Document:

Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

This EMPLOYMENT
AGREEMENT (this “Agreement”) is entered into as of September 21, 2018 (the “Effective
Date”) by and between Joseph B. Megibow, an individual resident of the State of California (“Executive”),
and Purple Innovation, Inc., a Delaware corporation (the “Company”).

 

WHEREAS, the
Company wishes to employ Executive in accordance with the terms of this Agreement;

 

WHEREAS, Executive
wishes to accept employment with the Company according to the terms of this Agreement; and

 

WHEREAS, this
Agreement shall replace and supersede in its entirety any prior employment agreements or understandings between Executive and the
Company;

 

NOW, THEREFORE,
in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows:

 

1. Employment.
The Company hereby employs Executive, and Executive hereby accepts employment by the Company, upon the terms and conditions set
forth in this Agreement. Executive’s employment with the Company shall commence on October 1, 2018 (the “Start Date”)
and shall continue until terminated pursuant to the terms set forth in Section 4 below (the “Employment Period”).

 

2. Position and
Duties.

 

(a) During the Employment
Period, Executive will serve as Chief Executive Officer (“CEO”) of the Company and on the Board of Directors
of the Company (the “Board”). During the term of Executive’s service as CEO, Executive will devote Executive’s
full business time (minimum five days per week), skill, attention, and best efforts to the performance of Executive’s duties,
subject to customary carve-outs for charitable activities and management of personal affairs that do not materially interfere with
the performance of Executive’s duties to the Company. Executive will report to the Board and will have such duties and authority
as determined from time to time by the Board of Directors. So long as Executive is not travelling on Company business, executive’s
duties shall be principally performed in the State of Utah.

 

(b) So long as Executive
is employed by the Company, Executive shall not, without the prior written consent of the Board, accept other employment or perform
other services for compensation or that interfere with Executive’s employment with the Company; provided, however,
that Executive may serve on the Board of Red Lion Hotels Corporation and (on a non-compensated basis) as an officer or director
of or otherwise participate in purely educational, welfare, social, religious and civic organizations so long as such activities
are not in competition with the Company or do not interfere with Executive’s ability to carry out Executive’s duties
under this Agreement.

 

(c) Executive shall comply
with all lawful rules, policies, procedures, regulations and administrative directions now or hereafter reasonably established
by the Board for employees of the Company.

 

     

     

    

 

3. Salary and
Benefits.

 

(a) Salary. During
the Employment Period, the Company shall pay Executive a base salary at the annual rate of $450,000.00, payable in regular installments
in accordance with the Company’s usual payment practices subject to required withholdings and taxes (the “Base
Salary”). Executive may receive increases in Executive’s Base Salary to the extent such an increase is approved
in the sole discretion of the Board.

 

(b) Bonus.

 

(i) Annual
Bonus. With respect to each calendar year during the Employment Period, Executive shall participate in the Company’s
short-term incentive plan and shall be eligible to earn an annual incentive award (“Annual Bonus”) determined
in accordance with the terms and subject to the provisions of that plan, provided, however, that such Annual Bonus shall
(i) not be less than 70% of Base Salary at target performance and (ii) be subject to a multiplier of 50% if the Company achieves
at least minimum performance expectations, 100% if the Company achieves target and 150% if the Company achieves maximum performance.
The multiplier shall be interpolated on a linear basis for performance in between minimum, target and maximum performance levels.
The Board shall, in its sole discretion, determine the financial and other goals to be used to measure Executive’s performance
and shall establish the minimum, target and maximum performance requirements; provided, however, that 90% of Executive’s
target Annual Bonus opportunity shall be tied to financial goals and 10% tied to non-financial goals. Any Annual Bonus will be
paid by no later than two and one-half months following the fiscal year to which it relates or, if later, thirty (30) days following
the completion of the audit for such year, provided Executive remains employed by the Company through the date of payment.

 

(ii) Illustration
of Annual Bonus.

 

	 	Base Salary:	 	$	450,000	 
	 	Target Bonus Pool:	 	$	315,000	 
	 	Financial Target Bonus Pool:	 	$	283,500	 
	 	Non-Financial Target Bonus Pool:	 	$	31,500	 
	 	If Company delivers at mid-point between target and maximum level of financial results, the multiplier on $283,500 will be 125%*:	 	$	354,375	 
	 	If Executive performs at 90% of non-financial targets, then the multiplier on $31,500 will be 90%*:	 	$	28,350	 

 

*Performance will be interpolated
on a linear basis for performance between minimum, target and maximum.

 

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(iii) Equity
Incentive. The Company hereby grants to Executive an option to purchase 538,020 shares of the Company’s Class A Common
Stock, effective upon and with a grant date as of the Start Date.  Thereafter, so long as Executive remains in service as
CEO as of the date of such grants, Executive will receive an automatic grant of an option to purchase 179,340 shares of the Company’s
Class A Common Stock on each of the twelve (12), twenty-four (24) and thirty-six (36) month anniversaries of the Start Date. 
(For purposes of clarity, Executive’s total option grants under the paragraph, including his initial grant on the Start Date,
equals 1,076,040 shares.)  Each option granted under this paragraph shall carry a five (5) year term, and the option shares
shall vest and become exercisable over a four (4) year period according to the following schedule:  one fourth (1/4) on first
anniversary of the grant date and 1/48 each month thereafter.  Each option grant will include a “net” or “cashless”
exercise feature.  The initial option grant is intended to qualify as an inducement grant under NASDAQ listing rules and will
carry an exercise price equal to the greater of (i) the closing price of the Company’s Class A Common Stock on the Start
Date or (ii) the trailing sixty (60) day volume weighted average price of the Company’s Class A Common Stock determined as
of the Start Date.  Each subsequent automatic grant hereunder shall be issued under and subject to the terms of the Company’s
2017 Equity Incentive Plan (or any successor plan) and will carry an exercise price equal to the trailing thirty (30) day volume
weighted average price of the Company’s Class A Common Stock, determined as of the applicable option grant date.  Except
as provided above, the options to be granted to Executive hereunder shall be provided subject to and in conformity with the Company’s
standard form of non-qualified stock option with customary terms and conditions, to be entered into by Executive and the Company.

 

(iv) Performance
Share Unit Award. The Company hereby agrees to grant to Executive on December 31, 2018 (such date to be reasonably extended
in the event the Company is in a black-out trading period) a performance share unit award (“PSU Award”) for
up to 50,000 shares of the Company’s Class A Common Stock, effective upon and with a grant date as of Executive’s Start
Date, provided that the actual amount of the PSU Award shall match the amount of shares of the Company’s Class A Common
Stock held by Executive on the date of the grant (such shares purchased by the Executive being referred to herein as the “Executive
Purchase Shares”).  The PSU Award shall vest on the earlier to occur of either a Change in Control or satisfaction
of each of the following conditions:  (i) Executive remains in continuous service as CEO through September 30, 2021; (ii)
Executive has purchased by December 31, 2018 (such date to be reasonably extended in the event the Company is in a black-out trading
period) and continues to hold an amount of shares of the Company’s Class A Common Stock equal to the amount of the Executive
Purchase Shares through September 30, 2021; and (iii) during the twelve-month period immediately prior to March 31, 2022 the closing
price of the Company’s Class A Common Stock on the principal exchange on which it is listed is at or above $10.00 per share
for 20 trading days over a 30 trading day period; provided, however, that if Executive is unable to satisfy the condition
in (i) above because Executive’s employment is terminated by the Company without Cause or by Executive for Good Reason within
the six-month period immediately prior to September 30, 2021, but the conditions in (ii) and (iii) above have been otherwise satisfied,
the PSU Award shall become fully vested as of the termination of Executive’s employment.

 

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(c) Benefits.
During the Employment Period, Executive will be entitled to benefits including: (1) vacation and other benefits generally available
to other senior executives of the Company from time to time; (2) payment by the Company for the cost of weekly airfare (coach,
planned in advance) between San Francisco and Salt Lake City for twelve (12) months from the Start Date; (3) receipt of a $5,000.00
per month stipend for twelve (12) months from the Start Date, to be used for temporary housing (with any unused amount retained
by the Executive); and (4) receipt of up to $75,000.00 in reimbursement allowance for the cost of reasonable relocation expenses,
including travel related to searching for housing, costs of moving Executive’s family and property, and up to 50% of the
property seller’s brokerage commission related to the disposition of the Executive’s principal residence. If the Executive
fails to relocate within 24 months of the Start Date, the relocation reimbursement shall expire. The foregoing shall not be construed
to require the Company to establish such benefit plans or to prevent the modification or termination of such benefit plans once
established, and no such action or failure thereof shall affect this Agreement. Executive recognizes that the Company and its affiliates
have the right, in their sole discretion, to amend, modify or terminate any benefit plans without creating any rights for Executive.

 

4. Employment
Terms.

 

(a) Employment At-Will.
The Company may terminate Executive’s employment for any reason, with or without cause and with or without prior notice.
In the event that the Company provides less than thirty (30) days’ prior written notice, other than in the case of a termination
for Cause as outlined in 4(d) below, the Executive will be entitled to receive Executive’s Base Salary through the end of
a 30-day period following the date on which written notice is provided to the Executive. Upon any termination of Executive’s
employment, Executive will be deemed to have automatically resigned from all positions with the Company and all affiliated entities
unless otherwise mutually agreed in writing. The Company may, at its sole discretion, relieve Executive of his duties during any
notice period or direct Executive to continue to perform duties as directed by the Board. If Executive resigns from his employment,
he shall provide the Company thirty (30) days’ notice.

 

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(b) Termination without
Cause or Resignation with Good Reason. If Executive’s employment hereunder is terminated without Cause by the Company
or Executive resigns with Good Reason during the Employment Period, then Executive shall be entitled to receive the following:
(i) any accrued and unpaid Base Salary through the termination date; (ii) any eligible unpaid expense reimbursements; (iii) all
other accrued and vested payments, benefits or fringe benefits to which Executive is entitled in accordance with the terms and
conditions of the applicable compensation or benefit plan, program or arrangement of the Company (collectively, items (i) through
(iii) are referred to hereafter as the “Accrued Benefits”). In addition, if such termination occurs after the
first three months (or equivalent period if the Fiscal Year changes) of any Fiscal Year, Executive will also be eligible to receive
(iv) the lesser of (1) the Annual Bonus calculated for such Fiscal Year at the time of termination or (2) the Annual Bonus calculated
at the end of such fiscal year in which the termination occurs. After March 31, 2019, Executive shall also be entitled to (v) an
amount equal to up to nine (9) months of Executive’s annual Base Salary, payable in substantially equal installments in accordance
with the Company’s regular payroll practices for a period of twelve (12) months following the termination, subject to the
Company’s sole option to increase this severance amount up to twelve (12) months of Executive’s annual Base Salary,
to be paid over eighteen (18) months, consistent with the restrictive covenant provisions in Section 5 herein (the “Continued
Salary Payments”); and (vi) Company payment of the cost of health insurance continuation under COBRA for Executive and
Executive’s eligible dependents for a period of six (6) months following the termination, which payment will be made directly
to the insurer on behalf of Executive (items (iv), (v) and (vi) together, the “Severance Benefits”). The Severance
Benefits shall cease to be paid if, in the Board’s reasonable determination, Executive secures full time executive-level
employment or an executive board-level role for compensation, provided, however that Executive shall receive at least three
(3) months of Severance Benefits. A general release of claims in form and substance reasonably required by the Company and not
revoked during any period when such revocation is permitted under relevant law will be required for any Severance Benefits under
this section, other than the Accrued Benefits. The Continued Salary Payments shall commence with the first payment being made on
the first payroll date immediately following the 60th day following Executive’s separation date (the “Continued
Salary Commencement Date”) and such first payment to include any installments that otherwise would have been paid during
the period commencing on the separation date and ending with the Continued Salary Commencement Date.  Each such installment
payment shall be treated as a separate payment for purposes of Code Section 409A (defined in Section 25 below). “Good Reason”
shall mean any of the following: (i) a material change in job title; (ii) a change in reporting structure where the Executive no
longer reports directly to the Board; (iii) a material reduction in job duties or scope; or (iv) a material reduction in base salary
or bonus potential that is not commensurate with other senior Executives at the Company; provided, however, that in the
case of items (ii), (iii) and (iv) of this definition, such change or reduction continues uncured for a period of fifteen (15)
days after written notice from Executive to the Company specifying such change or reduction and Executive’s intention to
terminate this Agreement for Good Reason.

 

(c) Change
in Control. In the event the Company undergoes a Change in Control as defined herein and Executive’s employment is terminated
without Cause within twelve (12) months following the effective date of the Change in Control (together the “Double Trigger
Event”), Executive will be entitled to the same Severance Benefits as set forth in Section 4(b) above. In addition, any
unvested equity awards shall be subject to immediate vesting upon the Double Trigger Event. A general release of claims in form
and substance reasonably required by the Company and not revoked during any period when such revocation is permitted under relevant
law will be required for any payments or vesting acceleration under this section, other than the Accrued Benefits. For purposes
of this Agreement, “Change in Control” means the occurrence of any of the following: (i) one person (or more
than one person acting as a group) acquires ownership of stock of the Company that, together with the stock held by such person
or group, constitutes more than 50% of the total fair market value or total voting power of the stock of the Company; (ii) the
Company enters into an agreement of reorganization, merger or consolidation  pursuant to which the Company or a subsidiary
of the Company is not the surviving corporation; or (iii) the sale of all or substantially all of the Company's assets. A Change
in Control shall not be considered to have occurred so long as either (a) the Company remains publicly traded with an independent
Board, including without limitation in the event that a controlling shareholder of the Company sells more than 50% or more of the
Company’s Class A Common Stock, or (b) any person (or more than one person acting as a group) owns more than 50% of the total
fair market value or total voting power of the Company's stock and acquires additional stock.

 

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(d) Termination
for Cause or Otherwise. If Executive’s employment is terminated (i) by the Company with Cause, (ii) due to Executive’s
death, disability or incapacity, or (iii) by Executive’s resignation during the Employment Period, then the Executive or
Executive’s estate, as applicable, will be entitled to the Accrued Benefits (other than any Annual Bonus in the event of
a termination for Cause).

 

(i) For purposes
of the Agreement, “Cause” shall mean Executive’s (i) failure to perform reasonable duties assigned by
Board or any committee established by the Board, or violation of this Agreement or any express direction or any lawful rule, handbook
regulation or policy established by the Company, the Board or any committee established by the Board which is consistent with the
scope of Executive’s duties under this Agreement, and such failure, refusal or violation continues uncured for a period of
fifteen (15) days after written notice from the Company to Executive specifying the failure, refusal or violation and the Company’s
intention to terminate this Agreement for Cause; (ii) conviction or plea of guilty/nolo contendere to a felony, or perpetration
of a serious dishonest act against the Company or any affiliates; (iii) willful misconduct in connection with duties, including
(a) conduct that is materially injurious to the financial condition or business reputation of the Company, which does or which
is reasonable likely to bring the Company or its affiliates into public disgrace or embarrassment; (b) misappropriation of funds,
(c) personal profit or attempted personal profit in connection with a Company transaction, (d) misrepresentation to the Board of
the financial results, financial condition or other material business results of the Company, or (e) violation of law or regulations
on Company premises; (iv) an act of moral turpitude, fraud dishonesty, theft, or unethical business conduct, any of which is materially
injurious to the Company’s reputation; (v) aiding a competitor which adversely affects Company; (vi) misappropriation of
a Company opportunity for personal benefit; (vii) material compromise of Company trade secrets or other confidential and proprietary
information of the Company or its affiliates; or (viii) chronic alcoholism or drug abuse that materially affects performance.

 

(ii) For purposes
of this Agreement, Executive’s permanent disability or incapacity shall be determined in accordance with the Company’s
long-term disability insurance policy, if such a policy is then in effect, or, if no such policy is then in effect, then such permanent
disability or incapacity shall be deemed to have occurred upon Executive’s inability to perform the essential functions of
the position set forth in Section 2(a), after reasonable accommodation by the Company, for a period of at least 180 days,
in the aggregate, during any period of 365 calendar days, unless further time is required as a reasonable accommodation under the
Americans with Disabilities Act.

 

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5. Restrictive
Covenants. During the period commencing on the Effective Date and terminating on the twelve (12) month or the eighteen
(18) month anniversary (as determined by the Company at the time of employment termination) of the Termination Date (the “Restricted
Period”), Executive shall not directly or indirectly (whether for compensation or without compensation), as principal,
agent, owner, partner, employee, consultant, shareholder, member, director, manager or officer, as the case may be, or otherwise
howsoever (other than as the holder of an ownership interest of not more than 1% of the total outstanding stock of a publicly traded
entity):

 

(a) Noncompetition
Covenant.

 

(i) own, operate, be
engaged in or connected with the operation of or have any financial interest in or advance, lend money to, guarantee the debts
or obligations of or permit Executive’s name or part thereof to be used or employed in any operation, whether a proprietorship,
partnership, joint venture, company or other entity, legal or otherwise, whatsoever, or otherwise carry on or engage in any activity
or business similar to the Company’s business or be connected or involved in any manner whatsoever in any activity or business
similar to the Company’s business in whole or in part; provided, however, that such restrictions shall not preclude Executive
from owning up to 1% of the totally outstanding stock of a publicly traded entity. For purposes of the foregoing, the term “Business”
means the business of designing, manufacturing, distributing and selling mattresses, bedding and cushioning products and such other
products designed, manufactured, distributed or sold by the Company within the twelve-month period immediately preceding the Termination
Date.

 

(b) Non-solicitation
Covenant.

 

(i) solicit, or attempt
to obtain business from, accept business from or contact any current or former (A) customer of the Company regarding activity or
business similar to the Company’s activities or business in whole or in part or (B) material supplier of goods or services
integral to the production of the Company’s products; or

 

(ii) induce or attempt
to induce any Company employee to terminate employment with the Company, hire or participate in the hiring of any Company employee
or independent contractor, or interfere with or attempt to disrupt the relationship, contractual or otherwise, between the Company
and any Company employee or independent contractor. For purposes of this paragraph, a Company employee or independent contractor
means any person employed or contracted by the Company during the Employment Period.

 

6. Confidentiality.

 

(a) Executive will not
at any time (whether during or after Executive’s employment with the Company) (1) retain or use for the benefit, purposes
or account of Executive or any other person; or (2) disclose, divulge, reveal, communicate, share, transfer or provide access to
any person outside the Company (other than its professional advisers who are bound by confidentiality obligations), any non-public,
proprietary or confidential information – including without limitation trade secrets, know-how, research and development,
software, databases, inventions, processes, formulae, technology, designs and other intellectual property, information concerning
finances, investments, profits, pricing, costs, products, services, vendors, customers, clients, partners, investors, personnel,
compensation, recruiting, training, advertising, sales, marketing, promotions, government and regulatory activities and approvals
– concerning the past, current or future business, activities and operations of the Company, its subsidiaries or affiliates
and/or any third party that has disclosed or provided any of same to the Company on a confidential basis (“Confidential
Information”) without the prior written authorization of the Board; provided, that Executive may disclose such
information to Executive’s legal and/or financial advisor for the limited purpose of enforcing Executive’s rights under
this Agreement so long as Executive requires that such legal and/or financial advisors not disclose such information and Executive
shall be liable for any disclosure by such legal and/or financial advisors.

 

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(b) Confidential Information
shall not include any information that is: (i) generally known to the industry or the public other than as a result of Executive’s
breach of this covenant or any breach of other confidentiality obligations by third parties; (ii) made legitimately available
to Executive by a third party without breach of any confidentiality obligation; or (iii) required by applicable law to be
disclosed; provided that Executive shall give prompt written notice to the Company of such requirement, disclose no more
information than is so required, and cooperate with any attempts by the Company to obtain a protective order or similar treatment.

 

(c) Executive acknowledges,
agrees, and understands that (1) nothing in this Agreement prohibits Executive from reporting to any governmental authority or
attorney information concerning suspected violations of law or regulation, provided that Executive does so consistent with 18 U.S.C.
1833, and (2) Executive may disclose trade secret information to a government official or to an attorney and use it in certain
court proceedings without fear of prosecution or liability, provided that Executive does so consistent with 18 U.S.C. 1833.

 

(d) Except as required
by applicable law, Executive will not disclose to anyone, other than Executive’s spouse, legal or financial advisors, the
contents of this Agreement until such time as the Company has filed this Agreement publicly on the Securities and Exchange Commission’s
EDGAR website.

 

(e) Upon termination
of Executive’s employment with the Company for any reason, Executive shall: (1) cease and not thereafter commence use
of any Confidential Information or intellectual property (including, without limitation, any patent, invention, copyright, trade
secret, trademark, trade name, logo, domain name or other source indicator) owned or used by the Company, its subsidiaries or affiliates;
(2) immediately return to the Company, at the Company’s option, all originals and copies in any form or medium (including
memoranda, books, papers, plans, computer files, letters and other data) in Executive’s possession or control (including
any of the foregoing stored or located in Executive’s office, home, laptop or other computer, whether or not Company property)
that contain Confidential Information or otherwise relate to the business of the Company, its affiliates and subsidiaries, except
that Executive may retain only those portions of any personal notes, notebooks and diaries that do not contain any Confidential
Information or are not related to the Company’s business; and (3) notify and fully cooperate with the Company regarding
the delivery of any other Confidential Information of which Executive is or becomes aware.

 

7. Intellectual
Property.

 

(a) Employee has set
forth on Exhibit A attached hereto a complete list identifying all Prior Works (but excluding any third-party confidential
information, and if such third-party confidential information is relevant and has been excluded Employee shall include a notation
that “certain relevant third-party confidential information has been excluded”). For the purposes of this disclosure
“Prior Works” shall mean any works of authorship, inventions, intellectual property, materials, documents or other
work product (including, without limitation, research, reports, software, databases, systems, applications, presentations, textual
works, content or audiovisual materials) that Employee has created, conceived, invented, designed, developed, contributed to or
improved either alone or with third parties, prior to Employee’s employment by the Company, that are relevant to or implicated
by such employment.

 

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(b) If Executive creates,
invents, designs, develops, contributes to or improves any Works, either alone or with third parties, at any time during Executive’s
employment by the Company and within the scope of such employment and/or with the use of any Company resources (“Company
Works”), Executive shall promptly and fully disclose the same to the Company and hereby irrevocably assigns, transfers
and conveys, to the maximum extent permitted by applicable law, all rights and intellectual property rights therein (including
rights under patent, industrial property, copyright, trademark, trade secret, unfair competition and related laws) to the Company
to the extent ownership of any such rights does not vest originally in the Company.

 

(c) Executive agrees
to keep and maintain adequate and current written records (in the form of notes, sketches, drawings and any other form or media
requested by the Company) of all Company Works. The records will be available to and remain the sole property and intellectual
property of the Company at all times.

 

(d) Executive shall take
all requested actions and execute all requested documents (including any licenses or assignments required by a government contract)
at the Company’s expense (but without further remuneration) to assist the Company in validating, maintaining, protecting,
enforcing, perfecting, recording, patenting or registering any of the Company’s rights in the Company Works. If the Company
is unable for any other reason to secure Executive’s signature on any document for this purpose, then Executive hereby irrevocably
designates and appoints the Company and its duly authorized officers and agents as Executive’s agent and attorney in fact,
to act for and in Executive’s behalf and stead to execute any documents and to do all other lawfully permitted acts in connection
with the foregoing.

 

(e) Executive shall not
improperly use for the benefit of, bring to any premises of, divulge, disclose, communicate, reveal, transfer or provide access
to, or share with the Company any confidential, proprietary or non-public information or intellectual property relating to a former
employer or other third party without prior written permission of such third party. Executive shall comply with all relevant policies
and guidelines of the Company regarding the protection of confidential information and intellectual property and potential conflicts
of interest. Executive acknowledges that the Company may amend any such policies and guidelines from time to time, and that Executive
remains at all times bound by their most current version that has been communicated to Executive.

 

8. Return of
Company Property. At the termination of the Employment Period and at any other time upon the request of the Company, Executive
shall deliver to the Company any and all of the Company’s documents, plans, records, computer tapes, software, drawings,
notes, memoranda, specifications, devices (including, without limitation, any cellular phone or computer), and formulas relating
to the Company’s business, together with all copies thereof, which is in the possession of Executive.

 

9. Enforcement.
If, at the time of enforcement of Section 5, Section 6 or Section 7, a court holds that the restrictions stated
herein are unreasonable under circumstances then existing, the parties hereto agree that the maximum period, scope or geographical
area reasonable under such circumstances shall be substituted for the stated period, scope or area. It is specifically understood
and agreed that any breach of the provisions of Section 5, Section 6 or Section 7 are likely to result in irreparable
injury to the Company and the parties hereto agree that money damages would be an inadequate remedy for any breach of Section 5,
Section 6 or Section 7. Therefore, in the event of a breach or threatened breach of Section 5, Section 6 or
Section 7, the Company or its successors or assigns shall, in addition to other rights and remedies existing in their favor,
be entitled to specific performance and/or injunctive or other relief in order to enforce, or prevent any violations of, Section 5,
Section 6 or Section 7.

 

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10. Representations
and Warranties.

 

(a) Executive hereby
represents and warrants to the Company that (i) the execution, delivery and performance of this Agreement by Executive does
not and will not conflict with, breach, violate or cause a default under any contract, agreement, instrument, order, judgment or
decree to which Executive is a party or by which Executive is bound, (ii) Executive is not a party to or bound by any employment
agreement, non-solicitation agreement, assignment of inventions or confidentiality agreement with any other person or entity that
would materially impede with Executive’s ability to perform the Executive’s obligations under this Agreement; (iii)
Executive is not subject to any noncompetition agreement or any other agreement or restriction of any kind that would impede in
any way the ability of Executive to carry out fully all activities of Executive in furtherance of the business of the Company,
(iv) Executive is not in violation of a confidentiality, non-solicitation or non-competition agreement or any other agreement relating
to the relationship of Executive with any third party, because of the nature of the business conducted by the Company, and (v) upon
execution and delivery of this Agreement, this Agreement shall be the valid and binding obligation of Executive, enforceable against
Executive in accordance with its terms.

 

(b) The Company hereby
represents and warrants to Executive that (i) the execution, delivery and performance of this Agreement by the Company does
not and will not conflict with, breach, violate or cause a default under any contract, agreement, instrument, order, judgment or
decree to which the Company is a party or by which the Company is bound and (ii) upon execution and delivery, this Agreement
shall be the valid and binding obligation of the Company, enforceable against the Company in accordance with its terms.

 

11. Arbitration.
Any controversy, dispute or claim arising out of or in connection with or relating to this Agreement, or the breach, termination
or validity hereof, or any other claim by Executive arising from the termination of Executive’s employment (any such controversy,
dispute or claim being referred to as a “Dispute”) shall be finally determined by binding arbitration administered
by a government sponsored arbitration service in accordance with its applicable rules. The arbitration shall be conducted before
a panel of three neutral arbitrators appointed in accordance with the applicable rules of the service. Judgment on the award rendered
by the arbitrators may be entered in any court having jurisdiction thereof. The Company will advance all arbitration fees to the
extent allowed under applicable law. The arbitrators conducting any such arbitration shall award the prevailing party his/its reasonable
attorneys’ fees and expenses, including any advanced arbitration fees to the extent allowed under applicable law. Any arbitration
shall be conducted in Salt Lake City, UT. Nothing in this Section 11 shall limit or prevent the Company from seeking to enforce
its rights under Sections 5, 6, and 7 by injunction or other application to a court of competent jurisdiction.

 

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12. Indemnification.
Both during and after the Employment Period, the Company will indemnify Executive and hold Executive harmless as provided in Article
VIII of the Company’s Amended and Restated Bylaws and to the maximum extent permitted by law against and in respect of any
and all actions, suits, proceedings, investigations, claims, demands, judgments, costs, and expenses (including reasonable attorneys’
fees), losses, and damages resulting from Executive’s performance of duties on behalf of the Company.

 

13. Successors
and Assigns. This Agreement shall bind and inure to the benefit of and be enforceable by Executive and the Company and
their respective heirs, successors and permitted assigns. Neither party may assign any of its rights or assign or delegate any
of its obligations hereunder without the prior written consent of the other party hereto; provided, however, that
the Company shall be permitted to assign this Agreement to any successor to all or substantially all of its assets that agrees
in writing to assume all of the Company’s obligations hereunder.

 

14. Notices.
All notices, demands or other communications to be given or delivered under or by reason of the provisions of this Agreement shall
be in writing and shall be deemed to have been given (a) on the date established by the sender as having been delivered personally,
(b) on the date delivered by a private courier as established by the sender by evidence obtained from such courier, (c) on
the date sent by facsimile or e-mail transmission (with acknowledgement of complete transmission), or (d) on the fifth day
after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Notices, demands or communications
to any party hereto will, unless another address is specified in writing pursuant to this Section 14, be sent to the addresses
indicated below.

 

	 	

If to Executive:

        Joseph B. Megibow

        3559 Mt. Diablo Blvd.
        #124

        Lafayette, CA 94549

        Email: megibow+purple@gmail.com
	
        If to the Company:

        Purple Innovation, Inc.

        123 E. 200 N.

        Alpine, UT 84004

        Chair of the Board, with
        copy to General Counsel

        Email: casey@purple.com

 

15. Severability.
Whenever possible, each provision of this Agreement will be interpreted in such manner as to be valid under applicable law; but,
if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule
in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or any other jurisdiction,
but except as otherwise set forth in this Agreement, this Agreement will be reformed, construed and enforced in such jurisdiction
as if such invalid, illegal or unenforceable provision had never been contained herein.

 

16. Complete
Agreement. This Agreement embodies the complete agreement and understanding between the parties with respect to the subject
matter hereof and supersedes and preempts any prior understandings, agreements or representations by or among the parties, written
or oral, which may have related to the subject matter hereof in any way.

 

17. Signatures;
Counterparts. This Agreement may be executed in one or more counterparts, each of which will be deemed an original but
all of which together will constitute one and the same instrument. For purposes hereof, a facsimile signature, portable document
format (.pdf) signature or signature sent by electronic transmission will be considered an original signature.

 

    	 	11	 

     

    

 

18. Governing
Law. All issues and questions concerning the construction, validity, enforcement and interpretation of this Agreement shall
be governed by, and construed in accordance with, the internal laws of the State of Delaware, without giving effect to any choice
of law or conflict of law rules or provisions (whether of the State of Delaware or any other jurisdiction).

 

19. Clawback.
All remuneration provided under Section 3(b) (i), (ii) and (iv) of this Agreement shall be subject to forfeiture or other penalties
pursuant to applicable law and any Company clawback policy. In addition, (A) all remuneration provided under Section 3(b)(iii)
of this Agreement shall be subject to forfeiture or other penalties pursuant to applicable law, and (B) vested remuneration under
Section 3(b)(iii), shall be subject to forfeiture or other penalties pursuant to any Company clawback policy, but only to the extent
that Executive would have been terminated from his service as CEO for Cause (other than with respect to part (i) of the definition
of “Cause” included herein) prior to reaching the applicable vesting period described in Section 3(b)(iii) had the
Board known of the actions constituting such Cause at the time of Executive’s actions.

 

20. Survival.
The provisions of Section 5, Section 6, Section 7, Section 8, Section 9, Section 11, Section 13,
Section 14, Section 15, Section 16, Section 18, Section 19,this Section 20, Section 22, Section 23,
Section 24, Section 26, Section 27, and Section 29 shall survive the termination of Executive’s employment
and the termination of this Agreement for any reason.

 

21. Tax Withholdings.
The Company shall deduct or withhold from any amounts owing from the Company to Executive any federal, state, local or foreign
withholding taxes, excise tax, or employment taxes imposed with respect to Executive’s compensation or other payments from
the Company or Executive’s ownership interest in the Company, if any (including, without limitation, wages, bonuses, dividends,
the receipt or exercise of equity options and/or the receipt or vesting of restricted equity).

 

22. Waiver of
Jury Trial. AS A SPECIFICALLY BARGAINED FOR INDUCEMENT FOR EACH OF THE PARTIES HERETO TO ENTER INTO THIS AGREEMENT (AFTER
HAVING THE OPPORTUNITY TO CONSULT WITH COUNSEL), EACH PARTY HERETO EXPRESSLY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY LAWSUIT OR
PROCEEDING RELATING TO OR ARISING IN ANY WAY FROM THIS AGREEMENT OR THE MATTERS CONTEMPLATED HEREBY.

 

23. Headings;
No Strict Construction. The headings of the paragraphs and sections of this Agreement are inserted for convenience only
and shall not be deemed a part of or affect the construction or interpretation of any provision hereof. The language used in this
Agreement shall be deemed to be the language chosen by the parties hereto to express their mutual intent, and no rule of strict
construction shall be applied against any party.

 

24. Executive’s
Cooperation. During the Employment Period and thereafter, Executive shall, subject to the Company reimbursing Executive
for out-of-pocket expenses, cooperate with the Company in any internal investigation or administrative, regulatory or judicial
proceeding as reasonably requested by the Company (including, without limitation, Executive being available to the Company upon
reasonable notice for interviews and factual investigations, appearing at the Company’s request to give testimony without
requiring service of a subpoena or other legal process, volunteering to the Company all pertinent information and turning over
to the Company all relevant documents which are or may come into Executive’s possession, all at times and on schedules that
are reasonably consistent with Executive’s other permitted activities and commitments).

 

    	 	12	 

     

    

 

25. Corporate
Opportunity. During the Employment Period, Executive shall submit to the Board all business, commercial and investment
opportunities or offers presented to Executive or of which Executive becomes aware which relate to the business of the Company
at any time during the Employment Period (“Corporate Opportunities”). Unless approved by the Board, Executive
shall not accept or pursue, directly or indirectly, any Corporate Opportunities on Executive’s own behalf.

 

26. Section 409A
Compliance. The intent of the parties is that payments and benefits under this Agreement comply with Section 409A of the
Internal Revenue Code of 1986, as amended, and the regulations and guidance promulgated thereunder (collectively, “Code
Section 409A”) and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted to be in compliance
therewith. To the extent that any provision hereof is modified in order to comply with Code Section 409A, such modification shall
be made in good faith and shall, to the maximum extent reasonably possible, maintain the original intent and economic benefit to
Executive and the Company of the applicable provision without violating the provisions of Code Section 409A. In no event whatsoever
shall the Company be liable for any additional tax, interest or penalty that may be imposed on Executive by Code Section 409A or
damages for failing to comply with Code Section 409A. Notwithstanding anything herein to the contrary, a termination of employment
shall be deemed to have occurred at the time such termination constitutes a “separation from service” within the meaning
of Code Section 409A for purposes of any provision of this Agreement providing for the payment of any amounts or benefits in connection
with a termination of employment and, for purposes of any such provision of this Agreement, references to a “termination,”
“termination of employment” or like terms shall mean a “separation from service.” Notwithstanding any other
provision to the contrary, in no event shall any payment under this Agreement that constitutes “deferred compensation”
for purposes of Code Section 409A be subject to offset by any other amount unless otherwise permitted by Code Section 409A.

 

27. Amendment
and Waiver. The provisions of this Agreement may be amended or waived only with the prior written consent of the Company
and Executive, and no course of conduct or failure or delay in enforcing the provisions of this Agreement shall affect the validity,
binding effect or enforceability of this Agreement.

 

28. Key Person
Insurance. The Company and its affiliates shall have the right throughout the term of this Agreement to obtain or increase
insurance on Executive’s life in such amount as the Board or such affiliate (as applicable) determines, in the name of the
Company or such affiliates, as the case may be, and for its sole benefit or otherwise. Upon reasonable advance notice, Executive
will cooperate in any and all necessary physical examinations without expense to Executive, supply information and sign documents
and otherwise cooperate fully with each of the Company and its affiliates as the Company and its affiliates may request.

 

29. Read and
Understood. Executive has read this Agreement carefully and understands each of its terms and conditions. Executive has
sought independent legal counsel of Executive’s choice to the extent Executive deemed such advice necessary in connection
with the review and execution of this Agreement.

 

    	 	13	 

     

    

 

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

 

	 	The Company:
	 	 	 
	 	Purple Innovation, Inc.
	 	 	 
	 	By:	/s/ Terry V. Pearce
	 	 	Terry V. Pearce
	 	 	Chairman of the Board
	 	 	 
	 	Executive:
	 	 
	 	/s/ Joseph B. Megibow
	 	Joseph B. Megibow

 

    	 	14kr_Ex10_1

		
			Exhibit 10.1
		

		
			 
		

		
			This document constitutes part of a prospectus covering securities that have been registered under the Securities Act of 1933.
		

		
			The date of this document is __________
		

		
			 
		

		
			PERFORMANCE UNIT AWARD
		

		
			UNDER THE PROVISIONS OF
		

		
			ONE OF THE KROGER CO.
		

		
			LONG-TERM INCENTIVE PLANS
		

		
			 
		

		
			Pursuant to the provisions of a Long-Term Incentive Plan (the “Plan”) of The Kroger Co., the Compensation Committee of the Board of Directors (the “Committee”) has granted to you,  on ____________, _____,  a performance unit award, on and subject to the terms of the Plan and your agreement to the following terms, conditions and restrictions.
		

		
			 
		

		
			1.         Delivery of Shares. Subject to and upon the terms, conditions, and restrictions set forth in this Agreement, The Kroger Co. (the “Company” or “Kroger”) will deliver to you the number of common shares, $1 par value per share, of Kroger (the “Shares”) equal to the product determined by multiplying (a) the number of performance units converted from the value indicated on your [____] Executive Compensation form or award letter with respect the [_________] long term incentive plan (“Notice of Award”) by (b) the percentage determined in accordance with the provisions of Paragraphs 2 and 3 below. Delivery of Shares will be deemed to occur on the date of the regularly scheduled meeting of Kroger’s Board of Directors held in [_______, _____] or such other date as determined by the Committee, and Shares will be deposited into your account at Kroger’s designated brokerage firm as soon thereafter as is administratively practical.
		

		
			 
		

		
			2.         Performance Criteria. You are eligible to earn a percentage of the value indicated on your Notice of Award.  The percentage will be determined based on (i) cumulative savings included in net operating profit growth; and (ii) cumulative free cash flow.
		

		
			 
		

		
			3.         Calculation of Awards.  The number of shares earned will be based on the criteria set forth in Paragraph 2 above, calculated in the manner shown on Attachment A, and prorated in accordance with Paragraph 5 below, if applicable.  Any resulting partial Shares will be rounded up or down to the nearest whole Share amount.  Kroger will pay to participants, in cash, an amount equal to the product of the total dividends per share paid on Kroger common shares during the Performance Period and the number of shares earned during the Performance Period.  In all cases, the effect during the Performance Period of accelerating the payment, funding, or recognition of expense of multi-employer pension liability, or the imposition of pension withdrawal liability; in either case undertaken by Kroger as part of its effort to mitigate its exposure to multi-employer pension plan liability, will be excluded for purposes of calculating the award hereunder.  In no event will awards exceed 100% of the value indicated on the Notice of Award.
		

		
			 
		

		
			4.         Adjustments. The Committee will make such adjustments as it deems necessary or desirable based on changes in accounting or tax law, or on account of any acquisition,
		

		
			
		

		
			

		 

		

			1

		

 

		

		
			 
		

		
			disposition or other developments that may affect the calculation of awards under this Agreement.
		

		
			 
		

		
			5.         Termination of Employment, Permanent Disability, Retirement, Leave of Absence, or Death of Participant.
		

		
			 
		

		
			(a)        Participation in the Plan does not create a contract of employment, or grant any employee the right to be retained in the service of Kroger.  Any participant whose employment is terminated by Kroger; who voluntarily terminates his or her employment (other than in accordance with paragraph (b) below); or whose pay level drops below pay level 35, prior to the end of the Performance Period, will forfeit all rights hereunder.
		

		
			 
		

		
			(b)        If a participant voluntarily terminates his or her employment after reaching age 55 with at least five years of service with Kroger,  or due to permanent disability as determined by Kroger,  participation will continue, and that participant will receive a prorata number of Shares earned according to the terms of the award proportionate to the period of active service during the Performance Period.
		

		
			 
		

		
			(c)        If a participant is on an approved leave of absence during the Performance Period for which they are eligible, the participant will be given service credit for 90 days.  Thereafter, the award will be reduced by a pro-rata amount for any leave time that extends beyond 90 days, with discretion reserved for special circumstances.
		

		
			 
		

		
			(d)        If a participant dies during the Performance Period, participation will continue until the end of the fiscal year in which the death occurs, and the participant's designated beneficiary (or if none, then the participant's estate) will receive a prorata number of Shares earned and dividends earned according to the terms of the award proportionate to the period of active service during the Performance Period before the participant's death.  The amount of Shares to be issued, as soon as reasonably practicable as determined by the Committee, will be determined as of the end of the fiscal year in which the participant’s death occurs based on actual results as of the end of that fiscal year.
		

		
			 
		

		
			(e)        Notwithstanding anything contained in this paragraph 5 to the contrary, in the event that during the Performance Period the participant provides services as an employee, director, consultant, agent, or otherwise, to any of Kroger’s competitors, this agreement and the award hereunder terminate.   For purposes of this paragraph 5(d), a competitor is any business that sells groceries, food, drugs, health and beauty care items, motor fuels, or pharmaceuticals, at retail in one or more of the same geographic areas that Kroger sells those products.
		

		
			 
		

		
			(f)         For purposes of the Plan, “period of active service” means the period of time that the participant actually is working for Kroger, subject to paragraph 4(c), plus any earned but unused vacation for the year in which the participant ceases employment, and excluding any “banked” vacation earned but not taken in prior years.
		

		
			 
		

		
			6.         Change in Control.  Shares in an amount equal to 50% of the number of Shares and the dividends related to those shares indicated on the Notice of Award will be delivered to 
		

		
			
		

		
			

		 

		

			2

		

 

		

		
			you if at any time after the date of this agreement any of the following occur:
		

		
			 
		

		
			(a)        without prior approval of Kroger’s Board of Directors, any person,  group, entity or group thereof, excluding Kroger’s employee benefit plans, becomes the owner of, or obtains the right to acquire, 20% or more of the voting power of our then outstanding voting securities; or
		

		
			 
		

		
			(b)        a tender or exchange offer has expired, other than an offer by Kroger, under which 20% or more of our then outstanding voting securities have been purchased; or
		

		
			 
		

		
			(c)        as a result of, or in connection with, or within two years following (i) a merger or business combination, (ii) a reorganization, or (iii) a proxy contest, in any case which was not approved by Kroger’s Board of Directors, the individuals who were directors of Kroger immediately before the transaction cease to constitute at least a majority thereof, except for changes caused by death, disability or normal retirement; or
		

		
			 
		

		
			(e)        Kroger’s shareholders have approved (i) an agreement to merge or consolidate with or into another corporation and Kroger is not the surviving corporation or (ii) an agreement, including a plan of liquidation, to sell or otherwise dispose of all or substantially all of Kroger’s assets.
		

		
			 
		

		
			7.         Transferability. Your right to receive a payout under this award is not assignable or transferable by you other than by will or by the laws of descent and distribution.
		

		
			 
		

		
			8.         Taxes.  In connection with a payment to you under this award, Kroger will withhold or cause to be withheld from that payment the amount of tax required by law to be withheld with respect to the payment.   For Shares to be issued under this award, Kroger will withhold sufficient Shares with a market value equal to the tax required by law to be withheld with respect to the award unless you have notified us in writing in advance of the issuance of the Shares of your desire to pay the taxes and have made the funds available to us or our designated agent.
		

		
			 
		

		
			9.         Compliance with Code.  This award is designed to be exempt from the provisions of Section 409A of the Code as a short term deferral.  This award will be construed, administered, and governed in a manner that affects that intent.   Kroger does not represent or guarantee that any particular federal or state income, estate, payroll, or other tax consequences will occur because of this award and the compensation provided hereunder.  In the event that any other agreement serves to modify this award in a manner that causes the award to not be exempt from Section 409A as a short term deferral, any issuance of Shares or payment of cash to a “specified employee” within the meaning of Treas. Reg. 1.409A-1(i) (or any successor thereto) on account of termination of employment will be made six months after the date of termination, and termination of employment will not be considered to occur until there is a termination of employment within the meaning of Treasury Regulation Section 1.409(h)(1)(ii), where the employee’s services permanently decrease to less than 50% of the average level of services performed over the preceding 36 month period.
		

		
			
		

		
			

		 

		

			3

		

 

		

		
			10.       Acceptance of Agreement.  In the event that you fail to accept this Agreement within one year from the grant date, Kroger will accept it on your behalf, and your failure to notify Kroger in writing directed to the Benefits Department, The Kroger Co., 1014 Vine Street, Cincinnati, OH  45202, of your desire to reject this Agreement will be deemed to be your express authority for Kroger to accept this Agreement on your behalf.
		

		
			 
		

		
			11.       Amendments. Any amendment to the Plan will be deemed to be an amendment to this Agreement to the extent that the amendment is applicable hereto.  No amendment will adversely affect your rights under this Agreement without your consent. Notwithstanding the forgoing, to the extent necessary to preserve Kroger’s federal tax deduction that would otherwise be denied due to Section 162(m) of the Internal Revenue Code (applicable only to certain top senior executives), Kroger may elect (without your consent) to delay delivery of your award Shares until 30 days following your termination of employment.  If Kroger so elects to delay payment, all other deferred compensation payments for the year that would be nondeductible under Section 162(m) also will be delayed to avoid negative tax consequences to you.
		

		
			 
		

		
			12.       Severability. In the event that any provision of this Agreement is invalidated for any reason by a court of competent jurisdiction, any provision so invalidated will be deemed to be separable from the other provisions hereof.  The remaining provisions will continue to be valid and fully enforceable.
		

		
			 
		

		
			13.       Relation to Plan. This Agreement is subject to the terms and conditions of the Plan. In the event of any inconsistency between the provisions of this Agreement and the Plan, the Plan will govern. Capitalized terms used herein without definition have the meanings assigned to them in the Plan. The Committee acting pursuant to the Plan, as constituted from time to time, will, except as expressly provided otherwise herein, have the right to determine any questions that arise in connection with the grant of this award.
		

		
			 
		

		
			14.       Successors and Assigns. Without limiting Paragraph 7 hereof, the provisions of this Agreement will inure to the benefit of, and be binding upon, your successors, administrators, heirs, legal representatives and assigns, and the successors and assigns of Kroger.
		

		
			 
		

		
			15.       Governing Law. The interpretation, performance, and enforcement of this Agreement will be governed by the laws of the State of Ohio, without giving effect to the principles of conflict of laws thereof.
		

		
			 
		

			
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						THE KROGER CO.

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						By

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						“participant”

				

		
			 
		

		
			
		

		
			

		 

		

			4

		

 

		

		
			ATTACHMENT A
		

		
			TO
		

		
			PERFORMANCE UNIT AWARD
		

		
			 
		

		
			Each performance measure accounts for [XX%] of the potential payout.  The table below illustrates how the payout will be determined:
		

		
			 
		

		
			Cumulative Savings Included in Net Operating Profit Growth (XX%)
		

		
			Cut-in = 50%               [$XXXXX]
		

		
			Goal = 100%               [$XXXXX]
		

		
			 
		

		
			Cumulative Free Cash Flow (XX%)
		

		
			Cut-in = 50%               [$XXXXX]
		

		
			Goal = 100%               [$XXXXX]
		

		 

		

			5

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