Exhibit 10.1

COOPERATION AGREEMENT

This COOPERATION AGREEMENT (the “Agreement”), dated as of February 25, 2019 is
made and entered into by NN, INC., a Delaware corporation (the “Company”) and
LEGION PARTNERS ASSET MANAGEMENT, LLC, a Delaware limited liability company,
(together with its Affiliates “Legion Partners”) and each of the other persons
listed on the signature page to this Agreement (collectively with Legion
Partners and together with any other Affiliates of Legion Partners, the
“Investor Group” and each individually, an “Investor”).

WHEREAS, the Company and the Investor Group have engaged in discussions
regarding the Company;

WHEREAS, as of the date of this Agreement, the Investor Group beneficially owns
shares of the common stock of the Company, par value $0.01 per share (the
“Common Stock”) totaling, in the aggregate, 3,378,631 shares or approximately
8.0% of the Common Stock, outstanding as of the date of this Agreement;

WHEREAS, William Dries, a Class III member of the Company’s Board of Directors
(the “Board”), has informed the Board that he will retire from the Board, will
not stand for re-election as a Class III member of the Board at the 2019 annual
meeting of stockholders of the Company (the “2019 Annual Meeting”) and has
tendered his resignation to be effective immediately prior to the commencement
of the 2019 Annual Meeting;

WHEREAS, the Company and the Investor Group believe that the best interests of
the Company and its stockholders (including the Investor Group) would be served
at this time by, among other things, agreeing to appoint, subject to the terms
and conditions of this Agreement, Jeri Harman to serve as a Class I member of
the Board (the “Class I Designee”) and Janice Stipp to serve as a Class III
member of the Board (the “Class III Designee”) (collectively, the “New
Directors” and each, a “New Director”), and by the Company and the Investor
Group agreeing to the other covenants and agreements contained herein.

NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants and agreements contained in this Agreement, and for other good and
valuable consideration, the receipt and sufficiency of which are acknowledged,
the parties to this Agreement, intending to be legally bound by this Agreement,
agree as follows:

1.    Board Matters; Board Nominations; Board Policies and Procedures.

(a)    Board Matters. The Governance Committee of the Board (the “Governance
Committee”) has reviewed and approved the qualifications of each New Director to
serve as a member of the Board. In reliance on the information provided to the
Company by the Investor Group and each New Director, the Board has confirmed
that each New Director is “independent” as defined by the applicable standards
of The Nasdaq Stock Market LLC (“Nasdaq”) and by the Securities and Exchange
Commission (“SEC”). In connection with the foregoing, the Board has relied on
information that each New Director has provided to the Company, including
information required to be or customarily disclosed by directors or director
candidates in proxy statements or other filings under applicable law or stock
exchange rules or listing standards, information in connection with assessing
eligibility, independence and other

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criteria applicable to directors, and the Board has assumed that the director
questionnaire and other customary director onboarding documentation provided by
each New Director is or will be fully completed, true and accurate.

Concurrently with the effectiveness of this Agreement, the Board will take all
necessary actions to increase the size of its membership by two (2) and appoint
the Class III Designee as a Class III member of the Board with a term expiring
at the 2019 Annual Meeting and the Class I Designee as a Class I member of the
Board with a term expiring at the 2020 annual meeting of stockholders of the
Company (the “2020 Annual Meeting”). In addition, prior to the mailing of its
definitive proxy statement for the 2019 Annual Meeting, the Board will take all
necessary actions to nominate the Class III Designee (or any Replacement
pursuant to Section 1(c)) as a candidate for election to the Board in place of
William Dries at the 2019 Annual Meeting to serve until the expiration of such
person’s elected term, or until such person’s earlier death, resignation,
disqualification or removal.

At the 2019 Annual Meeting, the Company agrees to recommend, support and solicit
proxies for the election of the Class III Designee (or any Replacement pursuant
to Section 1(c)) in the same manner as for other independent director candidates
nominated by the Company at the 2019 Annual Meeting. The Company agrees that
each New Director shall receive (i) the same compensation for service as a
director as the compensation received by other non-management directors on the
Board, and (ii) such other benefits on the same basis as all other
non-management directors on the Board.

(b)    Board Policies and Procedures. Each party acknowledges that each New
Director (and any Replacement), upon election to the Board, shall be governed by
(i) all applicable laws and regulations, and (ii) all of the same policies,
processes, procedures, codes, rules, standards and guidelines applicable to
members of the Board and shall be required to strictly adhere to the policies on
confidentiality imposed on all members of the Board. Each New Director (and any
Replacement) shall be required to provide the Company with such information as
reasonably requested from all members of the Board as is required to be
disclosed under applicable law or stock exchange regulations, in each case as
promptly as necessary to enable the timely filing of the Company’s proxy
statement and other periodic reports with the SEC. The Board shall determine
appropriate committee assignments for the New Directors taking into account the
composition of the Board, committee assignments and needs of the committees.

(c)    Replacements. If, following the date of this Agreement and prior to the
expiration of the Standstill Period, either of the New Directors is unable or
unwilling to serve as an independent director of the Company for any reason
(other than on account of failure of the Class III Designee to be elected at the
2019 Annual Meeting), the Company shall reasonably consult with Legion Partners
in selecting a replacement director who qualifies as “independent” as defined by
the applicable standards of Nasdaq and by the SEC to be appointed to the Board,
and shall consider in good faith qualified candidates unaffiliated with (and
independent of) Legion Partners who are proposed privately to the Company by
Legion Partners (any director appointed as a replacement for either of the New
Directors, a “Replacement”); provided that the Company’s obligations pursuant to
this Section 1(c) shall terminate at such time as the Investor Group ceases to
have beneficial ownership of at least the lesser of (i) 4.0% of the outstanding
shares of Common Stock and (ii) 1,684,168 shares of Common Stock.

 

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(d)    Size of Board. During the period commencing with the date of this
Agreement through the date of the 2019 Annual Meeting, the Board shall not
increase the size of the Board to more than nine (9) directors, and following
the conclusion of the 2019 Annual Meeting until the expiration of the Standstill
Period (as defined below), the Board shall not increase the size of the Board to
more than eight (8) directors, in each case unless Legion Partners consents in
writing to any proposal to increase the size of the Board; provided that the
Company’s obligations pursuant to this Section 1(d) shall terminate at such time
as the Investor Group ceases to have beneficial ownership of at least the lesser
of (i) 4.0% of the outstanding shares of Common Stock and (ii) 1,684,168 shares
of Common Stock.

2.    Amendments to Certificate of Incorporation and Bylaws. At the time of the
execution and delivery of this Agreement, the Board shall pass resolutions
proposing amendments (and recommending that the stockholders of the Company vote
in favor of such amendments at the Company’s 2019 Annual Meeting) to the
Company’s Restated Certificate of Incorporation (as may be amended from time to
time, the “Certificate of Incorporation”) and the Company’s Amended and Restated
Bylaws (as may be amended from time to time, the “Bylaws”) (such amendments, in
the form attached hereto as Exhibit A), as applicable, to eliminate Classes I,
II and III of the Board so that the Board shall have no classification. The
Company shall include the amendments to the Certificate of Incorporation in its
proxy statement for the 2019 Annual Meeting (the “Declassification Proposal”),
and shall use its reasonable best efforts to cause the Declassification Proposal
to be adopted by the stockholders of the Company by the appropriate vote. All
directors and executive officers of the Company and each Investor agrees to vote
all shares beneficially owned by them or over which they have voting control in
favor of the Declassification Proposal. For the avoidance of doubt, in the event
the Declassification Proposal is approved by the stockholders of the Company,
the Board will make conforming changes to the Bylaws and the members of the
Board will be elected for a one-year term.

3.    Voting. At each annual and special meeting of shareholders held prior to
the expiration of the Standstill Period, each of the Investors agrees to
(i) appear at such stockholders’ meeting or otherwise cause all shares of Common
Stock beneficially owned by each Investor and their respective Affiliates to be
counted as present for purposes of establishing a quorum, (ii) vote, or cause to
be voted, all shares of Common Stock beneficially owned by each Investor and
their respective Affiliates on the Company’s proxy card or voting instruction
form (a) in favor of each of the directors nominated by the Board and
recommended by the Board in the election of directors, (b) against any other
nominees to serve on the Board that have not been recommended by the Board and
(c) with respect to all other matters other than an Extraordinary Matter (as
defined below), in accordance with the Board’s recommendations as identified in
the Company’s proxy statement, including in favor of all other matters
recommended for stockholder approval by the Board, and (iii) not execute any
proxy card or voting instruction form in respect of such stockholders’ meeting
other than the proxy card and related voting instruction form being solicited by
or on behalf of the Board (such proxy card and/or form, the “Company’s card”);
provided, however, in the event that both Institutional Shareholders Services
Inc. (“ISS”) and Glass Lewis & Co., LLC (“Glass Lewis”) recommend otherwise with
respect to any proposal

 

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(other than the election of directors), each of the Investors shall have the
right to vote on the Company’s card in accordance with the recommendation of ISS
and Glass Lewis with respect to such proposal so long as no Investor publicly
discloses such vote; provided, further, that with respect to any Extraordinary
Matter, each of the Investors shall have the ability to vote freely on the
Company’s card. For purposes of this Section 3, an “Extraordinary Matter” means,
with respect to the Company: (i) any merger, acquisition, recapitalization,
restructuring, financing, disposition, distribution, spin-off, sale or transfer
of all or substantially all of the Company’s or any of its Affiliates’ assets in
one or a series of transactions, joint venture or other business combination of
the Company or any of its Affiliates with a third party and (ii) any
implementation of takeover defenses not in existence as of the date of this
Agreement by the Company.

4.    Standstill.

(a)    From the date of this Agreement until the expiration of the Standstill
Period, each Investor shall not, and shall cause their respective Affiliates,
principals, directors, general partners, officers, employees and, to the extent
acting on their behalf, agents and representatives (collectively, the “Related
Persons”) not to, directly or indirectly:

(i)    make any announcement or proposal with respect to, or offer, seek,
propose, or indicate an interest in (A) any form of business combination or
acquisition or other transaction relating to assets or securities of the Company
or any of its subsidiaries, (B) any form of restructuring, recapitalization or
similar transaction with respect to the Company or any of its subsidiaries, or
(C) any form of tender or exchange offer for the Common Stock, whether or not
such transaction involves a Change of Control (as defined below) of the Company
(it being understood that the foregoing shall not prohibit Investors or their
Affiliates from acquiring Common Stock within the limitations set forth in
Section 4(a)(iii));

(ii)    engage in any solicitation of proxies or written consents to vote (or
withhold the vote of) any voting securities of the Company, or conduct any
binding or nonbinding referendum with respect to any voting securities of the
Company, or assist or participate in any other way, directly or indirectly, in
any solicitation of proxies (or written consents) with respect to any voting
securities of the Company, or otherwise become a “participant” in a
“solicitation,” as such terms are defined in Instruction 3 of Item 4 of Schedule
14A and Rule 14a-1 of Regulation 14A, respectively, under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), to vote (or withhold the
vote of) any securities of the Company;

(iii)    purchase or otherwise acquire, or offer, seek, propose, or agree to
acquire, ownership (including beneficial ownership as defined in Rule 13d-3
under the Exchange Act) of any securities of the Company, any direct or indirect
rights or options to acquire any such securities, any derivative securities or
contracts or instruments in any way related to the price of shares of Common
Stock of the Company, or any assets or liabilities of the Company; provided that
the Investor Group, in the aggregate, may acquire beneficial ownership of up to
9.9% of the outstanding shares of Common Stock;

 

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(iv)    seek to advise, encourage, or influence any person with respect to the
voting of (or execution of a written consent in respect of), acquisition of or
disposition of any securities of the Company;

(v)    sell, offer, or agree to sell, directly or indirectly, through swap or
hedging transactions or otherwise, the securities of the Company or any rights
decoupled from the underlying securities held by the Investor Group to any
person or entity not (A) a party to this Agreement or (B) an Affiliate of the
Investor Group (any person or entity not set forth in clauses (A) and (B) shall
be referred to as a “Third Party”) that would knowingly result in such Third
Party, together with its Affiliates, owning, controlling or otherwise having
any, beneficial or other ownership interest representing in the aggregate in
excess of 4.9% of the shares of Common Stock outstanding at such time (except
for Schedule 13G filers that are mutual funds, pension funds or index funds with
no known history of activism);

(vi)    take any action in support of or make any proposal or request that
constitutes (or would constitute if taken): (A) advising, controlling, changing,
or influencing the Board or management of the Company, including any plans or
proposals to change the voting standard with respect to director elections,
number or term of directors or to fill any vacancies on the Board, except as set
forth in this Agreement, (B) any change in the capitalization, stock repurchase
programs and practices, or dividend policy of the Company, (C) any other change
in the Company’s management, business, or corporate structure, (D) seeking to
have the Company waive or make amendments or modifications to the Certificate of
Incorporation or Bylaws, or other actions that may impede or facilitate the
acquisition of control of the Company by any person, (E) causing a class of
securities of the Company to be delisted from, or to cease to be authorized to
be quoted on, any securities exchange, or (F) causing a class of securities of
the Company to become eligible for termination of registration pursuant to
Section 12(g)(4) of the Exchange Act;

(vii)    communicate with stockholders of the Company or others pursuant to Rule
14a-1(l)(2)(iv) under the Exchange Act;

(viii)    engage in any course of conduct with the purpose of causing
stockholders of the Company to vote contrary to the recommendation of the Board
on any matter presented to the Company’s stockholders for their vote at any
meeting of the Company’s stockholders or by written consent;

(ix)    call or seek to call, or request the call of, alone or in concert with
others, any meeting of stockholders, whether or not such a meeting is permitted
by the Certificate of Incorporation or Bylaws, including a “town hall meeting”;

(x)    deposit any Common Stock in any voting trust or subject any Common Stock
to any arrangement or agreement with respect to the voting of any Common Stock
(other than any such voting trust, arrangement or agreement solely among the
Investors or any Affiliates thereof that is otherwise in accordance with this
Agreement);

 

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(xi)    act, seek, facilitate or encourage any person to submit nominations or
proposals, whether in furtherance of a “contested solicitation” or otherwise,
for the appointment, election or removal of directors or otherwise with respect
to the Company or seek, facilitate, encourage, or take any other action with
respect to the appointment, election or removal of any directors;

(xii)    form, join, or in any other way participate in any “group” (within the
meaning of Section 13(d)(3) of the Exchange Act) with respect to the Common
Stock; provided, however, that nothing in this Agreement shall limit the ability
of an Affiliate of the Investor Group to join the “group” following the
execution of this Agreement, so long as any such Affiliate agrees to be bound in
writing by the terms and conditions of this Agreement and, if required under the
Exchange Act, an Investor files a Schedule 13D within two (2) business days
disclosing that such Investor has formed a group with such Affiliate (it being
understood that such Schedule 13D and the contents thereof may not violate any
of the restrictions set forth in this Agreement);

(xiii)    demand a copy of the Company’s list of stockholders or its other books
and records or make any request under any statutory or regulatory provisions of
Delaware law;

(xiv)    commence, encourage, or support any derivative action in the name of
the Company or any class action against the Company or any of its officers or
directors, in each case with the intent of circumventing the provisions of this
Section 4, or take any action challenging the validity or enforceability of any
of the provisions of this Section 4; provided, however, that the foregoing shall
not prevent any Investor from (A) bringing litigation against the Company to
enforce the provisions of this Agreement, (B) making counterclaims with respect
to any proceeding initiated by, or on behalf of, the Company against an
Investor, or (C) responding to or complying with a validly issued legal process
that neither the Investor Group nor any of their Affiliates initiated,
encouraged or facilitated;

(xv)    make any request or submit any proposal to amend or waive the terms of
this Section 4 other than through non-public communications with the Company
that would not be reasonably expected to result in or involve public disclosure
obligations for any party; or

(xvi)    enter into any discussions, negotiations, agreements or understandings
with any person or entity with respect to any action the Investors are
prohibited from taking pursuant to this Section 4, or advise, assist, knowingly
encourage or seek to persuade any person or entity to take any action or make
any statement with respect to any such action, or otherwise take or cause any
action or make any statement inconsistent with any of the foregoing.

Notwithstanding the foregoing, nothing in this Section 4 or elsewhere in this
Agreement shall prohibit or restrict the Investor Group from: (A) communicating
privately with the Board or any executive officer or director of the Company,
regarding any matter, so long as such communications are not intended to, and
would not reasonably be expected to, require any public

 

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disclosure of such communications or otherwise violate this Section 4; (B)
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 Investor Group or any of their
respective Affiliates or Associates, provided that a breach by the Investor
Group of this Agreement is not the cause of the applicable requirement and
provided, that such Investor, to the extent legally permissible, must provide
written notice to the Company of at least two (2) business days prior to taking
any such action that would otherwise be prohibited under this Agreement, and
reasonably consider any comments of the Company regarding such proposed action;
(C) privately communicating to any of their potential investors or investors
publicly available factual information regarding the Company consistent with
prior practice in Legion Partners’ annual and quarterly investor letters,
provided such communications are not reasonably expected to be publicly
disclosed and are understood by all parties to be private communications and do
not otherwise violate this Section 4 or Section 7; and (D) privately
communicating to any stockholders of the Company in a manner that otherwise does
not violate this Section 4 or Section 7 of this Agreement; provided that such
communications are not reasonably expected to be publicly disclosed and are
understood by all parties to be private communications.

(b)    The provisions of this Section 4 shall not limit in any respect the
actions of any director of the Company in his or her capacity as such,
recognizing that such actions are subject to such director’s fiduciary duties to
the Company and its stockholders (it being understood and agreed that neither
the Investors nor any of their Affiliates shall seek to do indirectly through
any director or other party anything that would be prohibited if done by any of
the Investors or their Affiliates).

(c)    For purposes of this Agreement:

(i)    “Affiliate” shall mean any “Affiliate” as defined in Rule 12b-2
promulgated by the SEC under the Exchange Act;

(ii)    “Associate” shall mean any “Associate” as defined in Rule 12b-2
promulgated by the SEC under the Exchange Act;

(iii)    “beneficial owner” and “beneficial ownership” shall have the same
meanings as set forth in Rule 13d-3 promulgated by the SEC under the Exchange
Act;

(iv)    a “Change of Control” transaction shall be deemed to have taken place if
(1) any person is or becomes a beneficial owner, directly or indirectly, of
securities of the Company representing more than 50% of the equity interests and
voting power of the Company’s then outstanding equity securities, (2) the
Company effects a merger or a stock-for-stock transaction whereby immediately
after the consummation of the transaction the Company’s stockholders retain less
than 50% of the equity interests and voting power of the surviving entity’s then
outstanding equity securities or (3) the Company sells substantially all of the
Company’s assets;

 

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(v)    “person” or “persons” shall mean any individual, corporation (including
not-for-profit), general or limited partnership, limited liability company,
joint venture, estate, trust, association, organization or other entity of any
kind or nature; and

(vi)    “Standstill Period” shall mean the period commencing on the date of this
Agreement and ending on the date that is 15 calendar days prior to the last day
of the advance notice period for the submission by stockholders of director
nominations for consideration at the 2020 Annual Meeting (as set forth in the
advance notice provisions of the Bylaws existing on the date hereof).

(d)    At any time during the Standstill Period, upon reasonable written notice
from the Company pursuant to Section 11 hereof, the Investor Group will promptly
provide the Company with information regarding the amount of the securities of
the Company beneficially or economically owned by each such entity or
individual. This ownership information provided to the Company will be kept
strictly confidential unless required to be disclosed pursuant to applicable
laws and regulations, any subpoena, legal process or other legal requirement or
in connection with any litigation or similar proceedings in connection with this
Agreement.

5.    Representations and Warranties of the Company. The Company represents and
warrants to the Investors that (a) the Company has the corporate power and
authority to execute the Agreement and to bind the Company to this Agreement,
(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, 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 violate or conflict with (i) any law, rule, regulation,
order, judgment or decree applicable to it, 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 become a 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.

6.    Representations and Warranties of the Investors. Each Investor, on behalf
of itself, jointly and severally represents and warrants to the Company that
(a) as of the date of this Agreement, such Investor beneficially owns, directly
or indirectly, only the number of shares of Common Stock as described opposite
its name on Exhibit B and Exhibit B includes all Affiliates of any Investors
that own any securities of the Company beneficially or of record and reflects
all shares of Common Stock in which the Investors have any interest or right to
acquire, whether through derivative securities, voting agreements or otherwise,
(b) this Agreement has been duly and validly authorized, executed and delivered
by such Investor, and constitutes a valid and binding obligation and agreement
of such Investor, enforceable against such Investor 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) such Investor has the authority to execute the Agreement on
behalf of itself and the applicable

 

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Investor associated with that signatory’s name, and to bind such Investor to the
terms of this Agreement, (d) each of the Investors shall use its commercially
reasonable efforts to cause each of its respective Related Persons to comply
with the terms of this Agreement, and (e) the execution, delivery and
performance of this Agreement by such Investor does not violate or conflict with
(i) any law, rule, regulation, order, judgment or decree applicable to it, 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 become a 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 member is a party or by which it is bound. Each
Investor further agrees that it shall not compensate any New Director for
serving on the Board or enter into any contract, agreement, arrangement,
commitment or understanding (whether written or oral) relating to the Company
with any director or officer of the Company. Each Investor represents and
warrants that it has no voting commitments or other arrangements or
understandings with any of the New Directors as of the date hereof. Each
Investor represents and warrants that it does not have, directly or indirectly,
any agreements, arrangements or understandings with any person (other than their
own Representatives) with respect to any potential transaction involving the
Company, the acquisition, voting or disposition of any securities of the
Company, or the potential submission of any proposals or director nominations at
the Company (other than Investor’s agreements, arrangements or understandings
with any potential director candidate concerning Investor’s nomination or
potential nomination of such candidate to the Board, all of which matters have
been subsequently addressed by this Agreement).

7.    Non-Disparagement.

(a)    Each Investor agrees that, until the expiration of the Standstill Period,
neither it nor any of its Affiliates will, and it will cause each of its
Affiliates and Related Persons not to, directly or indirectly, in any capacity
or manner, make, express, transmit, speak, write, verbalize or otherwise
communicate in any way (or cause, further, assist, solicit, encourage, support
or participate in any of the foregoing), any remark, comment, message,
information, declaration, communication or other statement of any kind, whether
verbal, in writing, electronically transferred or otherwise, that might
reasonably be construed to be derogatory toward the Company or any of its past
or present directors, officers, Affiliates, subsidiaries, employees, agents or
representatives (collectively, the “Company Representatives”), or that reveals,
discloses, incorporates, is based upon, discusses, includes or otherwise
involves any confidential or proprietary information of the Company or its
subsidiaries or Affiliates, or to malign, harm, disparage, defame or damage the
reputation or good name of the Company, any Company Representative or the
Company’s business; provided, however, that the foregoing shall not prevent the
Investor Group from privately communicating to the Company, or any directors or
executive officers of the Company factual information based on publicly
available information that does not otherwise violate Section 4 of this
Agreement.

(b)    The Company agrees that, until the expiration of the Standstill Period,
neither it nor any of its executive officers or directors will, directly or
indirectly, in any capacity or manner, make, express, transmit, speak, write,
verbalize or otherwise communicate in any way (or cause, further, assist,
solicit, encourage, support or participate in any of the foregoing), any remark,
comment, message, information, declaration, communication or other statement of

 

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any kind, whether verbal, in writing, electronically transferred or otherwise,
that might reasonably be construed to be derogatory toward any Investor or any
of its past or present directors, officers, Affiliates, subsidiaries, employees,
agents or representatives (collectively, the “Investor Representatives”), or
that reveals, discloses, incorporates, is based upon, discusses, includes or
otherwise involves any confidential or proprietary information of any Investor
or its Affiliates, or to malign, harm, disparage, defame or damage the
reputation or good name of any Investor, any Investor Representative or any
Investor’s business; provided, however, that the foregoing shall not prevent
private communications to the Investor Group or Investor Representatives of
factual information based on publicly available information.

(c)    Notwithstanding the foregoing, nothing in this Section 7 or elsewhere in
this Agreement shall prohibit any party to this Agreement from making any
statement or disclosure required under the federal securities laws or other
applicable laws, rules or regulations so long as such requirement is not due to
a breach by any party of this Agreement; provided, that such party must, to the
extent legally permissible and practicable, provide written notice to the other
party at least five (5) business days prior to making any such statement or
disclosure required under the federal securities laws or other applicable laws
that would otherwise be prohibited by the provisions of this Section 7, and
shall reasonably consider any comments of the other party.

(d)    The limitations set forth in Sections 7(a) and 7(b) shall not prevent any
party to this Agreement from responding to any public statement made by the
other party of the nature described in Sections 7(a) and 7(b) if such statement
by the other party was made in breach of this Agreement.

8.    Public Announcements. Promptly following the execution of this Agreement,
the Company and the Investor Group shall issue a mutually agreeable press
release (the “Press Release”) announcing this Agreement, substantially in the
form attached to this Agreement as Exhibit C. Prior to the issuance of the Press
Release, neither the Company nor any of the Investors shall issue any press
release or make any public announcement regarding this Agreement or take any
action that would require public disclosure relating to such action without the
prior written consent of the other party. No party or any of its Affiliates
shall make any public statement (including, without limitation, in any filing
required under the Exchange Act) concerning the subject matter of this Agreement
inconsistent with the Press Release.

9.    SEC Filings.

(a)    No later than four (4) business days following the execution of this
Agreement, the Company shall file a Current Report on Form 8-K with the SEC
reporting the appointment of the New Directors and appending or incorporating by
reference this Agreement as an exhibit. The Company shall provide the Investor
Group with a reasonable opportunity to review and comment on the Form 8-K prior
to it being filed with the SEC and consider in good faith any comments of the
Investor Group.

(b)    No later than two (2) business days following the execution of this
Agreement, the Investor Group shall file an amendment to that certain Schedule
13D, dated January 18, 2019, as amended and may be amended (the “Schedule 13D”)
with respect to the

 

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Company that has been filed with the SEC, reporting the entry into this
Agreement and appending or incorporating by reference this Agreement as an
exhibit thereto (the “Schedule 13D Amendment”). The Investor Group shall provide
the Company with a reasonable opportunity to review and comment on the Schedule
13D Amendment prior to it being filed with the SEC and consider in good faith
any comments of the Company.

(c)    Except for amendments to the Schedule 13D filed by the Investor Group
made solely to report material changes to the information contained therein,
including a change in the level of ownership of Common Stock and the entry into
this Agreement and the issuance of the Press Release, none of the Investors
shall, during the Standstill Period, (i) issue a press release in connection
with this Agreement or the actions contemplated hereby or (ii) otherwise make
any public statement, disclosure or announcement with respect to this Agreement
or the actions contemplated hereby, in each case without the prior written
consent of the Company, unless required by applicable law, rules or regulations
in which case the Investor shall first preview such disclosure or announcement
with the Company in advance of making such disclosure or announcement and
consider comments by the Company.

10.    Specific Performance. Each of the Investors, on the one hand, and the
Company, on the other hand, acknowledges and agrees that irreparable injury to
the other party to this Agreement would occur in the event any of the provisions
of this Agreement are not performed in accordance with their specific terms or
are otherwise breached and that such injury would not be adequately compensable
in monetary damages. It is accordingly agreed that the Investors or any
Investor, on the one hand, and the Company, on the other hand (the “Moving
Party”), shall each be entitled to specific enforcement of, and injunctive or
other equitable relief as a remedy for any such breach or to prevent any
violation or threatened violation of, the terms of this Agreement, and the other
party to this Agreement 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. The parties further agree to
waive any requirement for the security or posting of any bond in connection with
any such relief. Such remedies shall not be deemed to be the exclusive remedies
for a breach of this Agreement but shall be in addition to all other remedies
available at law or equity.

11.    Notice. 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 receipt, when sent by email or
facsimile (provided confirmation of transmission is mechanically or
electronically generated and kept on file by the sending party); 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 and facsimile numbers for such communications shall be:

 

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   If to the Company:       NN, Inc.       6210 Ardrey Kell Road      
Charlotte, NC 28277       Attn: Matt Heiter       Email: matt.heiter@nninc.com
   with a copy (which shall not constitute notice) to:       Simpson Thacher &
Bartlett LLP       425 Lexington Avenue       New York, NY 10017       Attn:   
Eric Swedenburg       Email:    eswedenburg@stblaw.com    If to any Investor:   
   9401 Wilshire Boulevard, Suite 705       Beverly Hills, California 90212   
   Attn:    Christopher S. Kiper       Email:    ckiper@legionpartners.com   
with copies (which shall not constitute notice) to:       Olshan Frome Wolosky
LLP       1325 Avenue of the Americas       New York, NY 10019       Attn:   
Steve Wolosky          Elizabeth Gonzalez-Sussman       Email:   
swolosky@olshanlaw.com          egonzalez@olshanlaw.com

12.    Governing Law. This Agreement and any claim, controversy or dispute
arising under or related to this Agreement, the relationship of the parties,
and/or the interpretation and enforcement of the rights and duties of the
parties shall be governed by and construed and enforced in accordance with the
laws of the State of New York, without regard to any conflict of laws provisions
thereof.

13.    Jurisdiction. Each party to this Agreement agrees, on behalf of itself
and its Affiliates and Associates, that any actions, suits or proceedings
arising out of or relating to this Agreement or the transactions contemplated by
this Agreement will be brought solely and exclusively in any state or federal
court in the State of New York (and the parties agree not to commence any
action, suit or proceeding relating to this Agreement or the transactions
contemplated by this Agreement except in such courts), and further agrees that
service of any process, summons, notice or document by U.S. registered mail to
the respective addresses set forth in Section 11 will be effective service of
process for any such action, suit or proceeding

 

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brought against any party in any such court. Each party, on behalf of itself and
its Affiliates and Associates, irrevocably and unconditionally waives any
objection to the laying of venue of any action, suit or proceeding arising out
of this Agreement or the transactions contemplated by this Agreement, in any
state or federal court in the State of New York, and further irrevocably and
unconditionally waives and agrees not to plead or claim in any such court that
any such action, suit or proceeding brought in any such court has been brought
in an improper or inconvenient forum.

14.    Waiver of Jury Trial. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY
CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE
COMPLICATED AND DIFFICULT ISSUES AND, THEREFORE, EACH SUCH PARTY IRREVOCABLY AND
UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY LEGAL ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY TO THIS AGREEMENT
CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT SEEK TO
ENFORCE THE FOREGOING WAIVER IN THE EVENT OF A LEGAL ACTION, (B) SUCH PARTY HAS
CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) SUCH PARTY MAKES THIS WAIVER
VOLUNTARILY, AND (D) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT
BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION
14.

15.    Representative. Each Investor irrevocably appoints Legion Partners Asset
Management, LLC as its attorney-in-fact and representative (the “Legion
Representative”), in such Investor’s place and stead, to do any and all things
and to execute any and all documents and give and receive any and all notices or
instructions in connection with this Agreement and the transactions contemplated
by this Agreement. The Company shall be entitled to rely, as being binding on
each Investor, upon any action taken by the Legion Representative or upon any
document, notice, instruction or other writing given or executed by the Legion
Representative.

16.    Entire Agreement. This Agreement constitutes the full and entire
understanding and agreement among the parties with regard to the subject matter
of this Agreement, and supersedes all prior and contemporaneous agreements,
understandings and representations, whether oral or written, of the parties with
respect to the subject matter of this Agreement. There are no restrictions,
agreements, promises, representations, warranties, covenants or undertakings,
oral or written, between the parties other than those expressly set forth in
this Agreement.

17.    Headings. The section headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.

18.    Waiver. No failure on the part of any party to exercise, and no delay in
exercising, any right, power or remedy under this Agreement shall operate as a
waiver of such right, power or remedy, nor shall any single or partial exercise
of such right, power or remedy by such party preclude any other or further
exercise of such right, power or remedy or the exercise of any other right,
power or remedy.

 

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19.    Remedies. All remedies under this Agreement are cumulative and are not
exclusive of any other remedies provided by law or equity.

20.    Construction. When a reference is made in this Agreement to a Section,
such reference shall be to a Section of this Agreement, unless otherwise
indicated. The headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement. Whenever the words “include,” “includes” and “including” are used in
this Agreement, they shall be deemed to be followed by the words “without
limitation.” The words “hereof, “herein” and “hereunder” and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement. The word “will” shall be
construed to have the same meaning as the word “shall.” The words “dates hereof”
will refer to the date of this Agreement. The word “or” is not exclusive. The
definitions contained in this Agreement are applicable to the singular as well
as the plural forms of such terms. Any agreement, instrument, law, rule or
statute defined or referred to herein means, unless otherwise indicated, such
agreement, instrument, law, rule or statute as from time to time amended,
modified or supplemented.

21.    Severability. If any provision of this Agreement is held invalid or
unenforceable by any court of competent jurisdiction, the other provisions of
this Agreement shall remain in full force and effect. Any provision of this
Agreement held invalid or unenforceable only in part or degree shall remain in
full force and effect to the extent not held invalid or unenforceable. The
parties further agree to replace such invalid or unenforceable provision of this
Agreement with a valid and enforceable provision that will achieve, to the
extent possible, the purposes of such invalid or unenforceable provision.

22.    Amendment. This Agreement may be modified, amended or otherwise changed
only in a writing signed by the Company, on the one hand, and the Legion
Representative (on behalf of itself and the other members of the Investor
Group), on the other hand.

23.    Termination. Upon the expiration of the Standstill Period in accordance
with Section 4(c)(vi) hereof or upon the public announcement by the Company of
entry into a definitive agreement that would constitute a Change of Control,
this Agreement shall immediately and automatically terminate. Notwithstanding
the foregoing, the provisions of Section 10 through Section 27 shall survive the
termination of this Agreement. No termination of this Agreement shall relieve
any party from liability for any breach of this Agreement that occurred prior to
such termination.

24.    Successors and Assigns. The terms and conditions of this Agreement shall
be binding upon and be enforceable by the parties hereto and the respective
successors, heirs, executors, legal representatives and permitted assigns of the
parties, and inure to the benefit of any successor, heir, executor, legal
representative or permitted assign of any of the parties; provided, however,
that no party may assign this Agreement or any rights or obligations hereunder
without, with respect to any Investor, the express prior written consent of the
Company, and with respect to the Company, the prior written consent of the
Legion Representative.

 

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25.    No Third-Party Beneficiaries. The representations, warranties and
agreements of the parties contained herein are intended solely for the benefit
of the party to whom such representations, warranties or agreements are made,
and shall confer no rights, benefits, remedies, obligations, or liabilities
hereunder, whether legal or equitable, in any other person or entity, and no
other person or entity shall be entitled to rely thereon.

26.    Counterparts; Facsimile / PDF Signatures. This Agreement and any
amendments hereto may be signed in any number of counterparts, each of which
shall be an original, with the same effect as if the signatures thereto and
hereto were upon the same instrument. This Agreement shall become effective when
each party hereto shall have received a counterpart hereof signed by the other
parties hereto. In the event that any signature to this Agreement or any
amendment hereto is delivered by facsimile transmission or by email delivery of
a portable document format (.pdf or similar format) data file, such signature
shall create a valid and binding obligation of the party executing (or on whose
behalf such signature is executed) with the same force and effect as if such
facsimile or “.pdf” signature page were an original thereof.

27.    Expenses. Each of the Company and the Investors 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 attorneys’ fees incurred in connection
with the negotiation and execution of this Agreement and all other activities
related to the foregoing; provided, however, that the Company shall reimburse
the Investor Group, within 30 days of the date that the Company receives
reasonably satisfactory supporting documentation, for its reasonable and
documented out-of-pocket third party expenses, including legal fees and
expenses, as actually incurred in connection with the Investor Group’s
involvement with the Company prior to the date hereof and the negotiation and
execution of this Agreement, in an amount not to exceed $50,000.

[Signature Page Follows]

 

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

 

NN, INC, By:  

/s/ Richard D. Holder

Name:   Richard D. Holder Title:   President and Chief Executive Officer

 

LEGION PARTIES: LEGION PARTNERS, L.P. I By:   Legion Partners Asset Management,
LLC   Investment Advisor By:  

/s/ Christopher S. Kiper

Name:   Christopher S. Kiper Title:   Managing Director LEGION PARTNERS, L.P. II
By:   Legion Partners Asset Management, LLC   Investment Advisor By:  

/s/ Christopher S. Kiper

Name:   Christopher S. Kiper Title:   Managing Director LEGION PARTNERS SPECIAL
OPPORTUNITIES, L.P. XI By:   Legion Partners Asset Management, LLC   Investment
Advisor By:  

/s/ Christopher S. Kiper

Name:   Christopher S. Kiper Title:   Managing Director

 

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LEGION PARTNERS, LLC By:   Legion Partners Holdings, LLC   Managing Member By:  

/s/ Christopher S. Kiper

Name:   Christopher S. Kiper Title:   Managing Member LEGION PARTNERS ASSET
MANAGEMENT, LLC By:  

/s/ Christopher S. Kiper

Name:   Christopher S. Kiper Title:   Managing Director LEGION PARTNERS
HOLDINGS, LLC By:  

/s/ Christopher S. Kiper

Name:   Christopher S. Kiper Title:   Managing Member Christopher S. Kiper

/s/ Christopher S. Kiper

Raymond White

/s/ Raymond White

 

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