On February 16, 2017, AIP Operation LLC, a Delaware limited liability company (“AIP”), and an indirect subsidiary of Acacia Research Corporation, a Delaware corporation (“Acacia”), adopted a Profits Interest Plan (the “Plan”) that provides for the grant of equity interests in AIP to executive officers of Acacia as compensation for services rendered for or on behalf of AIP. Each profits interest unit granted to the Plan is intended to qualify as a “profits interest” for U.S. federal income tax purposes and will only have value to the extent the equity value of AIP increases beyond the value at issuance. The equity interests are represented by units (the “Units”) reserved for the issuance of awards under the Plan. The Units entitle the holders to share in or be allocated certain AIP profits and losses and to receive or share in AIP distributions to the AIP Limited Liability Company Operating Agreement entered into as of February 16, 2017 (the “LLC Agreement”). In connection with the adoption of the Plan, a form of Profits Interest Agreement was approved to which Units may be granted from time to time. Units vest upon AIP’s achievement of certain performance milestones, subject to the continued service of the recipient, and are subject to the terms and conditions of the Plan, the Profits Interest Agreement and the LLC Agreement.

Acacia owns substantially all of the equity in AIP and at all times will control AIP. Although AIP currently holds no material assets, Acacia from time to time may contribute to AIP certain assets or securities related to portfolio companies in which Acacia holds an interest. It is intended that Unit grants will provide strong incentives for recipients to support and drive success of the portfolio companies which in turn would represent a significant value creation opportunity for Acacia shareholders. Units will be awarded as one-time, discretionary grants to recipients. Recipients only can realize value from the Units if Acacia also realizes value from its investment in the portfolio entity after the award is made. The Units will constitute non-voting profits interests only. If a Unit holder leaves Acacia, he or she only will be eligible to realize value from the vested portion of the grant. Acacia believes that the Plan provides a highly-focused compensation tool directly aligned with the goal of creating Acacia shareholder value.

The foregoing descriptions of the Plan and the form of Profits Interest Agreement are qualified entirely by reference to the full text of the Profits Interest Agreement, a copy of which will be filed as an exhibit to Acacia’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2017.

About ACACIA RESEARCH CORPORATION (NASDAQ:ACTG)

Acacia Research Corporation, through its subsidiaries, is engaged in patent investment, prosecution, licensing and enforcement activities. The Company’s subsidiaries partner with inventors and patent owners for patented inventions. The Company operates in patent licensing and enforcement business segment. The Company’s subsidiaries generate revenues from the granting of intellectual property rights for the use of patented technologies that its subsidiaries control or own. The Company’s subsidiaries assist patent owners with the prosecution and development of their patent portfolios, the protection of their patented inventions from unauthorized use, the generation of licensing revenue from users of their patented technologies and with the enforcement against unauthorized users of their patented technologies through the filing of patent infringement litigation. It is engaged in licensing and enforcing patented technologies. Its subsidiaries include Adaptix, Inc. and Body Science, LLC.

ACACIA RESEARCH CORPORATION (NASDAQ:ACTG) Recent Trading Information

ACACIA RESEARCH CORPORATION (NASDAQ:ACTG) closed its last trading session down -0.08 at 5.72 with 178,919 shares trading hands.