Document:

EXHIBIT 10.2

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT
(the “Agreement”), dated September 3, 2019 is entered into by and among Acacia Research Group LLC, a Texas limited
liability company ("Acacia”), Acacia Research Corporation (the “Company”) and Alfred Tobia (“You”),
on the following terms and conditions.

 

BACKGROUND

 

Acacia, the Company and You desire to enter
into this Agreement, subject to the terms and conditions as set forth below.

 

NOW, THEREFORE, in
consideration of the foregoing and the mutual covenants set forth herein, Acacia and You, intending to be legally bound, hereby
agree as follows:

 

1.   
Position and Responsibilities. You will be employed as Chief Investment Officer of
the Company and serve as a member of the Board of Directors of the Company (the “Board”) with duties, responsibilities
and authorities commensurate with such positions, reporting directly and exclusively to the Board. The start date at which You
will begin employment at Acacia will be September 3, 2019 (“Start Date”). You agree that, at all times during your
employment hereunder, You will be subject to and comply with Acacia's personnel policies including Acacia's Insider Trading Policy
(attached hereto as Exhibit A), Sexual Harassment Policy and general Harassment Policy (attached hereto as Exhibits B-1 and B-2,
respectively) and Employee Handbook, all as may be modified from time to time. You will devote substantially all of your working
time and efforts to Acacia's business; provided that, so long as such activities do not materially interfere with Your duties to
the Company, You shall be permitted to (a) serve on civic and charitable boards, (b) manage personal, financial and legal affairs
and investments and (c) serve on at least one additional for profit board of directors (and any committees related thereto); provided,
further, that in all events you shall be permitted to continue to engage in the activities set forth on Schedule A. The Company
shall adopt, and You agree to be subject to and comply with, policies related to Your outside business activities, which policies
shall also address any fees You may receive during the term of Your employment in connection with serving on boards or committees
of any third party entities.

 

2.   
 Employment. Your employment will be at-will and may be terminated by Acacia or You
for any reason. This at-will arrangement cannot be changed during your employment, unless agreed to in writing by the Board. 

 

3.   
Compensation. For all services rendered by You pursuant to this Agreement, Acacia will
pay You, subject to your adherence to all of the terms of this Agreement, and You will accept as full compensation hereunder, the
following:

 

3.1  Salary.
Acacia will pay You an annual salary of $475,000, which shall be reviewed by the Compensation Committee of the Board (the “Committee”)
at least annually for increase, but not decrease (such salary as increased from time to time (the “Salary”). The Salary
will be subject to all appropriate federal and state withholding taxes and will be payable bi-weekly, in accordance with the normal
payroll procedures of Acacia. In addition, within 15 days of the Start Date, Acacia will pay you $79,166.66 in consideration for
services provided by You on behalf of the Company from July 1, 2019 through the date hereof.

 

3.2  Discretionary
Bonus. At the end of each calendar year, if employed at Acacia, You will be eligible for a discretionary cash bonus of
between 50% and 150% of the Salary, with a target bonus of 100% of Your Salary (the “Target Bonus”), based on the
achievement of operational and strategic performance goals established by the Committee in consultation with You. For
calendar year 2019, (a) the performance goals established by the Committee shall be strategic, (b) the bonus paid shall be
prorated based on the number of days that You were employed during the year commencing on the Start Date, and (c) the bonus
shall be paid to You no later than December 31, 2019. Except as provided in the immediately preceding sentence, such
discretionary annual bonus will be evaluated and paid (if applicable) no later than the end of the month following the
calendar year to which such bonus relates. The discretionary annual bonus will be subject to all appropriate federal and
state withholding taxes in accordance with the normal payroll procedures of Acacia.

 

 

 

 

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3.3  Restricted
Stock Units. As of the date hereof, You will be granted restricted stock units of the Company (Nasdaq: ACTG) having a
grant date fair value of $650,000 on the terms and conditions (including the vesting terms) set forth on Exhibit RS (the
“Initial Equity Grant”). 

 

3.4  Inducement
Payment. In consideration for Your agreement to accept Your position with Acacia and to relinquish various positions
that You currently hold with other organizations, Acacia shall pay to you a lump sum cash payment of $350,000, of which
$150,000 has been paid to you prior to the date hereof and of which the remaining $200,000 shall be paid to you within 15
days of the Start Date. The payment described in the immediately preceding sentence will be subject to all appropriate
federal and state withholding taxes in accordance with the normal payroll procedures of Acacia. 

 

3.5  Benefits
and Perquisites. Acacia will make benefits available to You, including, but not limited to, health, death and disability
insurance, and the like, to the extent and on the terms made available to other similarly situated executives of Acacia. This
provision does not alter Acacia's right to modify or eliminate any employee benefit and does not guarantee the continuation
of any kind or level of benefits. Except to the extent otherwise expressly provided herein, all such benefits will cease upon
the termination of your employment under this Agreement.

 

3.6  Termination. The
employment relationship between You and Acacia created hereunder will terminate upon the occurrence of any one of the
following events:

 

3.7 
Death or Permanent Disability. Acacia may terminate this Agreement and any further
obligations to You if You die or, due to physical or mental disability, You are, for a period in excess of 90 consecutive days
or 120 days in any 180 day period, either (a) unable to reasonably and effectively carry out your duties with reasonable accommodations
by Acacia or (b) unable to reasonably and effectively carry out your duties because any reasonable accommodation which may be required
would cause Acacia undue hardship. In the event of a disagreement concerning your perceived disability, You will submit to such
examinations as are deemed appropriate by three practicing physicians specializing in the area of your disability, one selected
by You, one selected by Acacia, and one selected by both such physicians. The majority decision of such three physicians will be
final and binding on the parties. 

 

3.8  Termination
for Cause. Your employment may be terminated at any time with or without Cause. For purposes of this Agreement,
“Cause” shall mean: 

 

(a) 
Your willful refusal to substantially perform your duties hereunder, or willful breach any
of your material obligations under this Agreement;

 

(b) 
Your willful misconduct or gross negligence, which is likely to have the effect of demonstrably
injuring the reputation, business or business relationship of Acacia;

 

(c) 
 You are convicted of or plead guilty or nolo contendre to any criminal offense, or
felony; or

 

(d) 
 You embezzle or steal any of Acacia's funds or assets or commit any act of fraud with respect
to any aspect of Acacia's business; 

 

provided that Cause shall not apply to
any act or omission described above unless the Board provides written notice of the act or omission and, with respect to clauses
(a) or (b), the act or omission is cured within 10 days after receipt of such notice. Any act, or failure to act, based upon authority
given pursuant to a resolution duly adopted by the Board or upon the instructions of the Board or the Chief Executive Officer or
reasonably based upon the advice of counsel for the Company shall be conclusively presumed to be done, or omitted to be done, by
You in good faith and in the best interests of the Company and no act or failure to act on Your part shall be considered “willful,”
so long as you reasonably believed that such action, or failure to act, was in the best interests of the Company.

 

 

 

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3.9  Resignation
by You with or without Good Reason. You may resign at any time without Good Reason upon providing the Company with 30
days prior written notice. You may resign at any time for Good Reason. For purposes of this Agreement, “Good
Reason” shall mean, without Your prior written consent:

 

(a) A material reduction
in Your Salary or Target Bonus (provided, that so long as the Target Bonus is in the range set forth in Section 3.2, there shall
be no deemed “material reduction” in such Target Bonus even if the amount of the potential Target Bonus to be earned
by You in a given year is less than the amount of the potential Target Bonus to be earned by you in the prior year);

 

(b) A change in Your
title(s) or reporting relationship or a material reduction in your duties, responsibilities or authorities;

 

(c) A relocation of
Your principal place of business from Manhattan, NY; or

 

(d) A material breach
of this Agreement;

 

Your termination of employment will not
be for Good Reason unless (1) You notify the Company in writing of the existence of the condition that You believe constitutes
Good Reason within 60 days of the initial existence of such condition (which notice specifically identifies such condition), (2)
the Company fails to remedy such condition within 30 days after the date on which it receives such notice (the “Remedial
Period”), and (3) so long as the Company acknowledges in writing the existence of Good Reason by the end of the Remedial
Period, You actually terminate employment within 30 days following the expiration of the Remedial Period and before the Company
remedies such condition. If the Company does not acknowledge the existence of Good Reason by the end of the Remedial Period, You
shall only be required to resign for Good Reason within two years after the end of the Remedial Period, unless at any time during
such two year period the Company provides written notice to You that Good Reason exists in which case You shall have 30 days from
Your receipt of such notice to resign for Good Reason.

 

4.   
Compensation Upon Termination.

 

4.1 
 Termination for Any Reason. Upon termination of your employment under this Agreement
for any reason, the Company or one of its affiliates shall pay You: (i) unpaid salary earned through the date of termination; (ii)
for any vacation time earned but not used as of the date Your employment terminates in accordance with Company policies as then
in effect; (iii) reimbursement, in accordance with the Company’s and its affiliates policies and procedures, for business
expenses incurred by You but not yet paid to You as of the date Your employment terminates; (iv) except in the case of a termination
by the Company and its affiliates for Cause, Your annual bonus for any completed fiscal year to the extent not yet paid and earned;
and (v) all other payments, benefits or fringe benefits to which You are entitled under the terms of the applicable arrangements
and/or applicable law (all of the foregoing clauses (i)-(v) collectively, the “Accrued Obligations”). 

 

4.2 
 Other Than Cause/For Good Reason. Upon termination of your employment under this Agreement
by the Company and its affiliates other than for Cause, Death or Disability or by You for Good Reason, in addition to the Accrued
Obligations, subject to Your execution and non-revocation of a release in the form attached hereto as Exhibit A and Your compliance
with the restrictive covenants in Sections 5 through 8 below, You will be entitled to (i) a severance payment equal to the product
of (A) 1.5 and (B) Your Salary (provided that if such termination occurs within one (1) year following a Change in Control (as
defined on Exhibit CIC), such amount shall be equal to the product of (A) two and (B) sum of (1) Your Salary and (2) the Target
Bonus), which severance payment shall be paid in 18 monthly installments commencing on the 60th day following Your date
of termination, (ii) a payment in an amount equal to the product of (A) the Target Bonus and (B) a fraction, the numerator of which
is the number of days in the year in which the date of termination occurs through the date of termination (or if the termination
occurs in 2019 the number of days in the year from the Start Date until the date of termination) and the denominator of which is
365 (the “Pro Rata Bonus”), which payment shall be paid in 18 monthly installments commencing on the 60th
day following Your date of termination, and (iii) to the extent that You participate in Acacia’s health programs, the Company
shall pay You an amount in cash, on a monthly basis, equal to the employer portion of the premiums for Your health plan benefits
for You and Your eligible dependents for a period of 18 months commencing on Your date of termination (the “Health Benefits”).
In addition, upon a termination by the Company without Cause or a resignation by You for Good Reason, in each case if such termination
occurs within one (1) year following a Change in Control, with respect to the Initial Equity Grant, You will immediately be deemed
to have satisfied any time-based and performance-based vesting requirements (the “Equity Benefits”). 

 

 

 

 

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4.3 
 Death/Disability. Upon termination of Your employment under this Agreement by reason
of Your death or Disability, in addition to the Accrued Obligations, You (or Your estate or guardian, as applicable) shall be paid
or provided the Pro Rata Bonus and the Health Benefits. 

 

4.4 
Remedy. Should Acacia terminate your employment for Cause, and it is later determined
that Acacia did not have Cause for the termination, then Acacia’s decision to terminate You will be deemed to have been made
without Cause and Acacia will pay You the compensation as set forth in this Agreement, as your sole and exclusive remedy.

 

5.   
Confidentiality.

 

5.1 
 Confidential Information. Acacia and You recognize that You will acquire
certain confidential and proprietary information relating to Acacia's business and the business of Acacia's affiliates. Such confidential
and proprietary information is information that derives independent economic value, actual or potential, from not being generally
known to the public or to other persons who can obtain economic value from its disclosure or use, and is the subject of efforts
that are reasonable under the circumstances to maintain its secrecy (“Confidential Information"). Confidential Information
may include, without limitation, the following: business plans, projections, information (including, without limitation, privileged
information) relating to any litigation or other proceeding to which Acacia or any of its affiliates are parties to, planning and
strategies, marketing plans, materials, pricing, programs and related data, product information, services, budgets, acquisition
plans, the names or addresses of any employees, independent contractors or customers, licensing strategy, statistical data, financial
information or arrangements, manuals, forms, techniques, know-how, trade secrets, software, any method or procedure of Acacia's
business, whether developed by Acacia or developed, or contributed to, by You during the course of your employment, or made available
to You by Acacia or any of Acacia's affiliates in the course of your employment, or any market development, research or expansion
projects, business systems and procedures and other confidential business and proprietary information. Confidential Information
may be contained in written materials, verbal communications, the unwritten knowledge of employees, or any other tangible medium,
such as tape, computer, or other means of electronic storage of information.

 

5.2 
 Obligation of Confidentiality. You acknowledge and agree that (a) all of the Confidential
Information constitutes special, unique and valuable assets of Acacia and trade secrets, the disclosure of which would cause irreparable
harm and substantial loss to Acacia and/or its affiliates. In view of the foregoing, You agree that at no time will You, directly
or indirectly, and whether during or after your employment with Acacia, use, reveal, disclose or make known any Confidential Information
without specific written authorization from or written direction by Acacia. You further agree that, immediately upon termination
or expiration of your employment for any reason whatsoever, or at any time upon request by Acacia, You will return to Acacia all
Confidential Information. Notwithstanding the foregoing, any restriction on Your use, disclosure, or conveyance of Confidential
Information shall not apply to (i) any Confidential Information that enters the public domain through no fault of Yours or any
person affiliated with You; (ii) any Confidential Information that You are required to disclose pursuant to applicable law or legal
process, an order of a court of competent jurisdiction or a government agency having appropriate authority, solely to the extent
necessary to comply with such order; and (iii) any use or disclosure, during the course of Your service with Acacia of Confidential
Information made necessary by the proper conduct of the business of Acacia and consistent with the instructions of Acacia. Nothing
in any code, agreement, manual or in any other policies, procedures or agreements of Acacia or its affiliates shall prohibit or
restrict You or Your counsel from providing information in connection with: (a) any disclosure of information required by law or
legal process; (b) reporting possible violations of federal or state law or regulation to any governmental agency, commission or
entity or self-regulatory organization (collectively “Government Agencies”) (c) filing a charge or complaint with Government
Agencies; (d) making disclosures that are protected under the whistleblower provisions of federal or state law or regulation (collectively
the “Whistleblower Statutes”); or (e) from initiating communications directly with, responding to any inquiry from,
volunteering information to, testifying or otherwise participating in or assisting in any inquiry, investigation or proceeding
brought by Government Agencies in connection with (a) through (e).  You are not required to advise or seek permission from
Acacia or its affiliates before engaging in any activity set forth in (a) through (e).  Further, Acacia and its affiliates
do not in any manner limit Your right to receive an award from Government Agencies for information provided to Government Agencies
or pursuant to the Whistleblower Statutes. In no event shall You be prohibited from disclosing Confidential Information to Your
legal advisors or from providing information regarding Your compensation or the terms of this Agreement to any financial or tax
advisors.

 

 

 

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6.   
 Intellectual Property. You agree that any and all discoveries, concepts,
ideas, inventions, writings, plans, articles, devices, products, designs, treatments, structures, processes, methods, formulae,
techniques and drawings, and improvements or modifications related to the foregoing that are in any way related to intellectual
property owned or controlled by Acacia or its affiliates or subsidiaries, whether patentable, copyrightable or not, which are made,
developed, created, contributed to, reduced to practice, or conceived by You, whether solely or jointly with others, in connection
with your employment with Acacia (collectively, the “Intellectual Property”) will be and remain the exclusive property
of Acacia, and, to the extent applicable, a “work made for hire,” and Acacia will own all rights, title and interests
thereto, including, without limitation, all rights under copyright, patent, trademark, statutory, common law and/or otherwise.
By your execution of this Agreement, You hereby irrevocably and unconditionally assign to Acacia all right, title and interest
in any such Intellectual Property. You further agree to take all such steps and all further action as Acacia may reasonably request
to effectuate the foregoing, including, without limitation, the execution and delivery of such documents and applications as Acacia
may reasonably request to secure the rights to Intellectual Property worldwide by patent, copyright or otherwise to Acacia or its
successors and assigns. You further agree promptly and fully to disclose any Intellectual Property to the officers of Acacia and
to deliver to such officers all papers, drawings, models, data and other material (collectively, the “Material”) relating
to any Intellectual Property made, reduced to practice, developed, created or contributed to by You and, upon termination, or expiration
of your employment with Acacia, to turn over to Acacia all such Material. Any intellectual property which was developed by You
prior to the date of this agreement, or which is developed by You during or after the termination of this Agreement and is not
in any way related to any of Acacia's or any of its subsidiaries' or affiliates' intellectual property, will be owned by You.

 

7.   
 Other Activities, Non-Solicitation. During the term of this Agreement,
You will not engage in any activities that are competitive with Acacia, or any of its affiliates or subsidiaries, or that would
result in a conflict of interest. In the event of the termination of your employment for any reason, You, for a period of one year
will not: (a) solicit for employment and then employ any employee of Acacia or any of its affiliates or subsidiaries or any person
who is an independent contractor involved in any of its affiliates or subsidiaries; (b) make any public statement concerning Acacia,
or any of its affiliates or subsidiaries, or your employment, unless previously approved by Acacia, except as may be required by
law or as otherwise provided in Section 8 below; or (c) induce, attempt to induce or knowingly encourage any Customer of Acacia
or any of its affiliates or subsidiaries to divert any business or income from Acacia or any of its affiliates or subsidiaries
or to stop or alter the manner in which they are then doing business with Acacia or any of its affiliates or subsidiaries. In addition,
in the event of the termination of your employment for any reason, You, for a period of two years will not serve as a director,
officer, employee or consultant to any public company engaged in the business of acting as a patent assertion entity (“PAE”);
provided that (i) You may be employed by or provide services to an affiliated group that has a business unit that acts as a PAE,
which business unit comprises no more than fifteen percent (15%) of such affiliated group’s overall business as measured
by revenue, provided that You do not provide any direct services to the business unit (for the avoidance of doubt, it shall not
be a violation of this Agreement for You to render services to a different business unit or to serve the parent of such business
unit), and comply with Your obligations with respect to the Company’s Confidential Information and (ii) You may become employed
by or provide services to any private equity fund, hedge fund, or other similar investment vehicle that invests in or holds a position
in a public entity that acts as a PAE, provided that Your services to such investment vehicle or its managers or advisors do not
involve investment or management decisions with respect to any of such investment vehicle’s public portfolio companies engaged
as PAEs and You do not use any of the Company’s Confidential Information. The term “Customer” will mean any individual
or business firm that was or is a customer, client, licensee and/or licensor of, or one that was or is a party in an investor agreement
with, or whose business was actively solicited by, Acacia or any of its affiliates or subsidiaries at any time, regardless of whether
such customer was generated, in whole or in part, by your efforts.

 

 

 

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8.   
 Non-Disparagement. Because Acacia’s and its affiliates’ respective
businesses involve a significant amount of third party litigation, You and other employees of Acacia will, from time-to-time during
your employment under this Agreement, be in possession of privileged and/or sensitive information, which if used or disclosed in
a manner adverse to Acacia and/or its affiliates would have a material and adverse effect on Acacia and/or its affiliates. Accordingly,
during Your employment with Acacia or any of its subsidiaries and at all times thereafter, You agree not to (i) make any statements
outside of Acacia (whether directly or through any other person or entity, and whether orally or in writing) that disparage, denigrate
or malign Acacia or any of its affiliates or any of their respective businesses, activities, operations or the reputations of any
of their respective directors, officers, managers, employees, representatives, owners or equityholders, or (ii) voluntarily participate,
assist or testify in any legal proceeding against Acacia. This Non-Disparagement provision will not apply (1) if You are compelled
to testify in a legal proceeding, solely with respect to the specific information that You are compelled to include in such testimony,
(2) if in connection with You filing a charge with, participating in a proceeding before or otherwise communicating with the Equal
Employment Opportunity Commission, the National Labor Relations Board, the Occupational Safety and Health Administration, the Securities
and Exchange Commission or any other federal, state or local governmental agency or commission, (3) in connection with any arbitration
claim, or other proceeding brought by You, or in which You are a plaintiff, against Acacia or any of its affiliates or any of their
respective directors, officers, managers, employees, representatives, owners or equityholders, or (4) to the extent precluded by
applicable law.

 

9.   
Remedies. Each of the parties to this Agreement will be entitled to enforce its
rights under this Agreement specifically, to recover damages by reason of any breach of any provision of this Agreement and to
exercise all other rights existing in its favor. The parties agree and acknowledge that money damages may not be an adequate remedy
for any breach of the provisions of this Agreement and that any party may in its sole discretion apply to any court of law or equity
of competent jurisdiction for injunctive relief without the need for an undertaking in order to enforce or prevent any violations
of the provisions of this Agreement.

 

10. 
Assignment. This Agreement is personal to You and may not be assigned in any
way by You without the prior written consent of Acacia. Any such attempted assignment without Acacia's written consent will be
void.

 

11. 
Severability and Reformation. The parties intend all provisions of this Agreement
to be enforced to the fullest extent permitted by law. If, however, any provision of this Agreement is held to be illegal, invalid,
or unenforceable under present or future law, such provision will be fully severable, and this Agreement will be construed and
enforced as if such illegal, invalid, or unenforceable provision were never a part hereof and the remaining provisions will remain
in full force and effect. Moreover, any provision so affected will be limited only to the extent necessary to bring the Agreement
within the applicable requirements of law.

 

12. 
Governing Law and Venue. This Agreement is to be governed by and construed
in accordance with the laws of the State of New York applicable to contracts made and to be performed wholly within such State,
and without regard to the conflicts of laws principles thereof. 

 

 

 

 

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13. 
Arbitration. Except as otherwise set forth in Section 9 above, any controversy,
claim or dispute arising out of or in any way relating to this Agreement, the alleged breach thereof, and/or your employment with
Acacia or its termination including, without limitation, claims for breach of any express or implied contract, tort claims, claims
for violation of any federal, state or other governmental law, statute, ordinance, Executive Order or regulation, and any and all
claims for employment discrimination or harassment, will be determined by binding arbitration administered by the American Arbitration
Association under its National Rules for Resolution of Employment Disputes ("Rules") which are in effect at the time
of the arbitration. In reaching a decision, the arbitrator will have no authority to change, extend, modify or suspend any of the
terms of this Agreement. The arbitration will be commenced and heard in New York County, New York. The arbitrator will apply the
substantive law (and the law of remedies, if applicable) of New York or federal law, or both, as applicable to the claim(s) asserted.
The Arbitrator will issue a written decision explaining his/his award. Judgment on the award may be entered in any court of competent
jurisdiction, even if a party who received notice under the Rules fails to appear at the arbitration hearing(s). The parties may
seek, from a court of competent jurisdiction, provisional remedies or injunctive relief in support of their respective rights and
remedies hereunder without waiving any right to arbitration. However, the merits of any action that involves such provisional remedies
or injunctive relief, including, without limitation, the terms of any permanent injunction, will be determined by arbitration under
this paragraph. Notwithstanding the foregoing, claims for workers' compensation benefits, unemployment compensation benefits, or
claims based upon an employee benefit plan which provides by its own terms for arbitration are exempted from the provisions of
this Paragraph. In any arbitration hereunder, the parties will each pay for their costs and attorneys' fees, if any. However, if
either party prevails on a statutory claim which entitles the prevailing party to attorneys' fees, the arbitrator may award reasonable
attorneys' fees to the prevailing party in accordance with that statute. If any claim or class of claim is determined by applicable
law not to be subject to arbitration, this Agreement to arbitrate will remain in full force and effect with respect to all other
claims asserted between the parties. 

 

14. 
Entire Agreement, Amendment and Waiver. This Agreement contains the entire
understanding and agreement between the parties, and supersedes any other agreement between Acacia and You, whether oral or in
writing, with respect to the subject matter hereof. This Agreement may not be altered or amended, nor may any of its provisions
be waived, except by a writing signed by both parties hereto or, in the case of an asserted waiver, by the party against whom the
waiver is sought to be enforced. Waiver of any provision of this Agreement, or any breach thereof, will not be deemed to be a waiver
of any other provision or any subsequent alleged breach of this Agreement.

 

15. 
Survival and Counterparts. The provisions of Sections 4, 5, 6, 7, 8, 9, 10, 11,
12, 13, 14 and 15 of this Agreement will survive the termination of this Agreement. This Agreement may be executed in counterparts,
with the same effect as if both parties had signed the same document. All such counterparts will be deemed an original, will be
construed together and will constitute one and the same instrument

 

16. 
Stock Purchase Right. The Company hereby consents to Your purchase of up to 7.5 percent
of the Company’s common stock (subject to your compliance with the Company’s blackout policies and any other prohibition
on purchasing securities while in possession of material non-public information) and shall take such actions as may be necessary
to permit such purchases under the Company’s Tax Benefits Preservation Plan.

 

17. 
Clawback, Stock Ownership and Holding Period Requirements. Notwithstanding any other
provision in this Agreement to the contrary, You shall be subject to the written policies of the Company’s Board of Directors
applicable to Company executives, relating to recoupment or “clawback” of incentive compensation.

 

 

 

 

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18.   Section 280G
Cutback.

 

(a)
Anything in this Agreement to the contrary notwithstanding, in the event that the Accounting Firm shall determine that receipt
of all Payments would subject You to tax under Section 4999 of the Code, the Accounting Firm shall determine whether some
amount of Agreement Payments meets the definition of “Reduced Amount.”  If the Accounting Firm determines that
there is a Reduced Amount, then the aggregate Agreement Payments shall be reduced to such Reduced Amount.

 

(b)  
If the Accounting Firm determines that the aggregate Agreement Payments should be reduced to the Reduced Amount, the Company shall
promptly give You notice to that effect and a copy of the detailed calculation thereof, and You may then elect, in Your sole discretion,
which and how much of the Agreement Payments shall be eliminated or reduced (as long as after such election the Present Value of
the aggregate Agreement Payments equals the Reduced Amount).  All determinations made by the Accounting Firm under this Paragraph
shall be binding upon the Company and its affiliates.  In connection with making determinations under this Paragraph, the
Accounting Firm shall take into account the value of any reasonable compensation for services to be rendered by You before or after
the Change in Control, including any non-competition provisions that may apply to You and the Company and its affiliates shall
cooperate in the valuation of any such services, including any non-competition provisions.

 

(c) 
As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by
the Accounting Firm hereunder, it is possible that amounts will have been paid or distributed by the Company or its affiliates
to or for Your benefit pursuant to this Agreement which should not have been so paid or distributed (each, an “Overpayment”)
or that additional amounts which will have not been paid or distributed by the Company to or for Your benefit pursuant to this
Agreement could have been so paid or distributed (each, an “Underpayment”), in each case, consistent with the calculation
of the Reduced Amount hereunder.  In the event that the Accounting Firm, based upon the assertion of a deficiency by
the Internal Revenue Service against either the Company or You which the Accounting Firm believes has a high probability of success
determines that an Overpayment has been made, any such Overpayment paid or distributed by the Company to or for Your benefit shall
be repaid by You to the Company together with interest at the applicable federal rate provided for in Section 7872(f)(2) of
the Code; provided, however, that no such repayment shall be required if and to the extent such deemed repayment would
not either reduce the amount on which You are subject to tax under Section 1 and Section 4999 of the Code or generate
a refund of such taxes.  In the event that the Accounting Firm, based upon controlling precedent or substantial authority,
determines that an Underpayment has occurred, any such Underpayment shall be promptly paid by the Company to or for Your benefit
together with interest at the applicable federal rate provided for in Section 7872(f)(2) of the Code. All fees and expenses
of the Accounting Firm in implementing the provisions of this Paragraph shall be borne by the Company.

 

(d)  The following
terms shall have the following meanings for purposes of this Paragraph. (1)  A “Payment” shall mean any payment
or distribution in the nature of compensation (within the meaning of Section 280G(b)(2) of the Code) to or for your benefit,
whether paid or payable pursuant to this Agreement or otherwise; (2)  “Agreement Payment” shall mean a Payment
paid or payable pursuant to this Agreement (disregarding this Paragraph); (3)  “Net After-Tax Receipt” shall mean
the Present Value of a Payment net of all taxes imposed on you with respect thereto under Sections 1 and 4999 of the Code and under
applicable state and local laws, determined by applying the highest marginal rate under Section 1 of the Code and under state
and local laws which applied to your taxable income for the immediately preceding taxable year, or such other rate(s) as you
shall certify, in your sole discretion, as likely to apply to you in the relevant tax year(s); (4)  “Accounting Firm”
shall mean Golden Parachute Tax Solutions LLC or such other nationally recognized accounting firm selected by you; (5) 
“Parachute Value” of a Payment shall mean the present value as of the date of the change of control for purposes of
Section 280G of the Code of the portion of such Payment that constitutes a “parachute payment” under Section 280G(b)(2),
as determined by the Accounting Firm for purposes of determining whether and to what extent the Excise Tax will apply to such Payment;
and (6) “Reduced Amount” shall mean the amount of Agreement Payments that (x) has a Present Value that is less
than the Present Value of all Agreement Payments and (y) results in aggregate Net After-Tax Receipts for all Payments that
are greater than the Net After-Tax Receipts for all Payments that would result if the aggregate Present Value of Agreement Payments
were any other amount that is less than the Present Value of all Agreement Payments.

 

 

 

 

    	 	8	 

     

    

 

19.   Section 409A.
To the extent (i) any payments to which You become entitled under this agreement, or any agreement or plan referenced herein, in
connection with Your termination of employment with the Company and its affiliates, constitute deferred compensation subject to
Section 409A of the Internal Revenue Code (“Section 409A”) and (ii) You are deemed at the time of such termination
of employment to be a “specified” employee under Section 409A, then such payment or payments shall not be made or commence
until the earlier of (i) the expiration of the 6-month period measured from the date of your “separation from service”
(as such term is at the time defined in regulations under Section 409A) with the Company and its affiliates and (ii) the date of
Your death following such separation from service, provided, however, that such deferral shall be effected only to the extent required
to avoid adverse tax treatment to You, including (without limitation) the additional twenty-percent (20%) tax for which You would
otherwise be liable under Section 409A(a)(1)(B) in the absence of such deferral. Upon the expiration of the applicable deferral
period, any payments which would have otherwise been made during that period (whether in a single sum or in installments) in the
absence of this paragraph shall be paid to You or Your beneficiary in one lump sum (without interest). To the extent that any provision
of this Agreement is ambiguous as to its exemption or compliance with Section 409A, the provision will be read in such a manner
so that (i) all payments hereunder are exempt from Section 409A to the maximum permissible extent and, (ii) for any payments where
such construction is not tenable, so that those payments comply with Section 409A to the maximum permissible extent. Payments pursuant
to this Agreement (or referenced in this Agreement), and each installment thereof, are intended to constitute separate payments
for purposes of Section 1.409A-2(b)(2) of the regulations under Section 409A. All references to termination of employment or similar
terms shall be deemed to mean separation from service within the meaning of Section 409A. Notwithstanding anything to the contrary
herein, except to the extent any expense, reimbursement or in-kind benefit provided pursuant to this Agreement does not constitute
a “deferral of compensation” within the meaning of Section 409A: (x) the amount of expenses eligible for reimbursement
or in-kind benefits provided to You during any calendar year will not affect the amount of expenses eligible for reimbursement
or in-kind benefits provided to You in any other calendar year, (y) the Company or its affiliates will reimburse You for expenses
for which You are entitled to be reimbursed on or before the last day of the calendar year following the calendar year in which
the applicable expense is incurred or, if earlier, within 30 days after You have substantiated the expense, and (z) the right to
payment or reimbursement or in-kind benefits hereunder may not be liquidated or exchanged for any other benefit.

 

 

 

 

 

 

 

    	 	9	 

     

    

 

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

 

ACACIA
RESEARCH GROUP LLC

 

 

 

	By:	 /s/ Marc W. Booth	 

Name: Marc W. Booth

Its: CEO and President

 

 

 

ACACIA
RESEARCH CORPORATION

 

 

 

	By:	 /s/ Maureen O’Connell	 

Name: Maureen O’Connell

Its: Chairman

 

 

 

	/s/ Alfred Tobia	 
	Alfred Tobia	 

 

 

 

 

 

 

    	 	10	 

     

    

 

EXHIBIT RS

 

Initial Equity Grant

 

The restricted stock
units granted pursuant to the Initial Equity Grant shall vest in accordance with the following schedule: (i) 80,000 restricted
stock units shall vest on September 3, 2022 (the “Vesting Date”) if the Company achieves a total shareholder return
(“TSR”) compound annual growth rate (“CAGR”) of 8.0% during the performance period starting on September
3, 2019 and ending on the Vesting Date (the “Performance Period”), (ii) 140,000 additional restricted stock units shall
vest on the Vesting Date if the Company achieves a TSR CAGR of 12.0% during the Performance Period, and (iii) 230,000 additional
restricted stock units shall vest on the Vesting Date if the Company achieves a TSR CAGR of 16.0% during the Performance Period.

 

 

 

 

 

 

 

 

 

 

 

    	 	11EX-10.1

 EXHIBIT 10.1 

COOPERATION AGREEMENT 

This Cooperation Agreement, dated as of November 10, 2019 (this “Agreement”), is by and among Apogee Enterprises, Inc.
(the “Company”) and the persons and entities set forth on Schedule A hereto (collectively, and, for clarity and as applicable, each member thereof acting individually, the “Engaged Group”). 

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 below) of 1,689,332 shares of common stock, $0.33 1/3
par value per share, of the Company (the “Common Stock”), or approximately 6.4% of the Common Stock issued and outstanding on the date hereof; 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 of Directors of the Company (the “Board”) and certain other matters, as provided in this Agreement; 

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 (as defined
below), intending to be legally bound hereby, agree as follows: 
 Section 1. Board Appointments, Committees and Related
Agreements. 
 (a) Board Matters. 

(i) Following the execution of this Agreement, the Board and all applicable committees of the Board shall take all necessary actions to
nominate Christina M. Alvord, Frank G. Heard and Elizabeth M. Lilly (each individually, a “New Director” and together, the “New Directors”) for election to the Board as Class III directors at the 2019 annual meeting
of shareholders of the Company (the “2019 Annual Meeting”). The Company shall recommend, support and solicit proxies for the election of the New Directors at the 2019 Annual Meeting in the same manner as for the Company’s other
nominee(s) to the Board at the 2019 Annual Meeting. The Company shall nominate the following four directors for election to the Board at the 2019 Annual Meeting: each New Director and Mark A. Pompa. 

(ii) The Board shall not change the classification of any incumbent director of the Board prior to the 2019 Annual Meeting. 

(iii) For so long as the Engaged Group continuously beneficially owns in the aggregate at least the lesser of (A) 3.5% of the
Company’s then outstanding Voting Securities (as defined below) and (B) 929,410 shares of Common Stock (subject to adjustment 

 
for stock splits, reclassifications and combinations, the “Ownership Minimum”), the Company agrees that after the conclusion of the 2019 Annual Meeting and prior to the
Termination Date (as defined below), the size of the Board shall not exceed ten members unless at least two-thirds of the directors then serving on the Board, including two New Directors, approve such increase. 

(b) Replacements. From the date of this Agreement until the Termination Date, if any New Director is no longer able to serve as a
director for any reason unforeseen by the Engaged Group as of the date of this Agreement and so long as the Engaged Group continuously beneficially owns in the aggregate at least the Ownership Minimum, then the Engaged Group and the Company shall
work together to identify a mutually-acceptable replacement director who satisfies the Director Criteria (as defined below) to fill the resulting vacancy and any such person shall be subject to review and approval by the Nominating and Corporate
Governance Committee and the Board as well as the Engaged Group (any such replacement director, a “Replacement Director”). Upon a Replacement Director’s appointment to the Board, the Board and all applicable committees of the
Board shall consider whether such Replacement Director has the necessary qualifications to be appointed to any committee of the Board of which the replaced director was a member immediately prior to such director’s departure from the Board,
and, if the qualifications for such committee(s) are met, shall appoint such Replacement Director to such committee(s) or, if the qualifications for such committee(s) are not met, shall consider in good faith appointing the Replacement Director to
other committees of the Board. Any Replacement Director designated pursuant to this Section 1(b) replacing a New Director prior to the 2019 Annual Meeting shall stand for election at the 2019 Annual Meeting together with the
Company’s other nominees. Upon a Replacement Director’s appointment to the Board, such Replacement Director shall be deemed to be a New Director for all purposes under this Agreement. 

(c) Director Committee Appointments. Subject to the Company’s Corporate Governance Guidelines, the listing rules of the NASDAQ
Global Select Market and applicable law, the Board shall take all actions necessary to ensure that from and after, and contingent upon, the election of the New Directors to the Board, (i) Ms. Alvord is appointed to the Nominating and
Corporate Governance Committee of the Board, (ii) Mr. Heard is appointed to the Audit Committee of the Board and (iii) Ms. Lilly is appointed to the Compensation Committee of the Board, along with such other Board committees, if
any, to be determined by the Board in its sole discretion. 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 it would any other independent
director. 
 (d) Additional Agreements. 

(i) The Company intends to hold the 2019 Annual Meeting on or prior to January 15, 2020. The Company shall use commercially reasonable
efforts to hold the 2019 Annual Meeting as soon as reasonably practicable after the date on which the SEC (as defined below) has indicated to the Company that the Company may file its definitive proxy statement for the 2019 Annual Meeting. 

(ii) The Engaged Group agrees (A) to cause its Affiliates and Associates (each as defined below) to comply with the terms of this
Agreement and (B) that it shall be responsible for any breach of this Agreement by any such Affiliate or Associate. A 

  
 2 

 
breach of this Agreement by an Affiliate or Associate of any member of the Engaged Group, if such Affiliate or Associate is not a Party, shall be deemed to occur if such Affiliate or Associate
engages in conduct that would constitute a breach of this Agreement if such Affiliate or Associate were a Party to the same extent as the Engaged Group. 

(iii) Until the Termination Date, the Engaged Group agrees that it shall, and shall cause each of its Affiliates and Associates to, appear in
person or by proxy at each annual or special meeting of the shareholders of the Company, or any action by written consent of the Company’s shareholders in lieu thereof, and any adjournment, postponement, rescheduling or continuation thereof
(each, a “Shareholder Meeting”) and vote all Voting Securities beneficially owned, directly or indirectly, by the Engaged Group or any Affiliate thereof (or which the Engaged Group or such Affiliate or Associate has the right or
ability to vote) at such meeting (A) in favor of the nominees for director recommended by the Board, against the election of any nominee for director not approved, recommended and nominated by the Board for election at any such meeting, and
against any removal of any director of the Board; and (B) in accordance with the Board’s recommendation with respect to any other matter presented at such meeting; provided, however, that if Institutional Shareholder Services Inc.
(“ISS”) recommends otherwise with respect to any matter under clause (B) of this Section 1(d)(iii), the Engaged Group shall be permitted to vote in accordance with ISS’s 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 an Extraordinary Transaction. 

(iv) Until the Termination Date, upon written request from the Company, the Engaged Group shall promptly provide the Company with information
regarding the amount of the securities of the Company then beneficially owned by the Engaged Group. Such information provided to the Company shall be kept strictly confidential unless required to be disclosed pursuant to law, the rules of any stock
exchange or any Legal Requirement (as defined below). 
 Section 2. Standstill Agreement. Until the Termination Date, the
Engaged Group shall not, and shall cause each of its Affiliates and Associates not to, directly or indirectly, in any manner, alone or in concert with others: 

(a)    (i) acquire, cause to be acquired, or offer, seek or agree to acquire, whether by purchase, tender or exchange
offer, through the acquisition of control of another person, by joining or forming a partnership, limited partnership, syndicate or other group (including any group of persons that would be treated as a single “person” under
Section 13(d) of the Exchange Act (as defined below)), through swap or hedging transactions or otherwise (the taking of any such action, an “Acquisition”), Beneficial Ownership of any securities or assets of the Company (or any
direct or indirect rights or options to acquire such ownership, including voting rights decoupled from the underlying Voting Securities) such that after giving effect to any such Acquisition, the Engaged Group or any of its Affiliates and Associates
holds, directly or indirectly, in excess of 9.9% of the Voting Securities, (ii) acquire, cause to be acquired or offer, seek or agree to acquire, whether by purchase or otherwise, any interest in any indebtedness of the Company or
(iii) acquire, cause to be acquired or offer, seek or agree to acquire, ownership (including Beneficial Ownership) of any asset or business of the Company or any right or option to acquire any such asset or business from any person, in each
case other than securities of the Company; 

  
 3 

 (b)    (i) nominate, give notice of an intent to nominate, or
recommend for nomination a person for election to the Board or take any action in respect of the removal of any director (in each case other than pursuant to Section 1), (ii) seek or knowingly encourage any person to submit any
nomination in furtherance of a “contested solicitation” or take any other action in respect of the election or removal of any director (in each case other than pursuant to Section 1), (iii) submit, or seek or knowingly
encourage the submission of, any shareholder proposal (pursuant to Rule 14a-8 or otherwise) for consideration at, or bring any other business before, any Shareholder Meeting, (iv) request, or knowingly initiate, encourage or participate in any
request, to call a Shareholder Meeting, (v) publicly seek to amend any provision of the Amended and Restated Articles of Incorporation, the Amended and Restated By-Laws or other governing documents of the Company (each as may be amended from
time to time) or (vi) take any action similar to the foregoing with respect to any subsidiary of the Company; 
 (c) solicit any proxy,
consent or other authority to vote of shareholders or conduct any other referendum (binding or non-binding) (including any “withhold,” “vote no” or similar campaign) with respect to, or from the holders of, Voting Securities, or
become a “participant” (as such term is defined in Instruction 3 to Item 4 of Schedule 14A promulgated under the Exchange Act) in, or knowingly assist, advise, initiate, encourage or influence any person (other than the Company) in,
any “solicitation” (as such term is defined in Rule 14a-1 promulgated under the Exchange Act) of any proxy, consent or other authority to vote any Voting Securities (other than such assistance, advice, encouragement or influence that is
consistent with the Board’s recommendation in connection with such matter); 
 (d)    (i) grant any proxy, consent
or other authority to vote with respect to any matters (other than to the named proxies included in the Company’s proxy card for any Shareholder Meeting or as otherwise permitted by Section 1(d)(iii)) or (ii) deposit or 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 agreement or arrangement with respect to the voting of such securities (including a voting agreement or
pooling arrangement), other than (A) any such voting trust or arrangement solely for the purpose of delivering to the Company or its designee a proxy, consent or other authority to vote in connection with a solicitation made by or on behalf of
the Company or (B) customary brokerage accounts, margin accounts and prime brokerage accounts; 
 (e) knowingly encourage, advise or
influence any person or knowingly assist any person in so encouraging, advising or influencing any person, with respect to the giving or withholding of any proxy, consent or authority to vote any Voting Securities or in conducting any referendum
(binding or non-binding) (including any “withhold,” “vote no,” or similar campaign); 
 (f) without the prior written
approval of the Board, separately or in conjunction with any other person in which it is or proposes to be either a principal, partner or financing source or is acting or proposes to act as broker or agent for compensation, propose, suggest or
recommend publicly or in a manner that the Engaged Group is required under applicable law, rule or regulation to disclose publicly or participate in, effect or seek to effect, any Extraordinary Transaction or knowingly encourage any other third
party in any such activity; provided, however, that nothing in this Section 2 shall be interpreted to prohibit the Engaged Group from proposing, suggesting or recommending any Extraordinary Transaction privately to

  
 4 

 
the Company so long as any such action is not publicly disclosed by the Engaged Group and is made by the Engaged Group in a manner that would not reasonably be expected to require the public
disclosure thereof by the Company, the Engaged Group or any other person; 
 (g) form, join, encourage the formation of, or in any way
participate in any partnership, limited partnership, syndicate or group (within the meaning of Section 13(d)(3) of the Exchange Act) with respect to any Voting Securities (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 that nothing herein shall limit the ability of an Affiliate of the Engaged Group to join such 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); 

(h) make or publicly advance any request or proposal to amend, modify or waive any provision of this Agreement, or take any action challenging
the validity or enforceability of any provision of or obligation arising under this Agreement; provided that the Engaged Group may make confidential requests to the Board to amend, modify or waive any provision of this Agreement, which the
Board may accept or reject in its sole and absolute 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 would not reasonably be expected to require the public
disclosure thereof by the Company, the Engaged Group or any other person; 
 (i) make a request for a list of the Company’s
shareholders or for any books and records of the Company pursuant to Section 302A.461 of the Minnesota Business Corporation Act; or 

(j) enter into any discussion, negotiation, agreement, arrangement or understanding concerning any of the foregoing (other than this
Agreement) or encourage, assist, solicit, seek, or seek to cause any person to undertake any action inconsistent with this Section 2. 

Notwithstanding anything in this Agreement to the contrary, the foregoing provisions of this Section 2 shall not be deemed to 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 shareholders of the Company and others in a manner that does not otherwise violate this Section 2 or Section 5, or (iii) making any public disclosure necessary
to comply with any Legal Requirement. Furthermore, for the avoidance of doubt, nothing in this Agreement shall be deemed to restrict in any way the New Directors in the exercise of their fiduciary duties under applicable law as directors of the
Company. 
 Section 3. Representations and Warranties of All Parties. Each Party represents and warrants to the other Party that
(a) such Party has all requisite power and authority to execute and deliver this Agreement and to perform its obligations hereunder, (b) this Agreement has been duly and validly authorized, executed and delivered by it and is a valid and
binding obligation of such Party, enforceable against such Party in accordance with its terms (subject to applicable bankruptcy and similar laws relating to creditors’ rights and to general equity principles) and (c) this Agreement will
not result in a material violation of any (i) term or condition of any agreement to which such person is a party or by which such Party may otherwise be bound or (ii) law, rule, license, regulation, judgment, order or decree governing or
affecting such Party. 

  
 5 

 Section 4. Representations, Warranties and Covenants of the Engaged Group. The
Engaged Group represents, warrants and covenants to the Company that (a) as of the date of this Agreement, the Engaged Group collectively beneficially owns and is entitled to vote an aggregate of 1,689,332 shares of Common Stock,
(b) as of the date of this Agreement, the Engaged Group does not have a Synthetic Position (as defined below), (c) the Engaged Group has not provided or agreed to provide, and will not provide, any compensation in cash or otherwise to the
New Directors or any Replacement Director in connection with such person’s appointment to, or service as a director on, the Board, (d) no New Director is a former employee or current employee of the Engaged Group, and (e) the Engaged
Group will not become party to any agreement, arrangement or understanding (whether written or oral) with the New Directors or any Replacement Director with respect to such person’s service as a director on the Board, including any such
agreement, arrangement or understanding with respect to how such person should or would vote or act on any issue or question as a director. 

Section 5. Non-Disparagement. Subject to applicable law and Section 8, each of the Parties covenants and agrees that,
until the Termination Date, or until such earlier time as the other Party or any of its Representatives (as defined below) shall have breached this Section 5, neither it nor any of its Representatives shall make, or cause to be made by
press release or other public statement (including any statement on the record made to the press or media), any statement that in any way criticizes, disparages, calls into disrepute or otherwise defames or slanders the other Party or the business
of such Party, the other Party’s current or former directors, officers or employees, the other Party’s subsidiaries or the business of those subsidiaries in any manner or respect that would reasonably be expected to damage the business or
reputation of such persons. The foregoing shall not prevent the making of any factual statement in connection with any compelled testimony or production of information by Legal Requirement. 

Section 6. No Litigation. Each Party agrees that, until the Termination Date, it shall not institute, solicit, join or assist in
any lawsuit, claim or proceeding before any court or government agency (each, a “Legal Proceeding”) against the other Party, any Affiliate of the other Party or any of their respective current or former directors or officers, except
for (a) any Legal Proceeding initiated primarily to remedy a breach of or to enforce this Agreement and (b) counterclaims with respect to any proceeding initiated by, or on behalf of one Party or its Affiliates against the other Party or
its Affiliates; provided, however, that the foregoing shall not prevent any Party or any of its Representatives from responding to oral questions, interrogatories, requests for information or documents, subpoenas, civil investigative demands
or similar processes (each, a “Legal Requirement”) in connection with any Legal Proceeding if such Legal Proceeding has not been initiated by, on behalf of or at the suggestion of such Party; provided, further, that in the
event any Party or any of its Representatives receives such Legal Requirement, such Party shall give prompt written notice of such Legal Requirement to the other Party (except where such notice would be legally prohibited or not practicable). Each
Party represents and warrants that neither it nor any assignee has filed any lawsuit against the other Party. 

  
 6 

 Section 7. Confidentiality. The Engaged Group acknowledges and agrees that the
New Directors shall be required to preserve the confidentiality of the Company’s information, including any non-public information entrusted to or obtained by such New Director by reason of his or her position as a director of the Company. The
Engaged Group further acknowledges and agrees that the New Directors shall not be permitted to share any non-public information about the Company with the Engaged Group without the Board’s prior written consent, and the Engaged Group shall not
seek to obtain any such confidential information from the New Directors. 
 Section 8. Press Release; Communications. No later
than two Business Days following the execution of this Agreement, the Company shall issue a mutually agreeable press release (the “Press Release”) announcing certain terms of this Agreement. Neither the Company nor the Engaged Group
shall make or cause to be made, and the Company and the Engaged Group shall cause their respective Affiliates and Associates not to make or cause to be made, any public announcement or statement with respect to the subject matter of this Agreement
that is contrary to the statements made in the Press Release or the terms of this Agreement, except as required by law or the rules of any stock exchange or with the prior written consent of the other Party. The Engaged Group acknowledges and agrees
that the Company may file this Agreement and file or furnish the Press Release with the SEC as exhibits to a Current Report on Form 8-K and other filings with the SEC. The Engaged Group shall be given a reasonable opportunity to review and comment
on any Current Report on Form 8-K or other filing with the SEC made by the Company with respect to this Agreement, and the Company shall give reasonable consideration to any comments of the Engaged Group. The Company acknowledges and agrees that the
Engaged Group may file this Agreement as an exhibit to its Schedule 13D with the SEC. The Company shall be given a reasonable opportunity to review and comment on such Schedule 13D filing made by the Engaged Group with respect to this Agreement, and
the Engaged Group shall give reasonable consideration to any comments of the Company. 
 Section 9. 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, except that the Company shall reimburse the Engaged Group for its
reasonable documented expenses, including legal fees incurred in connection with its engagement with the Company (including but not limited to, the negotiation and execution of this Agreement and the prior agreements between the Engaged Group and
the Company), in an amount not to exceed $75,000. 
 Section 10. Termination. Unless otherwise mutually agreed in writing by
each Party, this Agreement shall terminate on August 1, 2020 (the “Termination Date”); provided, however, that the obligations of each Party pursuant to Section 5 or Section 6, as applicable,
shall terminate immediately in the event that the other Party materially breaches its obligations under such specific Section. Notwithstanding the foregoing, the provisions of Section 9 through Section 21 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. 

  
 7 

 Section 11. Certain Defined Terms. For purposes of this Agreement: 

(a) “Affiliate” has the meaning set forth in Rule 12b-2 promulgated 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; provided, however, that this term shall refer only to Affiliates controlled by the Company or the members of
the Engaged Group, as applicable; provided, further, that, for purposes of this Agreement, the members of the Engaged Group shall not be Affiliates of the Company and the Company shall not be an Affiliate of the members of the Engaged Group.

 (b) “Associate” has the meaning set forth in Rule 12b-2 promulgated under the Exchange Act, and shall include all
persons or entities that at any time during the term of this Agreement become Associate of any person or entity referred to in this Agreement; provided, however, that this term shall refer only to Associates controlled by the Company or the
members of the Engaged Group, as applicable; provided, further, that, for purposes of this Agreement, the members of the Engaged Group shall not be Associates of the Company and the Company shall not be an Associate of the members of the
Engaged Group. 
 (c) “Beneficial Ownership” means having the right or ability to vote, cause to be voted or control or
direct the voting of any Voting Securities (in each case whether directly or indirectly, including pursuant to any agreement, arrangement or understanding, whether or not in writing); provided that a person shall be deemed to have
“Beneficial Ownership” of any Voting Securities that such person has a right, option or obligation to own, acquire or control or direct the voting of upon conversion, exercise, expiration, settlement or similar event
(“Exercise”) under or pursuant to (i) any Derivative (as defined below) (whether such Derivative is subject to Exercise immediately or only after the passage of time or upon the satisfaction of one or more conditions) and
(ii) any Synthetic Position that is required or permitted to be settled, in whole or in part, in Voting Securities. A person shall be deemed to be the “Beneficial Owner” of, or to “beneficially own,” any
securities that such person has Beneficial Ownership of. 
 (d) “Business Day” means any day that is not (i) a
Saturday, (ii) a Sunday or (iii) other day on which commercial banks in the State of New York are authorized or required to be closed by applicable law. 

(e) “Director Criteria” means that a person (i) qualifies as “independent” pursuant to SEC rules and
regulations, applicable stock exchange listing standards and applicable corporate governance policies, (ii) qualifies to serve as a director under the Minnesota Business Corporation Act, (iii) is not an Affiliate, Associate, employee or
principal of the Engaged Group or any of its Affiliates or Associates and (iv) has the relevant experience to be a director of the Company. 

(f) “Exchange Act” means the Securities Exchange Act of 1934, as amended (together with the rules and regulations promulgated
thereunder). 
 (g) “Extraordinary Transaction” means any tender offer, exchange offer, merger, consolidation, acquisition,
business combination, sale, recapitalization, restructuring, or other transaction with a person that, in each case, that results in a change in control of the Company or the sale of substantially all of its assets. 

  
 8 

 (h) “Party” means the Company and the Engaged Group, individually, and
“Parties” means the Company and the Engaged Group, collectively. For the avoidance of doubt, any reference to the “other Party” with respect to the Company means the Engaged Group, collectively, and any reference to the
“other Party” with respect to any member of the Engaged Group means the Company. 
 (i) “person” has the meaning
ascribed to such terms under the Exchange Act. 
 (j) “Representatives” means a person’s Affiliates and Associates and
its and their respective directors, officers, employees, partners, members, managers, consultants, legal or other advisors, agents and other representatives acting in a capacity on behalf of, in concert with or at the direction of, such person or
its Affiliates and Associates. 
 (k) “SEC” means the U.S. Securities and Exchange Commission. 

(l) “Synthetic Position” means any option, warrant, convertible security, stock appreciation right or other security,
contract right or derivative position or similar right (including any “swap” transaction with respect to any security, other than a broad based market basket or index) (each of the foregoing, a “Derivative”), whether or
not presently exercisable, that has an exercise or conversion privilege or a settlement payment or mechanism at a price related to the value of Voting Securities or a value determined in whole or in part with reference to, or derived in whole or in
part from, the value of Voting Securities and that increases in value as the market price or value of Voting Securities increases or that provides an opportunity, directly or indirectly, to profit or share in any profit derived from any increase in
the value of Voting Securities, in each case regardless of whether (i) it conveys any voting rights in such Voting Securities to any person, (ii) it is required to be or capable of being settled, in whole or in part, in Voting Securities
or (iii) any person (including the holder of such Synthetic Position) may have entered into other transactions that hedge its economic effect. 

(m) “Voting Securities” means the Common Stock and any other securities of the Company entitled to vote in the election of
directors. 
 Section 12. Mandatory Injunctive Relief; Fees. 

(a) Each Party acknowledges and agrees that any breach of any provision of this Agreement shall cause the other Party irreparable harm which
would not be adequately compensable by money damages. Accordingly, in the event of a breach or threatened breach by a Party of any provision of this Agreement, the other Party shall be entitled to an injunction or other preliminary or equitable
relief, without having to prove irreparable harm or actual damages or post a bond or other security. The foregoing right shall be in addition to such other rights or remedies that may be available to the non-breaching Party for such breach or
threatened breach, including the recovery of money damages. 
 (b) If a Party institutes any legal suit, action or proceeding against the
other Party to enforce this Agreement (or obtain any other remedy regarding any breach of this Agreement) or arising out of or relating to this Agreement, including contract, equity, tort, fraud and statutory claims, the prevailing Party in the
suit, action or proceeding is entitled to receive, and the non-prevailing Party shall pay, in addition to all other remedies to which the prevailing 

  
 9 

 
Party may be entitled, the costs and expenses incurred by the prevailing Party in conducting the suit, action or proceeding, including actual attorneys’ fees and expenses,
even if not recoverable by law. 
 Section 13. 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. Each Party agrees to use its 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 unenforceable by a court of
competent jurisdiction. 
 Section 14. 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 shall be deemed to have been delivered at the earliest of (a) upon receipt, when delivered personally, (b) upon confirmation of receipt, when sent by e-mail
(provided that such confirmation is not automatically generated) and (c) one 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:  

Apogee Enterprises, Inc. 
 4400
West 78th Street, Suite 520 
 Minneapolis, Minnesota 55435 

Attention:       Patricia A. Beithon 

E-mail:           pbeithon@apog.com 

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

Sidley Austin LLP 
 787 Seventh
Avenue, 23rd Floor 
 New York, New York 10019 

Attention:       Kai H. Liekefett 

                       Scott
R. Williams 
 E-mail:           kliekefett@sidley.com 

                       
swilliams@sidley.com 

  
 10 

 If to the Engaged Group:  

Engaged Capital, LLC 
 610 Newport
Center Drive, Suite 250 
 Newport Beach, California 92660 

Attention:       Glenn W. Welling 

E-mail:           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 
 E-mail:           swolosky@olshanlaw.com 

                       
rnebel@olshanlaw.com 
 Section 15. Governing Law; Jurisdiction; Jury Waiver. This Agreement and all actions, proceedings or
counterclaims (whether based on contract, tort or otherwise) arising out of or relating to this Agreement or any action of the Company or the Engaged Group in the negotiation, administration, performance or enforcement hereof shall be governed by
and construed and enforced in accordance with the laws of the State of Minnesota without giving effect to any choice or conflict of laws provision or rule (whether of the State of Minnesota or any other jurisdiction) that would cause the application
of the laws of any jurisdiction other than the State of Minnesota. Each Party irrevocably agrees that any legal action or proceeding with respect to this Agreement and any rights and obligations arising hereunder, or for recognition and enforcement
of any judgment in respect of this Agreement and any rights and obligations arising hereunder brought by the other Party or its successors or assigns, shall be brought and determined exclusively in the State and Federal courts in Hennepin County,
Minnesota (the “Chosen Courts”). Each Party 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 Chosen
Courts and agrees that it shall not bring any action relating to this Agreement in any court other than the Chosen Courts. Each Party 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 Chosen Courts for any reason, (b) any claim that it or its property is exempt or immune from jurisdiction of any Chosen Court or from any legal process commenced in
the Chosen 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 any Chosen 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 the Chosen Courts. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT. 

  
 11 

 Section 16. Counterparts; Electronic Transmission. This Agreement may be
executed in two or more counterparts, which together shall constitute a single agreement. Any signature to this Agreement transmitted by facsimile transmission, by electronic mail in “portable document format” (“.pdf”) form or by
any other electronic means intended to preserve the original graphic and pictorial appearance of a document, shall have the same effect as physical delivery of the paper document bearing the original signature. 

Section 17. No Waiver. Any waiver by any Party of a breach of any provision of this Agreement shall not operate as or be construed
to be a waiver of any other breach of such provision or of any breach of any other provision of this Agreement. The failure of a Party to insist upon strict adherence to any term of this Agreement on one or more occasions shall not be considered a
waiver of, or deprive that Party of the right thereafter to insist upon strict adherence to, that term or any other term of this Agreement. 

Section 18. Entire Agreement; Amendments. This Agreement contains the entire understanding of the Parties with respect to the
subject matter hereof and supersedes all prior agreements between the Parties. This Agreement may only be amended pursuant to a written agreement executed by each Party. 

Section 19. Successors and Assigns. This Agreement may not be transferred or assigned by any Party without the prior written
consent of the other Party. Any purported assignment without such consent is null and void. Subject to the foregoing, this Agreement shall be binding upon, inure to the benefit of, and be enforceable by and against the permitted successors and
assigns of each Party. 
 Section 20. No Third Party Beneficiaries. This Agreement is solely for the benefit of the Parties and
is not enforceable by any other person. 
 Section 21. Interpretation and Construction. Each Party acknowledges that it has been
represented by independent counsel of its choice throughout all negotiations that have preceded the execution of this Agreement, and that it has executed the same with the advice of said independent counsel. Each Party and its counsel cooperated and
participated in the drafting and preparation of this Agreement and the documents referred to herein, and any and all drafts relating thereto exchanged among the Parties shall be deemed the work product of all of the Parties and may not be construed
against any Party by reason of its drafting or preparation. Accordingly, any rule of law or any legal decision that would require interpretation of any ambiguities in this Agreement against any Party that drafted or prepared it is of no application
and is hereby expressly waived by each Party, and any controversy over any interpretation of this Agreement shall be decided without regards to events of drafting or preparation. 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. In this Agreement, (a) the word “including” (in its various forms) means “including, without limitation,” (b) the words
“hereunder,” “hereof,” “hereto” and words of similar import are references to this Agreement as a whole and not to any particular provision of this Agreement and (c) the word “or” is not exclusive. 

[Signature Pages Follow] 

  
 12 

 IN WITNESS WHEREOF, each Party has executed this Agreement or caused the same to be executed
by its duly authorized representative as of the date first above written. 
  

			
	APOGEE ENTERPRISES, INC.
		
	By:	 	 /s/ Patricia A. Beithon

	Name:	 	Patricia A. Beithon
	Title:	 	General Counsel and Secretary

  
 [Signature Page to
Cooperation Agreement] 

 IN WITNESS WHEREOF, each Party has executed this Agreement or caused the same to be executed
by its duly authorized representative as of the date first above written. 
  

			
	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 Co-Invest VIII, 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

  
 [Signature Page to
Cooperation Agreement] 

 
			
	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

  
 [Signature Page to
Cooperation Agreement] 

 SCHEDULE A 

Engaged Capital, LLC 
 Engaged Capital Co-Invest VIII, LP 

Engaged Capital Flagship Master Fund, LP 
 Engaged Capital
Flagship Fund, LP 
 Engaged Capital Flagship Fund, Ltd. 

Engaged Capital Holdings, LLC 
 Glenn W. Welling

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