ITEM 5.02
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers;
Compensatory Arrangements of Certain Officers.
Departure
of Chief Financial Officer
On August 18, 2021, Craig L. Phillips, Chief Financial
Officer of Purple Innovation, Inc. (the “Company”), and the Company determined that Mr. Phillips’ last day of employment
as the Chief Financial Officer of the Company will be August 31, 2021. Mr. Phillips is not leaving the Company as a result of any disagreement
regarding the Company's financial reporting or accounting policies, procedures, estimates, or judgments. The Company will commence a formal
search process for the position of Chief Financial Officer for the Company.
Appoint
of Interim Chief Financial Officer
On August 19, 2021, in connection with the departure
of Craig L. Phillips as the Company’s Chief Financial Officer, the Board of Directors (the “Board”) of the Company appointed
Bennett Nussbaum to serve as the Interim Chief Financial Officer and Principal Financial Officer of the Company.
Prior to joining Purple, Mr. Nussbaum, age 74, served
as the Interim Chief Financial Officer of American Megatrends, Inc. from about April 2019 to September 2020. During that period he also
served as Operating Partner of HGGC, LLC from about December 2017 to September 2020. He also served as Interim CFO at 4over, Inc. from
about December 2017 to September 2018. From April 2016 to March 2017 he was the Chief Financial Officer of American Apparel, LLC. He currently
serves on the advisory board for the W. Edwards Deming Center for Quality, Productivity, and Competitiveness at the Columbia University
Graduate School of Business, a position he has held since 2011. Mr. Nussbaum previously served on the boards of directors of The Collected
Group, LLC from about October 2018 to November 2019, Charlotte Russe, Inc. from about February 2018 to January 2019, and BCBGMAXAZRIA,
LLC from about January 2017 to September 2017.
In connection with his appointment as Interim Chief
Financial Officer, the Company and Mr. Nussbaum entered into a consultancy agreement (the “Consultancy Agreement”) effective
August 19, 2021. The Consultancy Agreement provides that Mr. Nussbaum will serve as Interim Chief Financial Officer for an initial term
of six months from August 19, 2021. The Company may renew the Consultancy Agreement for additional one-month terms upon sixty days’
notice prior to the end of the initial term, or ten days’ notice prior to the end any renewal term. Either party may terminate the
engagement at any time. Under the terms of the Consultancy Agreement, Mr. Nussbaum will receive compensation comprised of (1) $300,000
for the initial six-month term and $50,000 for each additional one-month term, which amount shall be paid in full unless Mr. Nussbaum’s
engagement is terminated for cause, and (2) an additional payment of $100,000 at the end of the initial six-month term and $16,666.67
at the end of each additional one-month term, as well as a discretionary payment of up to $75,000 payable in the Company’s discretion.
In addition, if the price of the Company’s Class A Common Stock increases above $26.00 per share prior to the termination of Mr.
Nussbaum’s engagement with the Company (other than for cause), the Company will pay additional compensation in an amount equal to
the product of (a) the increase from $26.00 per share up to a maximum of $36.00 per share multiplied by (b) 20,000. The Company has also
agreed to reimburse Mr. Nussbaum for transportation and lodging expenses relating to his travel to the Company’s headquarters. The
foregoing summary of the Consultancy Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the
full text of the Consultancy Agreement, a copy of which is attached as Exhibit 10.1 to this report and is incorporated by reference herein.
Forward-Looking
Statements
Certain
statements made herein that are not historical facts are “forward looking statements” within the meaning of the “safe
harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. Statements based on historical data are
not intended and should not be understood to indicate the Company’s expectations regarding future events. Forward-looking statements
provide current expectations or forecasts of future events or determinations. These forward-looking statements are not guarantees of
future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important
factors, many of which are outside the Company’s control, that could cause actual results or outcomes to differ materially from
those discussed in the forward-looking statements. Factors that could influence the realization of forward-looking statements include
the risk factors outlined in the “Risk Factors” section of our Annual Report on Form 10-K filed with the Securities and Exchange
Commission on March 11, 2021 and amended on May 10, 2021, as well as in our Quarterly Reports on Form 10-Q and Current Reports on Form
8-K filed with the Securities and Exchange Commission, The Company does not undertake any obligation to update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise, except as required by law.