1026

﻿

For media inquiries:
Rachel Reiff
rreiff@aratana.com

(913) 353-1050

﻿

﻿

﻿

﻿

 

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