Exhibit 10.1

 

SEPARATION AGREEMENT
AND
GENERAL RELEASE OF CLAIMS

 

This Separation Agreement and General Release of Claims (hereinafter
“Agreement”) is entered into by and between Charlie Smith (hereinafter
“Employee”) on the one hand and Purple Innovation, Inc. and its subsidiaries,
predecessors, and affiliates (hereinafter the “Company”) on the other hand.
Employee and the Company will collectively be referred to as the “Parties.”

 

RECITALS

 

A. Purple Innovation, Inc. is a Delaware company doing business in the State of
Utah.

 

B. Employee’s employment with the Company as Chief Operating Officer (the “COO”)
will terminate on July 3, 2018 (the “Separation Date’) pursuant to Employee’s
resignation.

 

C. In exchange for separation pay to which Employee would not otherwise be
entitled and other promises by the Company, Employee desires to settle and
compromise any and all possible claims and disputes he has against the Company
arising out of their relationship to date, and to provide for a General Release
of any and all such claims.

 

AGREEMENT

 

1. Resignation. Employee hereby agrees to resign from his position as COO of the
Company, effective the close of business on the Separation Date. Except as
provided in this Agreement, all privileges of employment end as of the
Separation Date.

 

2. Separation Pay/Consideration. If Employee signs this Agreement within
twenty-one (21) days of receipt and does not revoke it as set forth in Section
8, then in exchange for the promises contained in this Agreement, the Company
agrees to pay Employee a separation amount equivalent to three (3) months of his
current base salary, less applicable federal and state payroll tax deductions.
The payment will be made over three (3) months, with the first payment to be
made no later than seven (7) business days after the Effective Date of this
Agreement, as defined in Section 7, and will be subject to applicable tax
withholdings provided Employee does not revoke this Agreement and provided he
complies with his obligations under this Agreement.

 

3. Acknowledgement. Employee acknowledges that, prior to Employee’s entry into
this Agreement, Employee received all wages and other compensation due Employee
as a result of his employment with Company. Employee acknowledges that but for
his entry into this Agreement, he would not be entitled to the benefit of the
payments set forth in Section 2.

 

 

 

 

4. Release of All Claims. In consideration of the promises and payment described
in Section 2, which Employee would otherwise not be entitled to except for
signing this Agreement, Employee does hereby unconditionally, irrevocably and
absolutely release and discharge the Company and any related holding, parent,
sister or subsidiary corporations or entities and all of their respective
owners, directors, officers, employees, agents, volunteers, attorneys, insurers,
divisions, successors and assigns (“Releasees”) from any and all loss,
liability, claims, demands, causes of action or suits of any type, whether in
law and/or in equity, whether known or unknown, related directly or indirectly,
or in any way connected with any transaction, affairs or occurrences between
them to date, including but not limited to Employee’s employment at the Company,
the termination of said employment, and any other conduct by the Company
concerning Employee to date. This Agreement specifically applies, without
limitation, to any and all contract or tort claims, claims for wrongful
termination and/or violation of public policy, wage claims, and claims arising
under Title VII of the Civil Rights Act of 1991, the Americans with Disabilities
Act, the Age Discrimination in Employment Act (“ADEA”), the Equal Pay Act, the
Fair Labor Standards Act, the Family and Medical Leave Act, the Utah
Antidiscrimination Act, and any and all federal, state or local statutes,
regulations or ordinances, including without limitation those governing the
employment relationship and/or discrimination in employment.

 

This Agreement does not prohibit Employee from reporting possible violations of
federal law or regulation to any governmental agency or entity, including but
not limited to the Department of Justice, the Securities and Exchange Commission
(“SEC”), the Congress, and any agency Inspector General, or making other
disclosures that are protected under the whistleblower provisions of federal law
or regulation. Nothing in this Agreement requires Employee to seek prior
authorization from the Company to make any such reports or disclosures and
Employee does not need and is not required to notify the Company that he has
made any such reports or disclosures. This Agreement is not intended to and does
not restrict Employee from seeking or obtaining an SEC whistleblower award.

 

5. No Claims Filed/Waiver of Right to Sue. Employee represents that Employee has
not filed any claim, complaint, charge or lawsuit against Company or any other
Releasee with any governmental agency or any state or federal court. Employee
agrees that neither Employee nor any person, organization or any other entity
acting on Employee’s behalf will file, charge, claim, sue, participate in, join
or cause or permit to be filed, charged or claimed, any action, claim, charge,
grievance, or demand for damages or other relief (including injunctive,
declaratory, monetary or other) against the Releasees with respect to the Claims
which are the subject of this Agreement. Notwithstanding the foregoing, nothing
in this Agreement prohibits Employee from filing a charge with the Equal
Opportunity Employment Commission (“EEOC”) or participating in any investigation
or proceeding conducted by the EEOC. Nothing in this Agreement shall be deemed
to preclude Employee from challenging the knowing and voluntary nature of his
waiver of ADEA claims, or from challenging any breach of this Agreement.

 

6. Waiver of Damages. Employee hereby waives any right to recover damages,
costs, attorneys’ fees, and any other relief in any charge, proceeding or action
brought against the Releasees by Employee or by any other party on Employee’s
behalf, including without limitation the Equal Employment Opportunity
Commission, or other administrative agency, asserting any claims released by
Employee herein. Notwithstanding the foregoing, Employee does not waive rights,
if any, Employee may have to unemployment insurance benefits or workers’
compensation benefits.

 

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7. Older Workers’ Benefit Protection Act/ADEA Claims.

 

a. This section of the Agreement addresses Employee’s release of claims arising
under the ADEA, the federal law involving discrimination on the basis of age in
employment (age 40 and above). This section is provided, in compliance with
federal law, including but not limited to the ADEA and the Older Workers’
Benefit Protection Act of 1990, to ensure that Employee clearly understands his
rights so that any release of age discrimination claims under federal law (the
ADEA) is knowing and voluntary on the part of Employee.

 

b. Employee represents, acknowledges and agrees that the Company has advised
him, in writing through this subparagraph, to discuss this Agreement with an
attorney, and to the extent, if any, that Employee has desired, Employee has
done so; that the Company has given Employee twenty-one (21) days from receipt
of this Agreement to review and consider this Agreement before signing it, and
Employee understands that he may use as much of this twenty-one (21) day period
as he wishes prior to signing; that no promise, representation, warranty or
agreements not contained herein have been made by or with anyone to cause him to
sign this Agreement; that he has read this Agreement in its entirety, and fully
understands and is aware of its meaning, intent, content and legal effect; and
that he is executing this release voluntarily and free of any duress or
coercion.

 

c. The Parties acknowledge that for a period of seven (7) days following the
execution of this Agreement, Employee may revoke the ADEA release portion of the
Agreement. If revocation occurs, the Agreement shall not become effective or
enforceable. If revocation does not occur, the Agreement shall become effective
and enforceable upon the eighth (8th) day after it has been signed by Employee
(the “Effective Date”).

 

d. This Agreement and its release of ADEA claims do not waive rights or claims
under ADEA that may arise after the date the Agreement is executed.

 

e. If Employee exercises his right to revoke the ADEA release portion of the
Agreement, the Company may, at its option, either nullify this Agreement in its
entirety, or keep it in effect in all respects other than as to that portion of
his release of claims that Employee has revoked (except that Employee’s
employment will end on the Separation Date). Employee agrees and understands
that if the Company chooses to nullify this Agreement in its entirety, the
Company will have no further obligations under this Agreement.

 

8. Benefits.  Regardless of whether Employee signs this Agreement, Employee will
be covered under his current medical, dental and vision coverage until (11:59
p.m. on the last day of the month following the Separation Date) the end of July
2018.  All other employee benefits will cease immediately.  If Employee is
enrolled in the Flexible Spending Account(s), and unless Employee is qualified
for and elects continuing coverage under COBRA, he will have 90 days after his
termination date to claim qualified reimbursements, and his ability to use his
annual Flex election will end at midnight of his termination date.  If Employee
is eligible for continuing medical, dental, vision and flexible health FSA,
coverage under COBRA, the Company will provide him with notice of such rights,
and Employee may elect such continuing coverage, at his expense, in accordance
with the requirements stated in the notice and under applicable law. 

 

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9. Company Property. Regardless of whether Employee signs this Agreement, all
Company property (including property prepared or obtained by Employee or the
Company in the course of or incident to Employee’s employment) including, but
not limited to, laptops, Company credit cards, access cards, documents and
records, badges, tangible proprietary information, books, reports, contracts,
lists, computer disks (or other computer-generated or electronic files or data),
and all copies thereof, must be turned in to Casey McGarvey within one (1)
calendar day from the Separation Date.

 

10. Confidentiality of Agreement. Employee agrees that all matters relative to
this Agreement shall remain confidential. Employee agrees that Employee shall
not disclose any information concerning this Agreement to any person who is not
a party hereto, other than Employee’s attorneys, tax advisors, or spouse. The
Parties acknowledge that Employee may disclose this Agreement and its terms
pursuant to court order, agency directive, or in accordance with law. Employee
also agrees to immediately notify the Company of any requests or demands to
disclose any information concerning this Agreement before any such disclosure is
made pursuant to court order, agency directive, or in accordance with law.
Employee agrees to advise all persons to whom he discloses this Agreement or its
terms, of his obligation of confidentiality, and, with respect to Employee’s
attorneys, tax advisors, and spouse, to extract from them a promise to be bound
by this section.

 

11. Non-Disparagement. As a material condition of this Agreement, Employee
agrees not to disparage in any way, orally or in writing, any of the Releasees
to any person or entity.

 

12. Cooperation. Prior to the Separation Date and thereafter, upon reasonable
request, Employee agrees to give reasonable assistance and cooperation willingly
in any matter relating to his expertise or experience as an employee or officer
of the Company, as the Company may reasonably request, including but not limited
to one or both of (1) providing information concerning, or assistance with,
transitioning of Employee’s duties, investigations, claims, litigations, matters
or projects in which Employee was involved or as to which Employee potentially
has knowledge by virtue of his employment with the Company or otherwise related
to the Company’s business prior to the Separation Date and (2) Employee’s
attendance and truthful testimony where deemed appropriate by the Company, with
respect to any investigation or the Company’s defense or prosecution of any
existing or future claims or litigations relating to matters in which Employee
was involved or as to which Employee potentially has knowledge by virtue of his
employment with the Company or otherwise related to the Company’s business prior
to the Separation Date. Employee agrees to comply with any and all litigation
holds provided to him by the Company and to produce all documents related to
such litigation holds as requested by the Company. To the extent permitted by
law, the Company will reimburse Employee’s reasonable expenses incurred in
connection with any travel that may be required to fulfill his obligation under
this paragraph.

 

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13. Entire Agreement. The Parties further declare and represent that no promise,
inducement or agreement not herein expressed has been made to them, and that
this Agreement contains the full and entire agreement between and among the
Parties concerning the subject matter herein, and that the terms of this
Agreement are contractual and not a mere recital. Notwithstanding the foregoing,
the Parties acknowledge and agree that the Proprietary Information, Invention
Assignment, and Non-Competition Agreement signed by Employee, a copy of which is
acknowledged by Employee to have been received with this Agreement, will remain
in full force and effect, to the fullest extent allowed by law, following the
execution of this Agreement. Without limiting the nature of those agreements,
Employee acknowledges that the Company owns all of Employee’s ideas, inventions
and other intangible property, including but not limited to photographs and
writings of Employee, in the Company’s possession or control or created by
Employee for the Company or while employed by the Company, and the Company may
fully use the same without any limitation or obligation to Employee.

 

14. Knowing Agreement. Employee has read the foregoing Agreement, knows its
contents and fully understands it. Employee further acknowledges that he has
been given the opportunity to consult with his own independent legal counsel
with respect to the matters referenced in this Agreement. Employee acknowledges
that he has fully discussed this Agreement with his attorney or has voluntarily
chosen to sign this Agreement without consulting an attorney, fully
understanding the consequences of this Agreement.

 

15. Applicable Law and Venue. The validity, interpretation and performance of
this Agreement shall be construed and interpreted according to the substantive
laws of the State of Utah. Any cause of action arising under this Agreement
shall be brought in the courts located in Salt Lake County, Utah and both
parties agree to submit to the jurisdiction of those courts.

 

16. Attorneys’ Fees. The Parties also expressly agree that, should any action or
proceeding be commenced for breach of this Agreement, the prevailing party shall
be awarded reasonable attorneys’ fees on such proceedings. The Parties further
agree that, in the event Employee commences any sort of legal proceeding or
action in any court or before any tribunal alleging a claim or cause of action
that is released, waived, or barred under the provisions of Sections 3, 4, 5 or
6 of this Agreement, the Company shall be awarded its attorneys’ fees and costs
in defending against such action or proceeding upon dismissal or judgment of the
barred claim or cause of action.

 

17. Complete Defense. This Agreement may be pleaded as a full and complete
defense against any action, suit or proceeding which may be prosecuted,
instituted or attempted by either party in breach thereof.

 

18. Severability. If any provision of this Agreement, or part thereof, is held
invalid, void or voidable as against public policy or otherwise, the invalidity
shall not affect other provisions, or parts thereof, which may be given effect
without the invalid provision or part. To this extent, the provisions, and parts
thereof, of this Agreement are declared to be severable.

 

19. No Admission of Liability. It is understood that this Agreement is not an
admission of any liability by any person, firm, association or corporation but
is in compromise of a disputed claim.

 

20. Authority to Sign. Each individual signing this Agreement directly and
expressly warrants that she or he has been given and has received and accepted
authority to sign and execute the documents on behalf of the party for whom it
is indicated she or he has signed, and further has been expressly given and
received and accepted authority to enter into a binding agreement or enter into
a binding agreement on behalf of such party with respect to the matters
contained herein and as stated herein.

 

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21. No Assignment of Claims. Employee represents and warrants that he has not
previously assigned or transferred, or attempted to assign or transfer, to any
third party, any of the Claims waived and released herein

 

22. Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective heirs, legal
representatives, successors and assigns.

 

23. Counterparts. This Agreement may be signed in counterparts. A facsimile
signature shall have the same force and effect as an original signature.

 

24. Notices. Employee should provide the required notices and shall return the
executed Agreement, and if applicable his revocation of the Agreement, to the
following representative of Purple:

 

Casey McGarvey

Purple Innovation, Inc.

123 E 200 N

Alpine, UT 84004

801-756-2600 x211 (office)

casey@purple.com

 

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IN WITNESS WHEREOF, the undersigned have executed this Agreement on the dates
shown below.

 

Dated: July 3, 2018 /s/ Charlie Smith Charlie Smith     Dated: July 3, 2018 /s/
Terry V. Pearce Terry V. Pearce, for the Company

 

 

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