Document:

Exhibit 10.3

 

FIRST AMENDED AND RESTATED EXECUTIVE

CHANGE IN CONTROL SEVERANCE AGREEMENT

 

THIS FIRST AMENDED
AND RESTATED EXECUTIVE CHANGE IN CONTROL SEVERANCE AGREEMENT ("Agreement") is made and entered into as of
March 26, 2021 (the “Effective Date”), by and among Simmons First National Corporation ("Company"),
an Arkansas corporation, Simmons Bank (“Bank” and together with the Company (as more fully described in Article
12), “Simmons”), an Arkansas state bank and Steve Massanelli ("Executive").

 

R E C I T A L S:

 

WHEREAS, Simmons acknowledges
that the Executive is to significantly contribute to the growth and success of Simmons, and as a publicly held corporation, a Change
in Control of the Company may occur with or without the approval of the Board of Directors of the Company ("Company Board"),
and the Company Board also recognizes that the possibility of such a Change in Control may contribute to uncertainty on the part
of senior management resulting in distraction from their operating responsibilities or in the departure of senior management;

 

WHEREAS, the Company
Board believes that outstanding management is critical to advancing the best interests of the Bank, the Company and its shareholders
and that it is essential that the management of Simmons’ business be continued with a minimum of disruption during any proposed
bid to acquire Simmons or to engage in a business combination with Simmons, and Simmons believes that the objective of securing
and retaining outstanding management will be achieved if certain of Simmons’ senior management employees are given assurances
of employment security so they will not be distracted by personal uncertainties and risks created by such circumstances;

 

WHEREAS, the Company
and the Executive previously entered into an Executive Severance Agreement effective February 5, 2016 (“Prior Agreement”),
which is hereby superseded in its entirety by this Agreement; and

 

WHEREAS, concurrently
with executing this Agreement, the Company and the Executive have executed and delivered an indemnification agreement providing
the Executive with indemnification with respect to his service to Simmons as a member of senior management.

 

NOW, THEREFORE, in
consideration of the mutual covenants and obligations herein and the compensation Simmons agrees herein to pay the Executive, and
of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Simmons and the Executive
agree as follows:

 

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ARTICLE 1

TERM OF AGREEMENT

 

1.1       Term.
This Agreement shall be effective for thirty-six (36) months from the Effective Date and will automatically be extended for
twelve (12) months as of each anniversary date of the Effective Date ("Agreement Term") unless the Agreement is
terminated by Simmons upon written notification to the Executive, within thirty (30) days before an anniversary date of the Effective
Date, that the Agreement will terminate as of last day of the Agreement Term as in effect immediately prior to such anniversary
date.

 

Unless Simmons has
effectively terminated this Agreement as prescribed above in this Section 1.1, in the event of a Change in Control, the Agreement
Term shall be amended to twenty-four (24) months commencing upon the Control Change Date (as defined in Section 1.3) and shall
then expire at the end of such twenty-four (24) month period.

 

1.2       Change
in Control. Change in Control shall mean a change in ownership or effective control of the Company, or a change in the ownership
of a substantial portion of the assets of the Company, each as defined in Treasury Regulation Section 1.409A-3(i)(5) or any subsequently
applicable Treasury Regulation.

 

1.3       Control
Change Date. Control Change Date means the date on which an event described in Section 1.2 occurs. If a Change in Control occurs
on account of a series of transactions, the Control Change Date is the date of the last of such transactions.

 

ARTICLE 2

TERMINATION OF EMPLOYMENT

 

2.1       General.
The Executive shall be entitled to receive Termination Compensation, as defined in Section 2.5, according to this Article if:

 

(a) the Executive's
employment is involuntarily terminated as specified in Section 2.2, or

 

(b) the Executive voluntarily
terminates employment as specified in Section 2.3;

 

provided, however, that no Termination
Compensation shall be payable to the Executive, and the Executive shall forfeit all rights, under Section 2.5 of this Agreement
unless a Release in substantially the form attached as Exhibit A (the “Release”) is signed and becomes
irrevocable within the time period specified by the Release for review and revocation. To the extent any Termination Compensation
under Section 2.5 has been paid and the Release requirement of this Section 2.1 is not met, then any such Termination Compensation
previously paid shall be forfeited and the Executive shall repay such forfeited Termination Compensation to Simmons within thirty
(30) days following demand by Simmons.

 

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2.2       Termination
by Simmons.

 

(a) The Executive shall
be entitled to receive Termination Compensation (as described in Section 2.5) if during an Agreement Term, all employment of the
Executive is terminated by Simmons without Cause on or after a Control Change Date.

 

(b) The Executive shall
be entitled to receive Termination Compensation (as described in Section 2.5) if during an Agreement Term, all employment of the
Executive is terminated by Simmons without Cause within the 180 days immediately preceding a Control Change Date.

 

(c) Cause means, for
purposes of this Agreement, (i) willful and continued failure by the Executive to perform his duties as established by Simmons;
(ii) a material breach by the Executive of his fiduciary duties of loyalty or care to Simmons; (iii) conviction of a felony; or
(iv) willful, flagrant, deliberate and repeated infractions of material published policies and procedures of Simmons of which the
Executive has actual knowledge ("Cause Exception"). If Simmons desires to discharge the Executive under the Cause
Exception, it shall give notice to the Executive as provided in Section 2.7 and the Executive shall have thirty (30) days after
notice has been given to him in which to cure the reason for Simmons' exercise of the Cause Exception. If the reason for Simmons’
exercise of the Cause Exception is timely cured by the Executive (as determined by a committee appointed by the Board of Directors
of Simmons), Simmons’ notice shall become null and void.

 

2.3       Voluntary
Termination.  The Executive shall be entitled to receive Termination Compensation (as defined in Section 2.5) if a Change in
Control occurs during an Agreement Term, and the Executive voluntarily terminates employment after a Control Change Date during
an Agreement Term and within six (6) months following the occurrence of a Trigger Event.

 

2.4       Trigger
Event. A Trigger Event means, for purposes of this Agreement, the occurrence of any one of the following events:

 

		(a)	the failure by the Company or the Bank to reelect or appoint the Executive to a position with duties,
functions and responsibilities substantially equivalent to the position held by the Executive on the Control Change Date;

 

		(b)	a material modification by the Company or the Bank of the title, duties, functions or responsibilities
of the Executive without his written consent;

 

		(c)	the failure of the Company or the Bank to permit the Executive to exercise such responsibilities
as are consistent with the Executive's position and of such a nature as are usually associated with such office of a corporation
engaged in substantially the same business as Simmons;

 

		(d)	the Company or the Bank requires the Executive to relocate his employment more than fifty (50)
miles from his place of employment, without the written consent of the Executive, excluding reasonably required business travel
or temporary assignments for a reasonable period of time;

 

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		(e)	any decrease, without the Executive’s written consent, in the Executive’s (i) annual
base salary, (ii) target or maximum annual cash incentive award opportunity or (iii) target annual equity incentive award opportunity;

 

		(f)	the Company or the Bank shall fail to make a payment when due to the Executive; or

 

		(g)	a breach by Simmons of the obligations set forth in Article 15 of this Agreement.

 

2.5       Termination
Compensation. Termination Compensation equal to two (2) times the Executive's Base Period Income shall be paid to the Executive
in a single sum payment in cash on the thirtieth (30th) business day after the later of (a) the Control Change Date
and (b) the date of the Executive's employment termination; provided that if at the time of the Executive's termination of employment
the Executive is a Specified Employee, then payment of the Termination Compensation to the Executive shall be made on the first
day of the seventh (7th) month following the Executive's employment termination.

 

2.6       Base
Period Income. The Executive's Base Period Income equals the sum of (a) his annual base salary as of the Executive's termination
date, and (b) the greater of: (i) the average of any annual cash incentive award paid or payable to the Executive for the Company's
last two completed fiscal years prior to the Executive’s employment termination or (ii) the Executive's target annual cash
incentive award opportunity for the year in which the Executive’s employment termination occurs.

 

2.7       Notice
of Termination. Any termination by Simmons under the Cause Exception or by the Executive after a Trigger Event shall be communicated
by Notice of Termination to the other party hereto. A "Notice of Termination" shall be a written notice which
(a) indicates the specific termination provision in this Agreement relied upon, (b) sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive's employment under the provision so indicated and (c)
if the termination date is other than the date of receipt of such notice, specifies the effective date of termination.

 

2.8       Specified
Employee.  Specified Employee is a “specified employee” (within the meaning of Section 409A (as defined below))
of Simmons (or any related “service recipient” within the meaning of Section 409A).

 

ARTICLE 3

ATTORNEYS’ FEES

 

In the event that the
Executive incurs any attorneys’ fees in protecting or enforcing his rights under this Agreement and the Executive prevails
on at least one material point in such dispute or claim, Simmons shall reimburse the Executive for such reasonable attorneys' fees
and for any other reasonable expenses related thereto. Such reimbursement shall be made within thirty (30) days following the Executive’s
written request (which must include a detailed description of such fees and expenses) which must be submitted within thirty (30)
days following final resolution of the dispute or claim giving rise to such fees and expenses.

 

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ARTICLE 4

LIFE INSURANCE POLICIES

 

 In connection
with the Executive’s termination of employment, the life insurance and accidental death and dismemberment coverage provided
by Simmons for the Executive and his or her eligible dependents will terminate as of the date specified in the applicable policy
or contract unless the Executive elects to convert such coverage to an individual policy in accordance with the terms of such policy
or contract; provided, however, that the Executive will be responsible for payment of any premiums on any such continued coverage
elected. Upon the Executive’s termination of employment, Simmons shall not be obligated to continue the Executive's participation
in the Simmons First Endorsement Split-Dollar Life Insurance Program or provide any alternative benefits to such program after
termination of the Executive's employment, except as specifically provided pursuant to the terms of the program documents governing
such program.

 

ARTICLE 5

MITIGATION OF PAYMENT

 

Simmons and the Executive
agree that, following the termination of employment by the Executive with Simmons, the Executive has no obligation to take any
steps whatsoever to secure other employment and such failure by the Executive to search for or to find other employment upon termination
from Simmons shall in no way impact the Executive's right to receive payment under any of the provisions of this Agreement.

 

ARTICLE 6

DECISIONS BY SIMMONS; FACILITY OF PAYMENT

 

Any powers granted
to the Board of Directors of Simmons hereunder may be exercised by a committee, appointed by the Board of Directors of Simmons,
and such committee, if appointed, shall have general responsibility for the administration and interpretation of this Agreement.
If the Board of Directors of Simmons or the committee shall find that any person to whom any amount is or was payable hereunder
is unable to care for his affairs because of illness or accident, or has died, then the Board of Directors of Simmons or the committee,
if it so elects, may direct that any payment due him or his estate (unless a prior claim therefore has been made by a duly appointed
legal representative) or any part thereof be paid or applied for the benefit of such person or to or for the benefit of his spouse,
children or other dependents, an institution maintaining or having custody of such person, any other person deemed by the Board
of Directors of Simmons or committee to be a proper recipient on behalf of such person otherwise entitled to payment, or any of
them, in such manner and proportion as the Board of Directors of Simmons or committee may deem proper. Any such payment shall be
in complete discharge of the liability of Simmons therefor.

 

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ARTICLE 7

SOURCE OF PAYMENTS; NO TRUST

 

The obligations of
Simmons to make payments hereunder shall constitute an unsecured liability of Simmons to the Executive. Such payments shall be
made from the general funds of Simmons, and Simmons shall not be required to establish or maintain any special or separate fund,
or otherwise to segregate assets to assure that such payments shall be made, and neither the Executive nor his designated beneficiary
shall have any interest in any particular asset of Simmons by reason of its obligations hereunder. Nothing contained in this Agreement
shall create or be construed as creating a trust of any kind or any other fiduciary relationship between Simmons and the Executive
or any other person. To the extent that any person acquires a right to receive payments from Simmons hereunder, such right shall
be no greater than the right of an unsecured creditor of Simmons.

 

ARTICLE 8

REDUCTION IN BENEFITS, EXCISE TAX

 

In
the event that the severance and other benefits provided for in this Agreement or otherwise payable to the Executive (a) constitute
"parachute payments" within the meaning of Section 280G of the Code and (b) but for this Article 8, would be
subject to the excise tax imposed by Section 4999 of the Code, then the Executive's payments and benefits will be either:

 

(i)    
delivered in full, or

 

(ii)    
delivered as to such lesser extent which would result in no portion of such severance benefits being subject to excise tax under
Section 4999 of the Code, whichever of the foregoing amounts, taking into account the applicable federal, state and local
income taxes and the excise tax imposed by Section 4999, results in the receipt by the Executive on an after-tax basis, of
the greatest amount of severance benefits, notwithstanding that all or some portion of such severance benefits may be taxable under
Section 4999 of the Code.

 

If
a reduction in severance and other payments and benefits constituting "parachute payments" is necessary so that benefits
are delivered to a lesser extent, reduction will occur in the following order: (I) reduction of cash payments; (II) cancellation
of awards granted "contingent on a change in ownership or control" (within the meaning of Code Section 280G), (III) cancellation
of accelerated vesting of equity awards, and (IV) reduction of employee benefits. In the event that acceleration of vesting
of equity award compensation is to be reduced, such acceleration of vesting will be cancelled in the reverse order of the date
of grant of the Executive's equity awards.

 

Any
determination required under this Article 8 will be made in writing by Simmons’ independent tax accountants engaged by Simmons
for general tax purposes immediately prior to the Change in Control ("Accountants"), whose good faith determination
will be conclusive and binding upon the Executive and Simmons for all purposes. If the tax accounting firm so engaged by Simmons
is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, or if such firm otherwise
cannot perform the calculations, Simmons shall appoint a nationally recognized independent registered public accounting firm to
make the determinations required hereunder. For purposes of making the calculations, the Accountants may make reasonable assumptions
and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application
of Sections 280G and 4999 of the Code. Simmons and the Executive will furnish to the Accountants such information and documents
as the Accountants may reasonably request in order to make a determination under this Section. Simmons will bear all costs the
Accountants may reasonably incur in connection with any calculations contemplated by this Article 8.

 

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ARTICLE 9

SEVERABILITY

 

All agreements and
covenants contained herein are severable, and in the event any of them shall be held to be invalid by any competent court, this
Agreement shall be interpreted as if such invalid agreements or covenants were not contained herein.

 

ARTICLE 10

ASSIGNMENT PROHIBITED

 

This Agreement is personal
to each of the parties hereto, and no party may assign or delegate any of his or its rights or obligations hereunder except as
specified in Article 15. Any attempt to assign any rights or delegate any obligations under this Agreement shall be void.

 

ARTICLE 11

NO ATTACHMENT

 

Except as otherwise
provided in this Agreement or required by applicable law, no right to receive payments under this Agreement shall be subject to
anticipation, commutation, alienation, sale, assignment, encumbrance, charge, pledge or hypothecation or to execution, attachment,
levy, or similar process or assignment by operation of law and any attempt, voluntary or involuntary, to effect any such action
shall be null, void and of no effect.

 

ARTICLE 12

HEADINGS AND INTERPRETATION

 

The headings of articles,
paragraphs and sections herein are included solely for convenience of reference and shall not control the meaning or interpretation
of any of the provisions of this Agreement. References herein to “Simmons” shall refer to both the Company and the
Bank or the Company or the Bank, as the context requires, and the Company and the Bank shall have the option to perform the obligations
provided herein, in their sole discretion, through either entity; provided, however, that for purposes of such obligations and
the rights of Simmons under this Agreement, the Company and Bank shall be treated as one and the same; provided, further, that
this statement shall not be deemed ineffective or construed to have any effect other than the effect expressly stated herein by
reference in this Agreement to both the Company and the Bank, such references included solely to emphasize in certain places the
intent of this statement and the Agreement as a whole. The Executive may enforce his rights against either the Company, the Bank,
or both the Company and the Bank.

 

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ARTICLE 13

GOVERNING LAW

 

The parties intend
that this Agreement and the performance hereunder and all suits and special proceedings hereunder shall be construed in accordance
with and under and pursuant to the laws of the State of Arkansas, and that in any action, special proceeding or other proceeding
that may be brought arising out of, in connection with, or by reason of this Agreement, the laws of the State of Arkansas, shall
be applicable and shall govern to the exclusion of the law of any other forum, without regard to the jurisdiction in which any
action or special proceeding may be instituted.

 

ARTICLE 14

BINDING EFFECT

 

This Agreement shall
be binding upon, and inure to the benefit of, the Executive and his heirs, executors, administrators and legal representatives
and Simmons and its permitted successors and assigns.

 

ARTICLE 15

MERGER OR CONSOLIDATION

 

Simmons shall require
any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company or the Bank (“Successor Corporation”) to assume expressly and agree to
perform this Agreement in the same manner and to the same extent that Simmons would be required to perform it if no such succession
had taken place. Upon such assumption, the Executive and the Successor Corporation shall become obligated to perform the terms
and conditions of this Agreement.

 

ARTICLE 16

ENTIRE AGREEMENT

 

This Agreement expresses
the whole and entire agreement between the parties with reference to the Executive’s change in control-related severance
and, as of the Effective Date, supersedes and replaces any prior employment agreement, understanding or arrangement (whether written
or oral) between Simmons and the Executive on this subject, including the Prior Agreement; provided, however, that, for the avoidance
of doubt, nothing herein shall affect the rights of the Executive and the Company under (a) the Indemnification Agreement dated
as of March 26, 2021 between the Company and the Executive, (b) any Associate Agreement and (c) the terms and conditions associated
with any grant of restricted stock units or other equity award. Each of the parties hereto has relied on his or its own judgment
in entering into this Agreement.

 

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ARTICLE 17

NOTICES

 

All notices, requests
and other communications to any party under this Agreement shall be in writing and shall be given to such party at its address
set forth below or such other address as such party may hereafter specify for the purpose by notice to the other party:

 

	(a) If to the Executive:	 	Steve Massanelli
	 	 	3030 E. Stone Mountain Drive
	 	 	Fayetteville, Arkansas 72701

 

	(b) If to the Company or the Bank:	 	 
	 	 	 
	 	 	Simmons First National Corporation / Simmons Bank
	 	 	Attention: Chairman
	 	 	P. O. Box 7009
	 	 	Pine Bluff, Arkansas 71611

 

Each such notice, request
or other communication shall be effective (i) if given by mail, 72 hours after such communication is deposited in the mail with
first class postage prepaid, addressed as aforesaid or (ii) if given by any other means, when delivered at the address specified
in this Article 17.

 

ARTICLE 18

MODIFICATION OF AGREEMENT

 

No waiver or modification
of this Agreement or of any covenant, condition, or limitation herein contained shall be valid unless in writing and duly executed
by the party to be charged therewith. No evidence of any waiver of modification shall be offered or received in evidence at any
proceeding, arbitration, or litigation between the parties hereto arising out of or affecting this Agreement, or the rights or
obligations of the parties hereunder, unless such waiver or modification is in writing, duly executed as aforesaid. The parties
further agree that the provisions of this Article 18 may not be waived except as herein set forth.

 

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ARTICLE 19

TAXES

 

To the extent required
by applicable law, Simmons shall deduct and withhold all necessary Social Security taxes and all necessary federal and state withholding
taxes and any other similar sums required by laws to be withheld from any payments made pursuant to the terms of this Agreement.
This term shall be construed in conjunction with Article 8 and shall not supersede or modify it in any way.

 

ARTICLE 20

409A COMPLIANCE

 

(a)               
The intent of the parties is that payment and benefits under this Agreement comply with Section 409A of the Internal
Revenue Code of 1986, as amended, and the applicable Treasury regulations and administrative guidance issued thereunder (collectively,
“Section 409A”) or comply with an exemption from the application of Section 409A and, accordingly, all provisions
of this Agreement shall be construed in a manner consistent with the requirements for avoiding taxes or penalties under Section
409A.

 

(b)              
Neither the Executive, the Company, nor the Bank shall take any action to accelerate or delay the payment of any
monies and/or provision of any benefits in any matter which would not be in compliance with Section 409A.

 

(c)               
A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement
providing for the form or timing of payment of any amounts or benefits upon or following a termination of employment unless such
termination is also a “separation from service” (within the meaning of Section 409A) and, for purposes of any such
provision of this Agreement under which (and to the extent) deferred compensation subject to Section 409A is paid, references to
a “termination” or “termination of employment” or like references shall mean separation from service. A
“separation from service” shall not occur under Section 409A unless such Executive has completely severed the Executive’s
relationship with the Company and Bank or the Executive has permanently decreased Executive’s services to twenty percent
(20%) or less of the average level of bona fide services over the immediately preceding thirty-six (36) month period (or the full
period if the Executive has been providing services for less than thirty-six (36) months). A leave of absence shall only trigger
a termination of employment that constitutes a separation from service at the time required under Section 409A.

 

(d)              
Notwithstanding any other provision of this Agreement, the Executive shall be solely liable, and neither the Company
nor the Bank shall be liable in any way to the Executive if any payment or benefit which is to be provided pursuant to this Agreement
and which is considered deferred compensation subject to Section 409A otherwise fails to comply with, or be exempt from, the requirements
of Section 409A.

 

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ARTICLE 21

RECITALS

 

The Recitals to this
Agreement are incorporated herein and shall constitute an integral part of this Agreement.

 

ARTICLE 22

COUNTERPARTS

 

This Agreement shall
become legally binding when the last party hereto executes and delivers this Agreement. This Agreement may be executed and delivered
in multiple counterparts (including by Docusign/Echosign or a similarly accredited secure signature service or other electronic
transmission or signature), each of which when so executed and delivered shall be deemed to be an original, and all of which together
shall constitute one and the same instrument. Counterparts may be delivered by facsimile, e-mail (including .pdf) or other transmission
method and any counterpart so delivered shall be deemed to have been duly and validly delivered and shall be valid and effective
for all purposes.

 

 

 

 

 

 

[Remainder of page intentionally blank.
Signatures on next page]

 

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

 

	EXECUTIVE:	 	 
	 	/s/ Steve Massanelli
	 	Steve Massanelli
	 	 	 
	COMPANY:	SIMMONS FIRST NATIONAL CORPORATION 
	 	 	 
	 	 	 
	 	By: 	/s/
Bob Fehlman
	 	Title: 	SEVP
CFO, COO and Treasurer
	 	 	 
	BANK:	SIMMONS BANK 
	 	 	 
	 	 	 
	 	By: 	/s/Jena Compton
	 	Title: 	EVP
    Chief People and Strategy Officer

 

 

 

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Exhibit A

 

RELEASE

 

In consideration of
the benefits promised in the First Amended and Restated Executive Change in Control Severance Agreement to which this Release is
attached as Exhibit A (and further defined below), Steve Massanelli (the “Executive”), hereby irrevocably
and unconditionally releases, acquits, and forever discharges Simmons First National Corporation (the “Company”)
and Simmons Bank (the “Bank”), and each of their agents, directors, members, shareholders, affiliated entities,
officers, employees, former employees, attorneys, and all persons acting by, through, under or in concert with any of them (collectively
“Releasees”) from any and all charges, complaints, claims, liabilities, grievances, obligations, promises, agreements,
controversies, damages, policies, actions, causes of action, suits, rights, demands, costs, losses, debts and expenses of any nature
whatsoever, known or unknown, suspected or unsuspected, including, but not limited to, any rights arising out of alleged violations
or breaches of any contracts, express or implied, or any tort, or any legal restrictions on Releasees’ right to terminate
employees, or any federal, state or other governmental statute, regulation, law or ordinance, including without limitation, (1)
Title VII of the Civil Rights Act of 1964, as amended by the Civil Rights Act of 1991, (2) the Americans with Disabilities Act,
(3) 42 U.S.C. § 1981, (4) the federal Age Discrimination in Employment Act (age discrimination), (5) the Older Workers Benefit
Protection Act, (6) the Equal Pay Act, (7) the Family and Medical Leave Act, (8) the Employee Retirement Income Security Act, and
(9) the Arkansas Civil Rights Act (“Claim” or “Claims”), which the Executive now has, owns
or holds, or claims to have, own or hold, or which the Executive at any time heretofore had owned or held, or claimed to have owned
or held, against each or any of the Releasees at any time up to and including the date of the execution of this Release.

 

Nothing in this Release
shall restrict or prohibit the Executive or the Executive’s counsel from filing a charge or complaint with, initiating communications
directly with, responding to any inquiry from, volunteering information to, or providing testimony before a self-regulatory authority
or a governmental, law enforcement or other regulatory authority, including the U.S. Equal Employment Opportunity Commission, the
Department of Labor, the National Labor Relations Board, the Department of Justice, the Securities and Exchange Commission, the
Financial Industry Regulatory Authority, the Congress, and any Office of Inspector General (collectively, the “Regulators”),
from participating in any reporting of, investigation into, or proceeding regarding suspected violations of law, or from making
other disclosures that are protected under or from receiving an award for information provided under the whistleblower award programs
administered by a state or federal agency. The Executive does not need the prior authorization of the Company or the Bank to engage
in such communications with the Regulators, respond to such inquiries from the Regulators, provide confidential information or
documents containing confidential information to the Regulators, or make any such reports or disclosures to the Regulators. The
Executive is not required to notify the Company or the Bank that the Executive has engaged in such communications with the Regulators.
The Executive recognizes and agrees that, in connection with any such activity outlined above, the Executive must inform the Regulators
that the information the Executive is providing is confidential. To the extent, that any such charge or complaint is made against
the Releasees, the Executive expressly waives any claim or right to any form of monetary relief or other damages, or any form of
individual recovery or relief in connection with any such charge or complaint, except that the Executive does not waive his right
with respect to any government-issued award for information provided under the whistleblower award programs administered by a state
or federal agency.

     

     

    

In addition, pursuant
to the Defend Trade Secrets Act of 2016, the Executive is notified that an individual will not be held criminally or civilly liable
under any federal or state trade secret law for the disclosure of a trade secret that (i) is made in confidence to a federal, state,
or local government official (directly or indirectly) or to an attorney solely for the purpose of reporting or investigating a
suspected violation of law, or (ii) is made in a complaint or other document filed in a lawsuit or other proceeding, if (and only
if) such filing is made under seal. In addition, an individual who files a lawsuit for retaliation by an employer for reporting
a suspected violation of law may disclose the trade secret to the individual’s attorney and use the trade secret information
in the court proceeding, if the individual files any document containing the trade secret under seal and does not disclose the
trade secret, except pursuant to court order.

 

The Executive hereby
acknowledges and agrees that the execution of this Release and the cessation of the Executive’s employment and all actions
taken in connection therewith are in compliance with the federal Age Discrimination in Employment Act and the Older Workers Benefit
Protection Act and that the releases set forth above shall be applicable, without limitation, to any claims brought under these
Acts. The Executive further acknowledges and agrees that:

 

a.                  
The Release given by the Executive is given solely in exchange for the benefits set forth in the First Amended and Restated
Executive Change in Control Severance Agreement dated as of March 26, 2021 between the Company, the Bank and the Executive to which
this Release was initially attached and such consideration is in addition to anything of value which the Executive was entitled
to receive prior to entering into this Release;

 

b.                 
By entering into this Release, the Executive does not waive any rights the Executive may have to indemnification, including
without limitation indemnification for attorneys’ fees, costs and/or expenses, pursuant to applicable statute,
the articles of incorporation and by-laws of the Company or the Bank or pursuant to the Indemnification Agreement dated as
of March 26, 2021 between the Company and the Executive;

 

c.                  
By entering into this Release, the Executive does not waive rights or claims that may arise after the date this Release
is executed;

 

d.                 
By entering into this Release, and subject to the limitations above, the Executive agrees not to knowingly make any statement
or engage in any conduct which may reasonably be expected to have the effort of disparaging the Company or the Bank to any: (i)
media; (ii) potential, current or former employees; or (iii) third parties. The Executive acknowledges that the Company and the
Bank will be irreparably harmed by a breach of this provision and that there may be no adequate remedy at law;

     

     

    

e.                  
The Executive has been advised to consult an attorney prior to entering into this Release, and this provision of the Release
satisfies the requirements of the Older Workers Benefit Protection Act that the Executive be so advised in writing;

 

f.                   
The Executive has been offered twenty-one (21) days [or 45 days if applicable] from receipt of this Release within which
to consider whether to sign this Release; and

 

g.                 
For a period of seven (7) days following the Executive’s execution of this Release, the Executive may revoke this
Release by delivering the revocation to the Chief People Officer of the Company, and it shall not become effective or enforceable
until such seven (7) day period has expired.

 

This Release shall
be binding upon the heirs and personal representatives of the Executive and shall inure to the benefit of the successors and assigns
of the Company and the Bank.

 

 

 

	 	 	 
	Date ___________	  	 
	 	Steve Massanellijoan-ex42_58.htm

Exhibit 4.2

 

DESCRIPTION OF THE REGISTRANT’S SECURITIES
REGISTERED PURSUANT TO SECTION 12 OF THE
SECURITIES EXCHANGE ACT OF 1934

 

JOANN Inc.’s (the “Company,” “we,” “our,” or “us”)  authorized capital stock consists of 200,000,000 shares of common stock, par value $0.01 per share (“Common Stock”), and 5,000,000 shares of preferred stock, par value $0.01 per share (“Preferred Stock”). We issued all shares of our capital stock in uncertificated form. The following summary description is based on the provisions of our Amended and Restated Certificate of Incorporation (the “Certificate of Incorporation”), our Amended and Restated Bylaws, (the “Bylaws”), and the applicable provisions of the Delaware General Corporation Law (the “DGCL”). This information may not be complete in all respects and is qualified entirely by reference to the provisions of our Certificate of Incorporation and our Bylaws. Our Certificate of Incorporation and our Bylaws are filed as exhibits to our Current Report on Form 8-K filed with the Securities and Exchange Commission on March 19, 2021.

 

Common Stock

 

Our Certificate of Incorporation authorizes a total of 200,000,000 shares of common stock. Holders of our common stock are entitled to one vote for each share held on all matters submitted to a vote of stockholders and do not have cumulative voting rights. An election of directors by our stockholders shall be determined by a plurality of the votes cast by the stockholders entitled to vote on the election. Each other matter presented to the stockholders at a duly called or convened meeting at which a quorum is present shall be decided by the affirmative vote of the holders of a majority of the votes cast (excluding abstentions and broker non-votes) on such matter. Holders of common stock are entitled to receive proportionately any dividends as may be declared by our board of directors, subject to any preferential dividend rights of any series of preferred stock that we may designate and issue in the future.

 

In the event of our liquidation, dissolution, or winding up, the holders of common stock are entitled to receive proportionately our net assets available for distribution to stockholders after the payment in full of all debts and other liabilities and subject to the prior rights of any outstanding preferred stock. Holders of common stock have no preemptive, subscription, redemption or conversion rights. There are no sinking fund provisions applicable to our common stock. The rights, preferences and privileges of holders of common stock are subject to and may be adversely affected by the rights of the holders of shares of any series of preferred stock that we may designate and issue in the future.

 

Preferred Stock

 

Our Certificate of Incorporation authorizes a total of 5,000,000 shares of preferred stock. Under the terms of our Certificate of Incorporation, our board of directors is authorized to direct us to issue shares of preferred stock in one or more series without stockholder approval. Our board of directors has the discretion to determine the rights, preferences, privileges and restrictions, including voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences, of each series of preferred stock.

 

The purpose of authorizing our board of directors to issue preferred stock and determine its rights and preferences is to eliminate delays associated with a stockholder vote on specific issuances. The issuance of preferred stock, while providing flexibility in connection with possible acquisitions, future financings and other corporate purposes, could have the effect of making it more difficult for a third party to acquire, or could discourage a third party from seeking to acquire, a majority of our outstanding voting stock. 

 

Dividends

 

The DGCL permits a corporation to declare and pay dividends out of “surplus” or, if there is no “surplus,” out of its net profits for the fiscal year in which the dividend is declared or the preceding fiscal year. “Surplus” is defined as the excess of the net assets of the corporation over the amount determined to be the capital of the corporation by the board of directors. The capital of the corporation is typically calculated to be (and cannot be less 

 

 

than) the aggregate par value of all issued shares of capital stock. Net assets equal the fair value of the total assets minus total liabilities. The DGCL also provides that dividends may not be paid out of net profits if, after the payment of the dividend, capital is less than the capital represented by the outstanding stock of all classes having a preference upon the distribution of assets.

 

Declaration and payment of any dividend is subject to the discretion of our board of directors. The time and amount of dividends will depend upon our financial condition, operations, cash requirements and availability, debt repayment obligations, capital expenditure needs, restrictions in our debt instruments, industry trends, the provisions of Delaware law affecting the payment of distributions to stockholders and any other factors our board of directors may consider relevant.

 

Any decision to declare and pay dividends in the future is made at the sole discretion of our board of directors and will depend on, among other things, our results of operations, cash requirements, financial condition, contractual restrictions and other factors that our board of directors may deem relevant. Our ability to pay dividends is limited by covenants in our existing indebtedness and may be limited by the agreements governing other indebtedness that we or our subsidiaries incur in the future. In addition, because we are a holding company and have no direct operations, we are only able to pay dividends from funds we receive from our subsidiaries.

 

Authorized but Unissued Shares

 

The authorized but unissued shares of our common stock and our preferred stock are available for future issuance without stockholder approval, subject to any limitations imposed by the listing standards of the Nasdaq Stock Market LLC. These additional shares may be used for a variety of corporate finance transactions, acquisitions and employee benefit plans. The existence of authorized but unissued and unreserved common stock and preferred stock could make more difficult or discourage an attempt to obtain control of us by means of a proxy contest, tender offer, merger or otherwise.

 

Stockholders Agreement

 

We are party to an Amended and Restated Stockholders Agreement, dated March 16, 2021 with several of our stockholders (“Stockholders Agreement”) includes provisions pursuant to which we granted Leonard Green & Partners, L.P., (“LGP”) and certain other stockholders (or such permitted transferee or affiliate) the right to cause us, in certain instances, at our expense, to file registration statements under the Securities Act of 1933, as amended (“Securities Act”) covering resales of our common stock held by such stockholders (or such permitted transferee or affiliate) or to piggyback on such registration statements in certain circumstances. The Stockholders Agreement also requires us to indemnify LGP (or such permitted transferee or affiliate) and its affiliates in connection with any registrations of our securities. In addition, the Stockholders Agreement provides that LGP is entitled to designate individuals to be included in the slate of nominees recommended by our board of directors for election to our board of directors, so as to ensure that the composition of our board of directors and its committees complies with the provisions of the Stockholders Agreement related to the composition of our board of directors and its committees.

 

Registration Rights

 

Subsequent the closing of our initial public offering, the holders of 27,842,386 shares of our common stock, including certain selling stockholders, or their transferees, are entitled to various rights with respect to the registration of these shares under the Securities Act. Registration of these shares under the Securities Act resulted in these shares becoming fully tradable without restriction under the Securities Act immediately upon the effectiveness of the registration, except for shares purchased by affiliates. Shares covered by a registration statement are eligible for sale in the public market upon the expiration or release from the terms of the lock-up agreement.

 

 

 

Exclusive Venue

 

Our Certificate of Incorporation and Bylaws require, to the fullest extent permitted by law, that (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or other employees to us or our stockholders, (iii) any action asserting a claim against us arising pursuant to any provision of the DGCL or our Certificate of Incorporation or our Bylaws, or (iv) any action asserting a claim against us governed by the internal affairs doctrine will have to be brought only in the Court of Chancery in the State of Delaware (or the federal district court for the District of Delaware or other state courts of the State of Delaware if the Court of Chancery in the State of Delaware does not have jurisdiction). The Certificate of Incorporation and Bylaws also require that the federal district courts of the United States of America are the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act; however, there is uncertainty as to whether a court would enforce such provision, and investors cannot waive compliance with federal securities laws and the rules and regulations thereunder. Although we believe these provisions benefit us by providing increased consistency in the application of applicable law in the types of lawsuits to which they apply, the provisions may have the effect of discouraging lawsuits against our directors and officers. These provisions do not apply to any suits brought to enforce any liability or duty created by the Exchange Act or any other claim for which the federal courts of the United States have exclusive jurisdiction.

 

Conflicts of Interest

 

Delaware law permits corporations to adopt provisions renouncing any interest or expectancy in certain opportunities that are presented to the corporation or its officers, directors or stockholders. Our Certificate of Incorporation, to the maximum extent permitted from time to time by Delaware law, renounces any interest or expectancy that we have in, or right to be offered an opportunity to participate in, specified business opportunities that are from time to time presented to our officers, directors or stockholders or their respective affiliates, other than those officers, directors, stockholders or affiliates who are our or our subsidiaries’ employees. Our Certificate of Incorporation provides that, to the fullest extent permitted by law, none of LGP or any of their affiliates or any director who is not employed by us (including any non-employee director who serves as one of our officers in both his director and officer capacities) or his or her affiliates have any duty to refrain from (i) engaging in a corporate opportunity in the same or similar lines of business in which we or our affiliates now engage or propose to engage or (ii) otherwise competing with us or our affiliates. In addition, to the fullest extent permitted by law, in the event that LGP or any non-employee director acquires knowledge of a potential transaction or other business opportunity which may be a corporate opportunity for itself or himself or its or his affiliates or for us or our affiliates, such person has no duty to communicate or offer such transaction or business opportunity to us or any of our affiliates and they may take any such opportunity for themselves or offer it to another person or entity. Our Certificate of Incorporation does not renounce our interest in any business opportunity that is expressly offered to a non-employee director solely in his or her capacity as a director or officer of the Company. To the fullest extent permitted by law, no business opportunity will be deemed to be a potential corporate opportunity for us unless we are permitted, to undertake the opportunity under our Certificate of Incorporation, we have sufficient financial resources to undertake the opportunity and the opportunity is in line with our business.

 

Limitations on Liability and Indemnification of Officers and Directors

 

The DGCL authorizes corporations to limit or eliminate the personal liability of directors to corporations and their stockholders for monetary damages for breaches of directors’ fiduciary duties, subject to certain exceptions. Our Certificate of Incorporation includes a provision that eliminates the personal liability of directors for monetary damages for any breach of fiduciary duty as a director, except to the extent such exemption from liability or limitation thereof is not permitted under the DGCL. The effect of these provisions is to eliminate the rights of us and our stockholders, through stockholders’ derivative suits on our behalf, to recover monetary damages from a director for breach of fiduciary duty as a director, including breaches resulting from grossly negligent behavior. However, exculpation does not apply to any director if the director has breached his or her duty of loyalty, failed to act in good faith, knowingly or intentionally violated the law, authorized illegal dividends or redemptions or derived an improper personal benefit from his or her actions as a director.

 

 

 

Our Bylaws provide that we must indemnify and advance expenses to our directors and officers to the fullest extent authorized by the DGCL. We also are expressly authorized to carry directors’ and officers’ liability insurance providing indemnification for our directors, officers and certain employees for some liabilities. We believe that these indemnification and advancement provisions and insurance are useful to attract and retain qualified directors and executive officers.

 

The limitation of liability, indemnification and advancement provisions in our Certificate of Incorporation and Bylaws may discourage stockholders from bringing a lawsuit against directors for breach of their fiduciary duty. These provisions also may have the effect of reducing the likelihood of derivative litigation against directors and officers, even though such an action, if successful, might otherwise benefit us and our stockholders. In addition, your investment may be adversely affected to the extent we pay the costs of settlement and damage awards against directors and officers pursuant to these indemnification provisions.

 

We currently are party to indemnification agreements with certain of our directors and officers. These agreements require us to indemnify these individuals to the fullest extent permitted under Delaware law against liabilities that may arise by reason of their service to us, and to advance expenses incurred as a result of any proceeding against them as to which they could be indemnified.

 

There is currently no pending material litigation or proceeding involving any of our directors, officers or employees for which indemnification is sought.

 

Anti-Takeover Effects of Provisions of Our Certificate of Incorporation, Our Bylaws and Delaware Law

 

Certain provisions of Delaware law and our Certificate of Incorporation and Bylaws contain provisions that may delay, defer or discourage another party from acquiring control of us. We believe that these provisions, which are summarized below, discourage coercive takeover practices or inadequate takeover bids. These provisions are also designed to encourage persons seeking to acquire control of us to first negotiate with our board of directors, which we believe may result in an improvement of the terms of any such acquisition in favor of our stockholders. However, they also give our board of directors the power to discourage acquisitions that some stockholders may favor.

 

Classified Board of Directors

 

Our Certificate of Incorporation provides that our board of directors is divided into three classes, with each class serving three-year staggered terms. As a result, approximately one-third of our directors are expected to be elected each year. Pursuant to the terms of the Stockholders Agreement, directors designated by LGP may only be removed with or without cause by the request of LGP. In all other cases, our Certificate of Incorporation provides that directors may only be removed from our board of directors for cause by the affirmative vote of at least two-thirds of the voting power of the then outstanding shares of voting stock, following such time as when LGP ceases to own, or no longer has the right to direct the vote of, 50% or more of the voting power of our common stock. Prior to that time, any individual director may be removed with or without cause by the affirmative vote of a majority of the confirmed voting power of our common stock. These provisions may have the effect of deferring, delaying or discouraging hostile takeovers, or changes in control of us or our management. 

Requirements for Advance Notification of Stockholder Meetings, Nominations and Proposals

 

Our Certificate of Incorporation provides that, after the date on which LGP and their affiliates cease to beneficially own, in the aggregate, more than 50% in voting power of our stock entitled to vote generally in the election of directors, special meetings of the stockholders may be called only by the chairman of the board, a resolution adopted by the affirmative vote of the majority of the directors then in office and not by our stockholders or any other person or persons. Our Bylaws prohibit the conduct of any business at a special meeting other than as specified in the notice for such meeting. In addition, any stockholder who wishes to bring business before an annual meeting or nominate directors must comply with the advance notice requirements set forth in our Bylaws. These provisions may have the effect of deferring, delaying or discouraging hostile takeovers or changes in control of us or our management.

 

 

 

Stockholder Action by Written Consent

 

Pursuant to Section 228 of the DGCL, any action required to be taken at any annual or special meeting of the stockholders may be taken without a meeting, without prior notice and without a vote if a consent or consents in writing, setting forth the action so taken, is signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares of our stock entitled to vote thereon were present and voted, unless our Certificate of Incorporation provides otherwise. Our Certificate of Incorporation prohibits stockholder action by written consent (and, thus, requires that all stockholder actions be taken at a meeting of our stockholders), if LGP ceases to own, or no longer has the right to direct the vote of, 50% or more of the voting power of our common stock.

 

Certificate of Incorporation and Bylaws

 

Our Certificate of Incorporation further provides that the affirmative vote of holders of at least two-thirds of the voting power of all of the then outstanding shares of voting stock, voting as a single class, are required to amend certain provisions of our Certificate of Incorporation, including provisions relating to the size of the board, removal of directors, special meetings, actions by written consent and cumulative voting, if LGP ceases to own, or no longer has the right to direct the vote of, 50% or more of the voting power of our common stock. The affirmative vote of holders of at least two-thirds of the voting power of all of the then outstanding shares of voting stock, voting as a single class, are required to amend or repeal our Bylaws, if LGP ceases to own, or no longer has the right to direct the vote of, 50% or more of the voting power of our common stock, although our Bylaws may be amended by a simple majority vote of our board of directors.

 

Business Combinations

 

We have opted out of Section 203 of the DGCL, which prohibits persons deemed to be “interested stockholders” from engaging in a “business combination” with a publicly held Delaware corporation for three years following the date these persons become interested stockholders unless the business combination is, or the transaction in which the person became an interested stockholder was, approved in a prescribed manner or another prescribed exception applies.

 

Stock Exchange Listing

 

Our common stock is listed on Nasdaq Global Market under the symbol “JOAN.”

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