-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SqlP6JRLiG2+0F5MzK+450hHPWNNzjvkFa3Is6Z0XxSjLjm4w2iULR02hqzG9/Mh CPVX2g28+/dn7xHfSX4h0g== 0000950144-99-005186.txt : 19990503 0000950144-99-005186.hdr.sgml : 19990503 ACCESSION NUMBER: 0000950144-99-005186 CONFORMED SUBMISSION TYPE: S-3/A PUBLIC DOCUMENT COUNT: 10 FILED AS OF DATE: 19990430 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALEXANDERS J CORP CENTRAL INDEX KEY: 0000103884 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-EATING PLACES [5812] IRS NUMBER: 620854056 STATE OF INCORPORATION: TN FISCAL YEAR END: 0103 FILING VALUES: FORM TYPE: S-3/A SEC ACT: SEC FILE NUMBER: 333-74849 FILM NUMBER: 99607957 BUSINESS ADDRESS: STREET 1: 3401 WEST END AVE STREET 2: P O BOX 24300 CITY: NASHVILLE STATE: TN ZIP: 37202 BUSINESS PHONE: 6152691900 MAIL ADDRESS: STREET 1: 3401 WEST END AVE STREET 2: SUITE 260 CITY: NASHVILLE STATE: TN ZIP: 37202 FORMER COMPANY: FORMER CONFORMED NAME: VOLUNTEER CAPITAL CORP / TN / DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: WINNERS CORP DATE OF NAME CHANGE: 19890910 FORMER COMPANY: FORMER CONFORMED NAME: VOLUNTEER CAPITAL CORP DATE OF NAME CHANGE: 19820520 S-3/A 1 J. ALEXANDERS CORPORATION 1 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 30, 1999 REGISTRATION NO. 333-74849 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 --------------------- AMENDMENT NO. 1 TO FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 J. ALEXANDER'S CORPORATION (Exact name of registrant as specified in its charter) TENNESSEE 5812 62-0854056 (State or other (Primary Standard (I.R.S. Employer jurisdiction of Industrial incorporation or Classification Code Identification No.) organization) No.)
P.O. BOX 24300 R. GREGORY LEWIS 3401 WEST END AVENUE P.O. BOX 24300 NASHVILLE, TENNESSEE 37203 3401 WEST END AVENUE (615) 269-1900 NASHVILLE, TENNESSEE 37203 (Address, including zip code, and (615) 269-1900) telephone number, including (Name, address, including zip code, area code, of registrant's and telephone number, including principal executive offices) area code, of agent for service)
--------------------- COPY TO: F. MITCHELL WALKER, JR. BASS, BERRY & SIMS PLC 2700 FIRST AMERICAN CENTER NASHVILLE, TENNESSEE 37238 (615) 742-6200 APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as practicable after effectiveness of the Registration Statement. If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. [ ] If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. [X] If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [ ] --------------------- CALCULATION OF REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------------------- PROPOSED PROPOSED TITLE OF EACH CLASS AMOUNT MAXIMUM MAXIMUM AMOUNT OF OF SECURITIES TO BE OFFERING PRICE AGGREGATE REGISTRATION TO BE REGISTERED REGISTERED PER SHARE OFFERING PRICE FEE(2) - ------------------------------------------------------------------------------------------------------------------------------- Common Stock, $.05 par value per share(1).... 1,089,067 $3.75 $4,084,001 $1,136 - ------------------------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------------------------
(1) Maximum number of shares of J. Alexander's Corporation's common stock to be sold to holders of common stock in this rights offering. Common stock includes associated rights to purchase Series A Junior Preferred Stock, no par value, which are issued for no additional consideration; no additional registration fee is required. (2) J. Alexander's paid a registration fee of $1,133 at the time of the initial filing of this Registration Statement. This Amendment No. 1 registers an additional 2,800 shares of common stock. The Company has paid an additional registration fee of $3.00 in connection with these additional shares. --------------------- THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933, AS AMENDED OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 2 1,089,067 Shares of Common Stock J. ALEXANDER'S CORPORATION Subscription Price $3.75 Per Share ------------------------- J. Alexander's is distributing non-transferable rights to owners of shares of J. Alexander's common stock. During this rights offering, J. Alexander's will issue up to 5,445,335 rights to purchase shares and up to 1,089,067 shares of common stock.
NET PROCEEDS TO SUBSCRIPTION PRICE J. ALEXANDER'S(1) ------------------ ------------------- Per Share............ $ 3.75 $ 3.75 Total.............. $4,084,001 $4,084,001
(1) Before deducting expenses payable by J. Alexander's, estimated to be $150,000. THE EXERCISE OF THE RIGHTS INVOLVES SUBSTANTIAL RISK. YOU SHOULD REFER TO THE DISCUSSION OF MATERIAL RISK FACTORS BEGINNING ON PAGE 2 OF THIS PROSPECTUS. You will receive 1.0 right for each share of common stock that you own at the close of business on May , 1999. Each right entitles you to purchase 0.2 share of common stock, rounding up any remaining fractional share to the next whole number of shares, for $3.75 per share. To participate in this rights offering, you must exercise your rights by 5:00 pm, Central Daylight Time on , 1999. Shares of J. Alexander's common stock are currently traded on the New York Stock Exchange under the symbol "JAX." The rights may not be transferred and will not trade on any exchange or market. On April 29, 1999, the closing price of a share of the common stock on the NYSE was $4.31. NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. The date of this prospectus is , 1999 THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. J. ALEXANDER'S MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL, AND IT IS NOT SOLICITING AN OFFER TO BUY, THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED. 3 TABLE OF CONTENTS
PAGE ---- Prospectus Summary.................... 1 Risk Factors.......................... 2 J. Alexander's May Need Additional Capital Even After the Sale to Solidus and the Rights Offering......................... 2 J. Alexander's Credit Facility or Satisfactory Alternative Financing May Not be Available After July 1, 2000............... 2 If J. Alexander's Loses or is Not Able to Hire Key Personnel, Its Operations Could Suffer.......... 3 If We Are Not in Compliance With the New York Stock Exchange's Share- holder Voting, Market Capitalization or Operating Result Requirements, We May Be Delisted......................... 3 Certain Anti-takeover Provisions May Affect Your Rights as a Shareholder...................... 3 Significant Ownership Positions May Affect Your Rights as a Shareholder...................... 4 Provisions of Tennessee Law Applicable to J. Alexander's May Discourage Third Party Attempts to Acquire Control............... 4 J. Alexander's Does Not Anticipate Paying Dividends on Common Stock............................ 4 J. Alexander's Stock Price Has Been and May Continue to Be Volatile, and May Be Less than $3.75 Per Share............................ 4 J. Alexander's Faces Challenges in Opening New Restaurants.......... 5
PAGE ---- Intense Competition Could Damage Profitability.................... 5 J. Alexander's May Experience Fluctuations in Quarterly Results Because of Timing of Restaurant Openings and Fluctuations in Costs............................ 5 Government Regulation and Licensing May Delay New Restaurant Openings or Affect Operations............. 5 J. Alexander's May Encounter Problems With Year 2000 Compliance....................... 6 A Warning About Forward-Looking Statements.......................... 6 If You Do Not Exercise Your Rights, Your Ownership Interest May Be Diluted............................. 7 J. Alexander's........................ 7 Recent Developments................... 8 Use of Proceeds....................... 9 Capitalization........................ 10 The Rights Offering................... 11 If You Have Questions................. 16 Plan of Distribution.................. 16 Federal Income Tax Considerations..... 16 Tax Consequences to Shareholders.... 17 Taxation of J. Alexander's.......... 19 Legal Matters......................... 19 Experts............................... 19 If You Would Like Additional Information......................... 19 Questions and Answers About the Rights Offering............................ 21
i 4 PROSPECTUS SUMMARY The information in this section is a summary and does not contain all of the information that you should consider before exercising your rights. You should read the entire prospectus carefully, including the "Risk Factors" section, which details the risks involved in the exercise of rights and the ownership of our common stock, and the documents listed under "If You Would Like Additional Information." J. ALEXANDER'S CORPORATION J. Alexander's Corporation operates 20 J. Alexander's full-service, casual dining restaurants located in Tennessee, Ohio, Florida, Kansas, Alabama, Michigan, Illinois, Colorado, Texas, Kentucky and Louisiana. J. Alexander's is a traditional restaurant with an American menu that features prime rib of beef; hardwood-grilled steaks, seafood and chicken; pasta; salads and soups; assorted sandwiches, appetizers and desserts; and a full-service bar. J. Alexander's corporate offices are located at 3401 West End Avenue, P.O. Box 24300, Nashville, Tennessee 37202, telephone (615) 269-1900. THE RIGHTS OFFERING In this rights offering, J. Alexander's will distribute to you 1.0 right to purchase common stock for each share of common stock that you own at the close of business on May , 1999. For every right you receive, you will be entitled to purchase 0.2 share of common stock, rounding up any remaining fractional share to the nearest whole number of shares, for $3.75 per share. You can "exercise" rights to purchase the shares of common stock by following the instructions in this prospectus. You may exercise any number of your rights, or you may choose not to exercise any rights. USE OF PROCEEDS J. Alexander's gross proceeds from the rights offering depend on the number of shares of common stock that are purchased when shareholders exercise rights. If J. Alexander's sells all 1,089,067 shares offered by this Prospectus, then J. Alexander's will receive proceeds of $4,084,001 from the rights offering before payment of estimated offering expenses of $150,000. J. Alexander's will use the proceeds from the rights offering to repay a portion of the debt under its revolving credit facility. FINANCING PLAN The rights offering is part of a financing plan to raise equity capital to repay some of J. Alexander's outstanding debt. J. Alexander's believes that this will benefit J. Alexander's by reducing its debt-to-equity ratio and reducing its interest expense, which will improve earnings. J. Alexander's believes that accomplishing these objectives will improve its financial condition and may allow it to negotiate improved terms for its credit facilities, including interest rates and availability. The other part of J. Alexander's financing plan is the sale of $4.1 million of common stock to Solidus, LLC, a Tennessee limited liability company, whose principal owners are Dr. John Morris and members of his family. E. Townes Duncan, a director of J. Alexander's, is also an owner of and manages the investments of Solidus. J. Alexander's received $4,073,498 for the sale of 1,086,266 shares of common stock to Solidus on March 22, 1999. J. Alexander's completed the sale of common stock to Solidus before the rights offering to provide J. Alexander's with additional equity on favorable terms and more quickly than would have been possible through the rights offering, and to ensure that J. Alexander's obtained the minimum amount of new equity capital which it believed it needed to effectively carry out its long-term business plan. Because Solidus purchased these shares before the rights offering, Solidus agreed that it will not exercise any rights attributable to the 1,086,266 additional shares it purchased. In addition, Solidus agreed not to purchase or obtain additional shares in excess of 33% of the Company's outstanding common stock and also agreed not to sell any of its common stock for a period of seven years. 1 5 RISK FACTORS As you decide whether to exercise your rights, and when you evaluate J. Alexander's performance and the forward-looking statements in this prospectus, you should carefully consider the following risk factors, as well as the other information contained in this prospectus. J. ALEXANDER'S MAY NEED ADDITIONAL CAPITAL EVEN AFTER THE SALE TO SOLIDUS AND THE RIGHTS OFFERING J. Alexander's ability to conduct its business depends to a significant degree on its ability to incur indebtedness and obtain equity capital. J. Alexander's needs financing primarily to fund its development of new restaurants. To meet these needs, J. Alexander's currently uses cash from operations and borrowings under a revolving credit facility. The sale to Solidus and the rights offering are intended to raise additional capital for J. Alexander's. Even after the completion of the sale to Solidus and the rights offering, however, J. Alexander's may need additional capital to meet its capital requirements. J. Alexander's cannot assure you that such capital will be available on satisfactory terms. If all of the rights are not exercised, or if J. Alexander's fails to reach sufficient cash flows, J. Alexander's will require additional debt or equity. J. Alexander's existing credit facility requires J. Alexander's to maintain certain financial ratios and also prohibits new borrowing other than under the revolving credit facility. Through the sale to Solidus and the rights offering, its existing credit facility and cash flow from operations, J. Alexander's believes that it will have access to sufficient funds to carry on its existing level of business and develop additional restaurants. J. ALEXANDER'S CREDIT FACILITY OR SATISFACTORY ALTERNATIVE FINANCING MAY NOT BE AVAILABLE AFTER JULY 1, 2000 J. Alexander's cannot assure you that its existing credit facility will remain available past July 1, 2000, and J. Alexander's cannot assure you that it will be successful in consummating any future financing transactions on satisfactory terms. If the credit facility is not available after July 1, 2000, J. Alexander's would be forced to seek alternative financing for its debt, whether through the sale of additional equity, issuance of debt securities or a new credit facility, which may be on less favorable terms, including increased interest rates. Costs incurred for future financing transactions, such as increased interest expense, could have an adverse effect on J. Alexander's results of operations and could result in delays of new restaurant openings. Factors which could affect J. Alexander's access to the capital markets, or the costs of such capital, include: - changes in interest rates, - general economic conditions, and - investors' perceptions of J. Alexander's business, results of operations, leverage, financial condition and business prospects. Economic, financial, competitive and other matters strongly influence each of these factors, and J. Alexander's may not be able to control those influences. 2 6 In addition, covenants under J. Alexander's existing or future debt securities and credit facilities may significantly restrict J. Alexander's ability to incur additional indebtedness or to issue preferred stock. IF J. ALEXANDER'S LOSES OR IS NOT ABLE TO HIRE KEY PERSONNEL, ITS OPERATIONS COULD SUFFER J. Alexander's depends on the efforts and abilities of a number of its current key management personnel, including Lonnie J. Stout II, its President and Chief Executive Officer. The success of J. Alexander's depends to a large extent on its ability to retain and continue to attract key employees through its compensation plans, including employee stock options. If J. Alexander's loses certain key employees or cannot retain or attract key employees in the future, J. Alexander's operations could be adversely affected. IF WE ARE NOT IN COMPLIANCE WITH THE NEW YORK STOCK EXCHANGE'S SHAREHOLDER VOTING, MARKET CAPITALIZATION OR OPERATING RESULT REQUIREMENTS, WE MAY BE DELISTED It is possible that the New York Stock Exchange may assert that shareholder approval for J. Alexander's recent sale of common stock to Solidus or for the rights offering is required under its guidelines or that J. Alexander's is otherwise not in compliance with New York Stock Exchange requirements relating to market capitalization or operating results. It is possible that the New York Stock Exchange may consider whether to delist J. Alexander's common stock. If the New York Stock Exchange delists J. Alexander's common stock, J. Alexander's would apply for listing of the common stock for trading on The Nasdaq Stock Market's National Market or Small Cap Market. If the common stock was not listed on an exchange or a national market, shareholders would be able to trade common stock only in negotiated private transactions. This would significantly impair their liquidity and could adversely affect the price of the common stock. The New York Stock Exchange has authorized listing of the shares to be sold in the rights offering and the shares sold to Solidus, subject to notice of issuance. CERTAIN ANTI-TAKEOVER PROVISIONS MAY AFFECT YOUR RIGHTS AS A SHAREHOLDER J. Alexander's Board of Directors has the authority to issue up to 1,000,000 shares of preferred stock and to determine the price, rights, preferences and privileges of those shares without any further vote of, or action by, J. Alexander's shareholders. Your rights will be subject to, and may be adversely affected by, the rights of holders of preferred stock. If J. Alexander's chooses to issue preferred stock with voting rights, the issuance could provide desirable flexibility in connection with possible acquisitions and other corporate purposes. In addition, J. Alexander's has in effect a shareholder rights plan, which is intended to encourage third parties interested in acquiring J. Alexander's to negotiate with the Board of Directors. Under the shareholder rights plan, shares of common stock have attached Series A Junior Preferred Stock purchase rights, which may be exercised if a person or group (other than Solidus and its affiliates) acquires 20% of the outstanding common stock or if a person or group initiates a tender or exchange offer that would result in such person or group acquiring 10% or more of the outstanding common stock. Because a potential acquiror must negotiate with the Board of Directors in order to avoid triggering the preferred stock purchase rights, the existence of the shareholder rights plan could discourage a takeover attempt or have a depressive effect on the price of the common stock. 3 7 SIGNIFICANT OWNERSHIP POSITIONS MAY AFFECT YOUR RIGHTS AS A SHAREHOLDER Solidus currently owns approximately 24% of the outstanding common stock. In the future, Solidus' vote of its common stock will have a significant impact on the outcome of any matters that are determined by a majority vote of J. Alexander's shareholders. In addition, the ownership of a significant percentage of the common stock by a single shareholder, such as Solidus, could make it more difficult for a third party to acquire control of J. Alexander's. PROVISIONS OF TENNESSEE LAW APPLICABLE TO J. ALEXANDER'S MAY DISCOURAGE THIRD-PARTY ATTEMPTS TO ACQUIRE CONTROL The Tennessee Business Combination Act provides that generally, any party owning more than 10% of the stock in a publicly held Tennessee corporation cannot engage in a business combination with the corporation unless the combination takes place at least five years after the shareholder first acquired a 10% interest and either is approved by at least two-thirds of the noninterested voting shares of the corporation or satisfies certain fairness conditions. Tennessee's Investor Protection Act, in addition to prohibiting fraudulent, deceptive, or manipulative practices by any party in connection with a tender offer, requires a party making a tender offer directed at certain Tennessee corporations to file a registration statement with the Commissioner of Insurance. The Investor Protection Act also requires both the offeror and the offeree corporation to deliver all solicitation materials used in connection with the tender offer to the Commissioner. These provisions of Tennessee law could make it more difficult for a third party to acquire control of J. Alexander's and therefore could have a depressive effect on the price of the common stock. J. ALEXANDER'S DOES NOT ANTICIPATE PAYING DIVIDENDS ON COMMON STOCK J. Alexander's does not plan to pay cash dividends on its common stock in the foreseeable future. The Board of Directors will decide, in the exercise of its business judgment, whether to apply legally available funds to the payment of dividends. The Board of Directors will consider J. Alexander's results of operations and financial condition, any existing or proposed commitments for the use of available funds, and J. Alexander's obligations to its creditors or holders of preferred stock, if any preferred stock is issued. Financial covenants in J. Alexander's future credit agreements may restrict J. Alexander's ability to pay dividends. J. ALEXANDER'S STOCK PRICE HAS BEEN AND MAY CONTINUE TO BE VOLATILE, AND MAY BE LESS THAN $3.75 PER SHARE J. Alexander's cannot predict whether a shareholder will be able to sell common stock purchased in this rights offering for a price that equals or exceeds the subscription price of $3.75 per share. Trading volume and prices for the common stock have been subject to wide fluctuations during the past year and may continue to fluctuate in response to quarterly variations in operating results, announced earnings and other factors. J. Alexander's cannot foresee or predict such events. The market price of J. Alexander's common stock could also be influenced by developments or matters not related to J. Alexander's, including the sale or attempted sale of a large amount of J. Alexander's common stock on the open market by a shareholder. A shareholder is not permitted to revoke the exercise of a right, even if the market price of the common stock falls prior to the closing of this rights offering. 4 8 J. ALEXANDER'S FACES CHALLENGES IN OPENING NEW RESTAURANTS It has been J. Alexander's experience that new restaurants generally generate operating losses in the initial months following opening while they build sales levels to maturity. J. Alexander's currently operates twenty J. Alexander's restaurants, of which six have been open for less than two years. Because of J. Alexander's relatively small restaurant base, an unsuccessful new restaurant could have a more adverse effect on our results of operations than would be the case in a restaurant company with a greater number of restaurants. J. Alexander's continued growth depends on its ability to open new restaurants and to operate them profitably, which will depend on a number of factors, including: - the selection and availability of suitable locations, - the hiring and training of sufficiently skilled management and other personnel and - other factors, some of which are beyond the control of J. Alexander's. INTENSE COMPETITION COULD DAMAGE PROFITABILITY The restaurant industry is intensely competitive with respect to price, service, location and food quality, and there are many well-established competitors with substantially greater financial and other resources than J. Alexander's. Some of J. Alexander's competitors have been in existence for a substantially longer period than J. Alexander's and may be better established in markets where J. Alexander's restaurants are or may be located. The restaurant business is often affected by changes in consumer tastes, national, regional or local economic conditions, demographic trends, traffic patterns and the type, number and location of competing restaurants. J. ALEXANDER'S MAY EXPERIENCE FLUCTUATIONS IN QUARTERLY RESULTS BECAUSE OF TIMING OF RESTAURANT OPENINGS AND FLUCTUATIONS IN COSTS J. Alexander's quarterly results of operations are affected by timing of the opening of new J. Alexander's restaurants, and fluctuations in the cost of food, labor, employee benefits, and similar costs over which J. Alexander's has limited or no control. J. Alexander's business may also be affected by inflation, which could have the effect of increasing J. Alexander's costs for food, labor, employee benefits, and other routine expenditures. In the past, management has attempted to anticipate and avoid material adverse effects on J. Alexander's profitability from increasing costs through its purchasing practices and menu price adjustments, but there can be no assurance that it will be able to do so in the future. Fluctuations in quarterly results may have a negative impact on the stock price. GOVERNMENT REGULATION AND LICENSING MAY DELAY NEW RESTAURANT OPENINGS OR AFFECT OPERATIONS The restaurant industry is subject to extensive state and local government regulation relating to the sale of food and alcoholic beverages, and sanitation, fire and building codes. Termination of the liquor license for any J. Alexander's restaurant would adversely affect the revenues for the restaurant. Restaurant operating costs are also affected by other government actions that are beyond J. Alexander's control, which may include increases in the minimum hourly wage requirements, workers' compensation insurance rates and unemployment and other taxes. If J. Alexander's experiences difficulties in obtaining or fails to obtain required licensing or other regulatory approvals, this delay or failure could delay or prevent the opening of a new J. Alexander's restaurant. The suspension of, or 5 9 inability to renew, a license could interrupt operations at an existing restaurant, and the inability to retain or renew such licenses would adversely affect the operations of the new restaurants. J. ALEXANDER'S MAY ENCOUNTER PROBLEMS WITH YEAR 2000 COMPLIANCE The term "Year 2000" is a general term used to describe the various problems that may result from the improper processing of dates and date-sensitive calculations by computers and other machinery as the year 2000 is approached and reached. J. Alexander's key financial, informational and operational systems have been assessed for Year 2000 compliance, and detailed plans have been developed to address system modifications required by September 30, 1999. These systems include information technology systems ("IT"). J. Alexander's has assessed its major IT vendors and technology providers and is in the process of testing its systems to determine Year 2000 compliance. Generally, J. Alexander's information systems are not interfaced with third parties and are relatively new systems based on personal computer, rather than mainframe, technology. J. Alexander's is also in the process of assessing its non-IT systems that utilize embedded technology, such as microcontrollers, and reviewing them for Year 2000 compliance. Based on completion of the assessment phase of J. Alexander's Year 2000 Plan, management believes that all of J. Alexander's systems are or, with scheduled updates, will be Year 2000 compliant. Overall, J. Alexander's estimates that its Year 2000 readiness initiatives are approximately 50% complete. Because J. Alexander's testing phase is not yet substantially in process, and accordingly it has not fully assessed its risk from potential Year 2000 failures, J. Alexander's has not yet developed detailed contingency plans specific to Year 2000 events for any specific area of business. To operate its business, J. Alexander's relies upon government agencies, utility companies, providers of telecommunication services, suppliers, and other third party service providers ("Material Relationships"), over which it can assert little control. J. Alexander's ability to conduct its core business is dependent upon the ability of these Material Relationships to rectify their Year 2000 issues to the extent they affect J. Alexander's. If the telecommunications carriers, public utilities and other Material Relationships do not appropriately rectify their Year 2000 issues, J. Alexander's ability to conduct its core business may be materially impacted, which could result in a material adverse effect on J. Alexander's financial condition. To date, J. Alexander's has concentrated primarily on the identification of Material Relationships which are most critical to J. Alexander's operations. J. Alexander's plans to query certain of its Material Relationships in order to obtain information prior to June 30, 1999 which will allow J. Alexander's to further assess its risks and assist in the development of contingency plans. J. Alexander's is unable to estimate the costs that it may incur as a result of Year 2000 problems suffered by the parties with which it deals, such as Material Relationships, and there can be no assurance that J. Alexander's will successfully address the Year 2000 problems present in its own systems. Year 2000 problems in J. Alexander's systems or those of its Material Relationships could cause J. Alexander's to be unable to keep its restaurants open in the initial days or weeks after January 1, 2000, which could result in a material adverse effect on J. Alexander's financial condition. A WARNING ABOUT FORWARD-LOOKING STATEMENTS This prospectus may contain "forward-looking statements." Any statement in this prospectus, other than a statement of historical fact, may be a forward-looking statement. 6 10 J. Alexander's believes forward-looking statements can generally be identified by looking for words such as "may," "will," "expect," "intend," "estimate," "anticipate," "believe" or "continue." Variations on those or similar words, or the negatives of such words, also may indicate forward-looking statements. Although J. Alexander's believes that the expectations reflected in this prospectus are reasonable, J. Alexander's cannot assure you that its expectations will be correct. Factors which could affect actual results include, but are not limited to, J. Alexander's ability to increase sales in its restaurants; J. Alexander's ability to recruit and train qualified restaurant management personnel; intense competition within the casual dining industry; changes in business and economic conditions; changes in consumer tastes; and government regulations. J. Alexander's has included a discussion entitled "Risk Factors" in this prospectus, disclosing other important factors that could cause its actual results to differ materially from its expectations. If in the future you hear or read any forward-looking statements concerning J. Alexander's, you should refer back to these Risk Factors. J. Alexander's believes that if our expectations change, or if new events, conditions or circumstances arise, we are not required to, and may not, update or revise any forward-looking statement in this prospectus. IF YOU DO NOT EXERCISE YOUR RIGHTS, YOUR OWNERSHIP INTEREST MAY BE DILUTED If you do not exercise all of your rights, you may suffer significant dilution of your percentage ownership in J. Alexander's relative to shareholders who exercise their rights. Immediately after the rights offering, the net tangible book value per share of common stock will decrease. The chart below illustrates the potential dilution that could result immediately after the closing of the rights offering if a shareholder who owns 100,000 shares of common stock fails to exercise its rights, and other shareholders purchase all 1,069,067 remaining shares of common stock sold in the rights offering.
AFTER THE RIGHTS AFTER THE RIGHTS OFFERING OFFERING ASSUMING ASSUMING BEFORE THE SHAREHOLDER SHAREHOLDER RIGHTS EXERCISES EXERCISES NO OFFERING ALL RIGHTS RIGHTS ---------- ----------- ---------------- Shares Owned by Shareholder................. 100,000 120,000 100,000 Total Number of Common Shares Outstanding... 6,531,601 7,620,668 7,600,668 Shareholder's Percentage Ownership.......... 1.53% 1.57% 1.32%
J. ALEXANDER'S J. Alexander's operates 20 J. Alexander's full-service, casual dining restaurants located in Tennessee, Ohio, Florida, Kansas, Alabama, Michigan, Illinois, Colorado, Texas, Kentucky and Louisiana. J. Alexander's is a traditional restaurant with an American menu that features prime rib of beef; hardwood-grilled steaks, seafood and chicken; pasta; salads and soups; assorted sandwiches, appetizers and desserts; and a full-service bar. Management believes quality food, outstanding service and value are critical to the success of J. Alexander's. 7 11 RECENT DEVELOPMENTS FIRST QUARTER RESULTS On April 26, 1999, J. Alexander's reported operating results for the first quarter of 1999, with higher operating income and same store sales. For the first quarter of 1999, J. Alexander's had average weekly same store sales of $76,900, increasing by 3.8% over $74,100 posted for the first quarter of 1998. Net sales for the quarter rose 9.7% to $19,208,000 from $17,512,000. J. Alexander's reported net income of $244,000, or $.04 per share, for the first quarter of 1999, up from a loss of $1,104,000, or $.20 per share, in the first quarter of 1998. First quarter results of 1999 included a pre-tax gain of $90,000 related to the repurchase of a portion of J. Alexander's convertible debentures. These results are set out in the chart below.
FIRST QUARTER 1999 1998 ------------- ----------- ----------- Average Weekly Same Store Sales............. $ 76,900 $ 74,100 Net Sales................................... 19,208,000 17,512,000 Net Income.................................. 244,000 (1,104,000) Net Income Per Share........................ .04 .20
For 1999, J. Alexander's has plans to open a restaurant in West Bloomfield, Michigan, and is finalizing its plans for a restaurant in Cincinnati, Ohio, with construction expected to start in the fall of 1999. RECENT CONTINGENT PROPOSAL BY O'CHARLEY'S, INC. In April 1999, O'Charley's, Inc. proposed to the Board of Directors of J. Alexander's that the two companies discuss a business combination in which O'Charley's would consider paying an unspecified combination of cash and O'Charley's stock designed to be valued at $5.50 per share of J. Alexander's common stock. The proposal was conditioned on Solidus' agreeing to sell its 1,086,266 shares of J. Alexander's stock purchased on March 22, 1999 to O'Charley's at $3.75 per share. The proposal was also conditioned on J. Alexander's canceling this rights offering. The Board of Directors of J. Alexander's declined to pursue discussions with O'Charley's because J. Alexander's Board of Directors and management believe that it is in the best interest of J. Alexander's and its shareholders to continue to execute its strategic business plan as an independent public company. SALE OF COMMON STOCK TO SOLIDUS On March 22, 1999, Solidus purchased 1,086,266 additional shares of common stock for approximately $4.1 million. In addition, Solidus agreed to the following: - for a period of seven years, Solidus would not acquire or hold more than 33% of J. Alexander's common stock. - for a period of seven years, Solidus would not solicit proxies for a vote of the shareholders of J. Alexander's. 8 12 - for a period of seven years, Solidus would not sell J. Alexander's common stock it owns and would only transfer common stock to J. Alexander's, a person, entity or group approved by J. Alexander's or to an affiliate of Solidus. - the above restrictions on Solidus' ownership and ability to solicit proxies would terminate in the event of certain tender offers or exchange offers, a notice filing with the Department of Justice relating to the acquisition of more than 15% of the outstanding voting securities or with the SEC relating to the acquisition of more than 10% of the outstanding common stock, J. Alexander's proposing or approving a merger or other business combination, or a change to a majority of J. Alexander's Board of Directors over a two-year period. - Solidus would not exercise rights during this rights offering attributable to the 1,086,266 additional shares of common stock purchased on March 22, 1999. USE OF PROCEEDS J. Alexander's will apply its net proceeds from the rights offering to repay a portion of the debt under its revolving credit facility. Amounts repaid will continue to be available for reborrowing. Borrowings under the revolving credit facility bear interest at a rate equal to LIBOR plus a spread of two to three percent, depending on the ratio of J. Alexander's senior debt to EBITDA (earnings before interest, taxes, depreciation and amortization). The facility matures, unless J. Alexander's elects to convert outstanding borrowings to a term loan, on July 1, 2000. After applying the proceeds from the sale of 1,086,266 additional shares of common stock to Solidus, the principal amount outstanding as of April 29, 1999 under the revolving credit facility was $5.8 million. Borrowings under the credit facility were incurred to finance development of J. Alexander's restaurants. Assuming that shareholders exercise the rights to purchase 1,089,067 shares of common stock, J. Alexander's will receive net proceeds from this rights offering of approximately $3.9 million after payment of approximately $150,000 in offering expenses. 9 13 CAPITALIZATION The following table sets forth the short-term indebtedness and the capitalization of J. Alexander's, on an historical basis as of January 3, 1999, and on a pro forma basis as of January 3, 1999, based on completion of the Solidus purchase. The net proceeds from the sale to Solidus on March 22, 1999 were applied as set forth above in Use of Proceeds.
JANUARY 3, 1999 ------------------ AS ACTUAL ADJUSTED ------- -------- (IN THOUSANDS) Current portion of long-term debt:.......................... $ 1,917 $ 1,917 ======= ======= LONG-TERM DEBT: Long-term debt and obligations under capital leases, less current maturities........................................ $21,361 $17,288 ------- ------- STOCKHOLDERS' EQUITY: Common stock, $0.05 par value; 10,000,000 shares authorized; 5,431,335 issued and outstanding; 6,517,601 outstanding, as adjusted(1)............................................ 272 326 Preferred stock, no par value; authorized 1,000,000 shares; none issued............................................... -- -- Additional paid in capital.................................. 30,007 34,026 Retained earnings........................................... 4,272 4,272 ------- ------- 34,551 38,624 Note receivable -- Employee Stock Ownership Plan(2)......... (820) (820) ------- ------- Total stockholders' equity................................ 33,731 37,804 ------- ------- Total capitalization................................... $55,092 $55,092 ======= =======
- ------------------------- (1) Does not include 678,820 shares of common stock reserved for issuance upon the exercise of options granted pursuant to J. Alexander's existing stock option plans and 774,648 shares of common stock reserved for issuance upon conversion of J. Alexander's Convertible Subordinated Debentures due 2003. (2) During 1992, J. Alexander's established an Employee Stock Ownership Plan ("ESOP"), which purchased 457,055 shares of common stock for an aggregate purchase price of $1,714,000. J. Alexander's funded the ESOP by loaning it an amount equal to the purchase price. The loan is secured by a pledge of the unallocated stock held by the ESOP. J. Alexander's has made a contribution to the ESOP each year since the ESOP was established allowing the ESOP to make its scheduled loan repayments to J. Alexander's, with the exception of 1996 when no contribution was made. The terms of the ESOP note, as amended in 1997, call for interest to be paid at an annual rate of 10% and for repayment of the ESOP note's remaining principal in annual amounts ranging from $135,000 to $197,000 over the period 1999 through 2003. 10 14 THE RIGHTS OFFERING THE RIGHTS J. Alexander's is distributing non-transferable rights to owners of shares of its common stock at the close of business on May , 1999, at no cost to the shareholders. J. Alexander's will give you 1.0 right for each share of common stock that you own at the close of business on May , 1999. If you wish to exercise your rights, you must do so on or before , 1999 at 5 p.m., Central Daylight Time. After that date, the rights will expire and will no longer be exercisable. BASIC SUBSCRIPTION RIGHT For each right you receive, you will be entitled to purchase, upon payment of $3.75 per share to J. Alexander's, 0.2 share of common stock, rounding up any remaining fractional share to the next whole number of shares (the "Basic Subscription Right"). J. Alexander's will send you certificates representing the shares of common stock that you purchase pursuant to your Basic Subscription Right as soon as practicable after , 1999, whether you exercise your rights immediately prior to that date or earlier. EXPIRATION DATE The rights will expire at 5:00 p.m., Central Daylight Time, on , 1999, unless J. Alexander's, in its discretion, extends the rights offering for up to 10 days. If you do not exercise your Basic Subscription Rights prior to , 1999, the rights will be null and void. J. Alexander's will not be required to issue shares to you if the Subscription Agent receives your Subscription Certificate or your payment after that date, regardless of when you sent the Subscription Certificate and payment, unless you send the documents in compliance with the Guaranteed Delivery Procedures described below. WITHDRAWAL RIGHT J. Alexander's may withdraw the rights offering at any time prior to or on , 1999, for any reason (including, without limitation, a change in the market price of the common stock). If J. Alexander's withdraws the rights offering, any funds received from shareholders will be promptly refunded, without interest or penalty. DETERMINATION OF SHARE PRICE J. Alexander's and its Board of Directors decided to offer shares for $3.75 per share during the rights offering after considering such factors as the historic and current market price of J. Alexander's common stock and J. Alexander's need for capital. Solidus also purchased 1,086,266 additional shares of common stock on March 22, 1999 at the $3.75 per share price. The $3.75 per share price should not be considered an indication of the actual value of J. Alexander's or its common stock. J. Alexander's cannot assure you that the market price of the common stock will not decline during the rights offering. J. Alexander's also cannot assure you that you will be able to sell shares of common stock purchased during the rights offering at a price equal to or greater than $3.75 per share. 11 15 NON-TRANSFERABILITY OF RIGHTS The rights may not be sold and may only be transferred by operation of law. J. Alexander's common stock will be represented by stock certificates. Common stock issued under this rights offering will be registered under the federal securities laws. Therefore, these shares of common stock may be sold freely after the rights offering, subject to restrictions on affiliates of J. Alexander's. See "-- Basic Subscription Right" for an explanation of what you will receive upon exercise of your rights. EXERCISE OF RIGHTS You may exercise your rights by delivering to the Subscription Agent on or prior to , 1999: (1) a properly completed and duly executed Subscription Certificate; (2) any required signature guarantees; and (3) payment in full of $3.75 per share to be purchased through the Basic Subscription Right. You should deliver your Subscription Certificate and payment to the address set forth below under "-- Subscription Agent." METHOD OF PAYMENT Payment for the shares must be made by: (1) bank draft drawn upon a United States bank or a postal, telegraphic or express money order payable to "SunTrust Bank, Nashville, N.A., as Subscription Agent"; (2) wire transfer of funds to the account maintained by the Subscription Agent for such purpose at SunTrust Bank, Nashville, N.A. (please contact Subscription Agent for specific instructions); or (3) notice of guaranteed delivery of payment, as discussed below (a "Notice of Guaranteed Delivery"), from a member firm of a registered national securities exchange or a member of the National Association of Securities Dealers, Inc., or a commercial bank or trust company having an office or correspondent in the United States. Payment will be deemed to have been received by the Subscription Agent only upon: (1) clearance of any uncertified check; (2) receipt by the Subscription Agent of any certified check or bank draft drawn upon a U.S. bank or of any postal, telegraphic or express money order; or (3) receipt of actual funds pursuant to any Notice of Guaranteed Delivery. PLEASE NOTE THAT FUNDS PAID BY UNCERTIFIED PERSONAL CHECK MAY TAKE AT LEAST FIVE BUSINESS DAYS TO CLEAR. ACCORDINGLY, IF YOU WISH TO PAY BY MEANS OF AN UNCERTIFIED PERSONAL CHECK, J. ALEXANDER'S URGES YOU TO MAKE PAYMENT SUFFICIENTLY IN ADVANCE OF , 1999, TO ENSURE THAT THE PAYMENT IS RECEIVED AND CLEARS BEFORE 12 16 THAT DATE. J. ALEXANDER'S ALSO URGES YOU TO CONSIDER PAYMENT BY MEANS OF CERTIFIED OR CASHIER'S CHECK, MONEY ORDER OR WIRE TRANSFER OF FUNDS. GUARANTEED DELIVERY PROCEDURES If you want to exercise your rights, but time will not permit your payment or Subscription Certificate to reach the Subscription Agent on or prior to , 1999, you may exercise your rights if you satisfy the following Guaranteed Delivery Procedures: (1) You send, and the Subscription Agent receives, on or prior to , 1999, a Notice of Guaranteed Delivery, substantially in the form provided with the prospectus, from a member firm of a registered national securities exchange or a member of the National Association of Securities Dealers, Inc., or a commercial bank or trust company having an office or correspondent in the United States. The Notice of Guaranteed Delivery must state: - your name, - the number of rights that you hold, and - the number of shares that you wish to purchase pursuant to the Basic Subscription Right. The Notice of Guaranteed Delivery must guarantee the delivery of (a) payment in full for each share of common stock to be purchased through the Basic Subscription Right and (b) your Subscription Certificate to the Subscription Agent within three New York Stock Exchange trading days following the date of the Notice of Guaranteed Delivery; and (2) You send, and the Subscription Agent receives, (a) payment in full for each share of common stock to be purchased through the Basic Subscription Right and (b) your properly completed and duly executed Subscription Certificate, including any required signature guarantees, within three New York Stock Exchange trading days following the date of your Notice of Guaranteed Delivery. The Notice of Guaranteed Delivery may be delivered to the Subscription Agent in the same manner as your Subscription Certificate at the addresses set forth below, or may be transmitted to the Subscription Agent by facsimile transmission, to facsimile number (615) 748-5331. You can obtain additional copies of the form of Notice of Guaranteed Delivery by requesting it from the Subscription Agent at the address set forth below under "-- Subscription Agent." SIGNATURE GUARANTEES Signatures on the Subscription Certificate must be guaranteed by an Eligible Guarantor Institution, as defined in Rule 17Ad-15 of the Exchange Act, subject to the standards and procedures adopted by the Subscription Agent. Eligible Guarantor Institutions include banks, brokers, dealers, credit unions, national securities exchanges and savings associations. 13 17 Signatures on the Subscription Certificate do not need to be guaranteed if: (1) the Subscription Certificate provides that the shares and certificates for shares of common stock to be purchased are to be issued and delivered directly to you, the record owner of such rights, or (2) the Subscription Certificate is submitted for the account of a member firm of a registered national securities exchange or a member of the National Association of Securities Dealers, Inc., or a commercial bank or trust company having an office or correspondent in the United States. SHARES HELD FOR OTHERS If you hold shares of common stock for the account of others, such as a broker, a trustee or a depository for securities, you should notify the respective beneficial owners of such shares as soon as possible to obtain instructions with respect to the rights beneficially owned by them. If you are a beneficial owner of common stock held by a holder of record, such as a broker, trustee or a depository for securities, you should contact the holder and ask him to effect transactions in accordance with your instructions. AMBIGUITIES IN EXERCISE OF THE RIGHTS If you do not specify the number of rights being exercised on your Subscription Certificate, or if your payment is not sufficient to pay the total purchase price for all of the shares that you indicated you wished to purchase, you will be deemed to have exercised the maximum number of rights that could be exercised for the amount of the payment that the Subscription Agent receives from you. If your payment exceeds the total purchase price for all of the rights shown on your Subscription Certificate, your payment will be applied, until depleted, to subscribe for shares in the following order: (1) to subscribe for the number of shares, if any, that you indicated on the Subscription Certificate that you wished to purchase through your Basic Subscription Right; (2) to subscribe for shares until your Basic Subscription Right has been fully exercised. Any excess payment remaining after the foregoing allocation will be returned to you as soon as practicable by mail, without interest or deduction. IMPORTANT PLEASE CAREFULLY READ THE INSTRUCTIONS INCLUDED IN THIS PROSPECTUS AND THE SUBSCRIPTION CERTIFICATE AND FOLLOW THOSE INSTRUCTIONS IN DETAIL. DO NOT SEND SUBSCRIPTION CERTIFICATES TO J. ALEXANDER'S. YOU ARE RESPONSIBLE FOR CHOOSING THE PAYMENT AND DELIVERY METHOD FOR YOUR SUBSCRIPTION CERTIFICATE, AND YOU BEAR THE RISKS ASSOCIATED WITH SUCH DELIVERY. IF YOU CHOOSE TO DELIVER 14 18 YOUR SUBSCRIPTION CERTIFICATE AND PAYMENT BY MAIL, J. ALEXANDER'S RECOMMENDS THAT YOU USE REGISTERED MAIL, PROPERLY INSURED, WITH RETURN RECEIPT REQUESTED. J. ALEXANDER'S ALSO RECOMMENDS THAT YOU ALLOW A SUFFICIENT NUMBER OF DAYS TO ENSURE DELIVERY TO THE SUBSCRIPTION AGENT AND CLEARANCE OF PAYMENT PRIOR TO , 1999. BECAUSE UNCERTIFIED PERSONAL CHECKS MAY TAKE AT LEAST FIVE BUSINESS DAYS TO CLEAR, J. ALEXANDER'S STRONGLY URGES YOU TO PAY, OR ARRANGE FOR PAYMENT, BY MEANS OF CERTIFIED OR CASHIER'S CHECK, MONEY ORDER OR WIRE TRANSFER OF FUNDS. COMPANY'S DECISION BINDING All questions concerning the timeliness, validity, form and eligibility of any exercise of rights will be determined by J. Alexander's, whose determinations will be final and binding. J. Alexander's, in its sole discretion, may waive any defect or irregularity, or permit a defect or irregularity to be corrected within such time as it may determine, or reject the purported exercise of any right by reason of any defect or irregularity in such exercise. Subscriptions will not be deemed to have been received or accepted until all irregularities have been waived or cured within such time as J. Alexander's determines in its sole discretion. Neither J. Alexander's nor the Subscription Agent will be under any duty to give notification of any defect or irregularity in connection with the submission of Subscription Certificates or incur any liability for failure to give such notification. NO REVOCATION AFTER THE SUBSCRIPTION AGENT HAS RECEIVED YOUR SUBSCRIPTION CERTIFICATE OR A NOTICE OF GUARANTEED DELIVERY ON YOUR BEHALF, YOU MAY NOT REVOKE YOUR SUBSCRIPTION. FEES AND EXPENSES J. Alexander's will pay all fees charged by the Subscription Agent. You are responsible for paying any other commissions, fees, taxes or other expenses incurred in connection with the exercise of the rights. Neither J. Alexander's nor the Subscription Agent will pay such expenses. SUBSCRIPTION AGENT J. Alexander's has appointed SunTrust Bank, Nashville, N.A., as Subscription Agent for the rights offering. The Subscription Agent's address is:
U.S. MAIL BY COURIER OR OVERNIGHT DELIVERY --------- -------------------------------- SunTrust Bank SunTrust Bank Corporate Trust Department Corporate Trust Department SunTrust Financial Center, Sixth SunTrust Financial Center, Sixth Floor Floor P.O. Box 305110 424 Church Street Nashville, Tennessee 37230 Nashville, Tennessee 37219 Attn: Donna Williams Attn: Donna Williams Kyle Burchard Kyle Burchard
The Subscription Agent's telephone number is (615) 748-4745, and its facsimile number is (615) 748-5331. 15 19 You should deliver your Subscription Certificate, payment of the Subscription Price and Notice of Guaranteed Delivery (if any) to the Subscription Agent. J. Alexander's will pay the fees and expenses of the Subscription Agent. J. Alexander's has also agreed to indemnify the Subscription Agent from any liability which it may incur in connection with the rights offering. IF YOU HAVE QUESTIONS If you have questions or need assistance concerning the procedure for exercising rights, or if you would like additional copies of this prospectus or the Notice of Guaranteed Delivery, you should contact the Subscription Agent at the address set out above. If you have other questions concerning the rights offering or J. Alexander's, you may contact: R. Gregory Lewis Chief Financial Officer J. Alexander's Corporation P.O. Box 24300 3401 West End Avenue Nashville, Tennessee 37203 (615) 269-1900 TRANSFER AGENT AND REGISTRAR SunTrust Bank, Nashville, N.A. c/o SunTrust Bank, Atlanta, N.A. is the transfer agent and registrar for the common stock. PLAN OF DISTRIBUTION Promptly following the effective date of the Registration Statement that contains this prospectus, J. Alexander's will distribute the rights and copies of this prospectus to individuals who own shares of common stock at the close of business on , 1999. If you wish to exercise your rights and to purchase shares, you should complete the Subscription Certificate and return it, with payment for the shares, to the Subscription Agent, SunTrust Bank, Nashville, N.A. at the address on page 15. For further instructions on how to exercise rights, see "The Rights Offering -- Exercise of Rights." If you have any questions, you should contact the Subscription Agent at the telephone number and address on page 15. FEDERAL INCOME TAX CONSIDERATIONS The following general discussion summarizes the anticipated material federal income tax consequences of the issuance, exercise or lapse of the rights. This discussion does not consider any federal income tax consequences of the rights offering to any particular shareholder's individual situation or the federal income tax consequences of the rights offering that may be relevant to particular classes of stockholders, such as banks, insurance companies and foreign individuals and entities. In addition, this summary does not address 16 20 the tax consequences of the rights offering under applicable state, local or foreign tax laws. This discussion assumes that your shares of common stock and the rights and shares issued to you during the rights offering constitute capital assets. This summary is based on current law, which is subject to change at any time, possibly with retroactive effect. THIS DISCUSSION IS INCLUDED FOR YOUR GENERAL INFORMATION ONLY. YOU SHOULD CONSULT YOUR TAX ADVISOR TO DETERMINE THE TAX CONSEQUENCES TO YOU OF THE RIGHTS OFFERING IN LIGHT OF YOUR PARTICULAR CIRCUMSTANCES, INCLUDING ANY STATE, LOCAL AND FOREIGN TAX CONSEQUENCES. TAX CONSEQUENCES TO SHAREHOLDERS ISSUANCE OF RIGHTS The rights offering is intended to be characterized as a tax-free distribution under Section 305(a) of the Internal Revenue Code of 1986, as amended (the "Code"). However, existing law is not clear as to whether the distribution of rights to shareholders will be characterized as a distribution under Section 305(a) of the Code or, alternatively, as a distribution under Sections 301 and 305(b) of the Code. Under Section 305(a) of the Code, a distribution of stock or stock rights to a corporation's shareholders is generally tax free. Section 305(b), however, provides certain instances where a distribution of stock or stock rights is taxable to the shareholders. One such instance is a "disproportionate distribution" in which the distribution (or a series of distributions) has the result of (1) the receipt of property by some shareholders, and (2) an increase in the proportionate interests of other shareholders in the assets or earnings and profits of the corporation. For purposes of this determination, the holders of J. Alexander's convertible debentures and holders of outstanding options will be treated as shareholders. If required under the terms of the convertible debentures, the rights offering will result in an adjustment in the conversion ratio. Such an adjustment might have the effect of avoiding an increase in the common stockholders' interests in the assets and earnings and profits of J. Alexander's as a result of the rights offering (when compared to the interest of the holders of convertible debentures). However, no such adjustment is provided under the terms of outstanding stock options. The Internal Revenue Service ("IRS") may contend that the distribution of rights is a disproportionate distribution of stock taxable to recipients of the rights under Section 305(b) of the Code. If the IRS were to prevail under this contention, a shareholder would be viewed as receiving a distribution equal to the fair market value of the rights, which would be taxable as a dividend to the extent of J. Alexander's current and accumulated earnings and profits. The determination of a corporation's earnings and profits is complex, and in the case of current earnings and profits, cannot be determined until the close of its taxable year. J. Alexander's presently has accumulated earnings and profits, but no computation has been made of the precise amount. Notwithstanding the foregoing, the rights offering may properly be characterized as a tax-free distribution under Section 305(a) of the Code, in which case it will not be taxable regardless of whether J. Alexander's has current or accumulated earnings and profits for the year. 17 21 BASIS Because the rights may not be sold or transferred, the tax basis assigned to the rights is relevant only if the rights are exercised. The tax basis of common stock acquired through exercise of rights will be equal to the sum of the exercise price therefor and the holder's tax basis in the rights, if any. The holder's tax basis in the rights is determined by allocation of the holder's tax basis in the common stock with respect to which the rights are received between that common stock and the rights. That allocation is made in the manner described in the paragraph immediately below. If the rights offering is characterized as a nontaxable Section 305(a) distribution, and if the fair market value of the rights on the date of distribution is less than 15% of the fair market value of the common stock with respect to which the rights are received, the shareholder will have the following choice: - a basis of zero may be assigned to the rights, or - an election may be made on the federal tax return for the taxable year in which the stock rights are received to allocate the basis of the common stock between the common stock and the rights in proportion to the fair market value of each. However, if the fair market value of the rights on the date of distribution is 15% or more of the fair market value of the common stock, the basis of the common stock must be allocated proportionately between the common stock and the rights. In either case, the tax basis allocation will occur only if the rights are exercised. If, however, the rights offering is characterized as a taxable dividend, each shareholder will have a tax basis in the rights equal to the fair market value of the rights on the date of the rights offering. LAPSE OF RIGHTS If the rights offering is characterized as a nontaxable Section 305(a) distribution, a shareholder who allows rights received by him or her to lapse without exercising them will not recognize any gain or loss, and, as the rights were not exercised, no adjustment will be made to the tax basis of the common stock owned by the shareholder. If, however, the rights offering is characterized as a taxable dividend, a shareholder who allowed the rights to lapse will have a short-term capital loss in an amount equal to his or her tax basis in the rights (as discussed above), and no adjustment will be made to the tax basis of the common stock owned by the shareholder. EXERCISE OF RIGHTS A shareholder will not recognize any gain or loss upon the exercise of rights. The tax basis of common stock acquired through exercise of rights will be equal to the sum of the exercise price therefor and the holder's tax basis in the rights, if any. The holding period for the common stock acquired through exercise of the rights will begin on the day following the date the rights are considered exercised. COMMON STOCK ACQUIRED The sale or other disposition of common stock acquired will result in the recognition of gain or loss by the holder of such common stock in an amount equal to the difference 18 22 between the amount realized and the holder's adjusted tax basis in the common stock. Any such gain or loss generally will be capital gain or loss and will be long-term capital gain or loss if the holder held the common stock for more than one year. TAXATION OF J. ALEXANDER'S J. Alexander's will not recognize any gain, other income or loss upon the issuance of the rights, the lapse of the rights or the receipt of payment for shares upon exercise of the rights. LEGAL MATTERS The validity of the issuance of the shares of common stock offered hereby and certain tax matters will be passed upon for J. Alexander's by Bass, Berry & Sims PLC, Nashville, Tennessee. Certain members of Bass, Berry & Sims PLC beneficially own shares of the common stock. EXPERTS The consolidated financial statements of J. Alexander's Corporation appearing in J. Alexander's Corporation's Annual Report (Form 10-K) for the year ended January 3, 1999, have been audited by Ernst & Young LLP, independent auditors, as set forth in their report thereon included therein and incorporated herein by reference. Such consolidated financial statements are incorporated herein by reference in reliance upon such report given on the authority of such firm as experts in accounting and auditing. IF YOU WOULD LIKE ADDITIONAL INFORMATION J. Alexander's files annual, quarterly and special reports, proxy statements and other information with the U.S. Securities and Exchange Commission ("SEC"). You may read and copy this information at the SEC's public reference rooms, which are located at: 450 Fifth Street, NW 7 World Trade Center, Suite 1300 Washington, DC 20549 New York, NY 10048 500 West Madison Street, Suite 1400 Chicago, IL 60661-2511
Please call the SEC at 1-800-SEC-0330 for further information on the public reference rooms. This information is also available on-line through the SEC's Electronic Data Gathering, Analysis, and Retrieval System (EDGAR), located on the SEC's web site (http://www.sec.gov.). Also, J. Alexander's will provide you (free of charge) with any of its documents filed with the SEC. To get your free copies, please call or write: R. Gregory Lewis Chief Financial Officer J. Alexander's Corporation P.O. Box 24300 3401 West End Avenue Nashville, Tennessee 37203 (615) 269-1900 19 23 J. Alexander's has filed a Registration Statement with the SEC on Form S-3 with respect to the rights offering. This prospectus is a part of the Registration Statement, but the prospectus does not repeat important information that you can find in the Registration Statement, reports and other documents that J. Alexander's filed with the SEC. The SEC allows J. Alexander's to "incorporate by reference" those documents, which means that J. Alexander's can disclose important information to you by referring you to other documents. The documents that are incorporated by reference are legally considered to be a part of this prospectus. The documents incorporated by reference are: (1) Annual Report on Form 10-K for the year ended January 3, 1999; (2) The description of the common stock contained in J. Alexander's Form 8-A, as amended; and (3) Any filings with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act of 1934 between the date of this prospectus and the termination of the rights offering. As you read the above documents, you may find some inconsistencies in information from one document to another. If you find inconsistencies between the documents, or between a document and this prospectus, you should rely on the statements made in the most recent document. PROSPECTIVE INVESTORS MAY RELY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE PROSPECTIVE INVESTORS WITH INFORMATION DIFFERENT FROM THAT CONTAINED IN THIS PROSPECTUS. THIS PROSPECTUS IS NOT AN OFFER TO SELL NOR IS IT SEEKING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED. THIS PROSPECTUS IS NOT AN OFFER TO SELL NOR IS IT SEEKING AN OFFER TO BUY SECURITIES OTHER THAN THE SHARES OF COMMON STOCK TO BE ISSUED PURSUANT TO THE RIGHTS OFFERING. THE INFORMATION CONTAINED IN THIS PROSPECTUS IS CORRECT ONLY AS OF THE DATE OF THIS PROSPECTUS, REGARDLESS OF THE TIME OF THE DELIVERY OF THIS PROSPECTUS OR ANY SALE OF THESE SECURITIES. NO ACTION IS BEING TAKEN IN ANY JURISDICTION OUTSIDE THE UNITED STATES TO PERMIT A PUBLIC OFFERING OF THE COMMON STOCK OR POSSESSION OR DISTRIBUTION OF THIS PROSPECTUS IN ANY SUCH JURISDICTION. PERSONS WHO COME INTO POSSESSION OF THIS PROSPECTUS IN JURISDICTIONS OUTSIDE THE UNITED STATES ARE REQUIRED TO INFORM THEMSELVES ABOUT AND TO OBSERVE ANY RESTRICTIONS AS TO THIS OFFERING AND THE DISTRIBUTION OF THIS PROSPECTUS APPLICABLE IN THE JURISDICTION. 20 24 QUESTIONS AND ANSWERS ABOUT THE RIGHTS OFFERING WHAT IS A RIGHT? A right is an opportunity for you to purchase shares of common stock at a fixed price and in an amount proportional to your existing interest in J. Alexander's. When you "exercise" rights, that means that you choose to purchase the shares of common stock that the rights entitle you to purchase. WHAT IS THE RIGHTS OFFERING? J. Alexander's will distribute to you 1.0 right for each share of common stock that you own at the close of business on May , 1999. For every right you receive, you will be entitled to purchase 0.2 share of common stock, rounding up any remaining fractional share to the nearest whole number of shares, for $3.75 per share. You may exercise any number of your rights, or you may choose not to exercise any rights. For a discussion of the rights to be distributed in the rights offering, see "The Rights Offering -- The Rights." WHY IS J. ALEXANDER'S ENGAGING IN A RIGHTS OFFERING? The rights offering is part of a financing plan that J. Alexander's expects will raise up to approximately $8.1 million in equity for J. Alexander's. J. Alexander's believes that raising equity capital to repay some of its outstanding debt will benefit J. Alexander's by reducing its debt to equity ratio and reducing its interest expense, which will improve earnings. J. Alexander's believes that accomplishing these objectives will improve its financial condition and may allow it to negotiate improved terms for its credit facilities, including interest rates and availability. The financing plan has two parts: - Sale of $4.1 million of common stock to Solidus. On March 22, 1999, Solidus, LLC, a Tennessee limited liability company whose principal owners are Dr. John Morris and members of his family, purchased 1,086,266 additional shares of common stock for approximately $4.1 million, or $3.75 per share. E. Townes Duncan, a director of J. Alexander's, is also an owner of and manages the investments of Solidus. J. Alexander's completed the sale of common stock to Solidus before the rights offering to provide J. Alexander's with additional equity on favorable terms (including the agreements described below) and more quickly than would have been possible through the rights offering, and to ensure that J. Alexander's obtained the minimum amount of new equity capital which it believed it needed to effectively carry out its long term business plan. In addition, Solidus agreed to the following: - for a period of seven years, Solidus would not acquire or hold more than 33% of J. Alexander's common stock. - for a period of seven years, Solidus would not solicit proxies for a vote of the shareholders of J. Alexander's. - for a period of seven years, Solidus would not sell J. Alexander's common stock it owns and would only transfer common stock to J. Alexander's, a person, entity or group approved by J. Alexander's or to an affiliate of Solidus. 21 25 - the above restrictions on Solidus' ownership and ability to solicit proxies would terminate in the event of certain tender offers or exchange offers, a notice filing with the Department of Justice relating to the acquisition of more than 15% of the outstanding common stock or with the SEC relating to the acquisition of more than 10% of the outstanding common stock, J. Alexander's proposing or approving a merger or other business combination, or a change to a majority of J. Alexander's Board of Directors over a two-year period. - Solidus would not exercise during the rights offering rights attributable to the 1,086,266 additional shares of common stock purchased on March 22, 1999. - $4.1 million rights offering. A total of 1,089,067 shares could be purchased during the rights offering for a total purchase price of $4,084,001. J. Alexander's will apply the proceeds from the financing plan to repay a portion of the debt under its revolving credit facility. See "Use of Proceeds" for a discussion of the application of proceeds from the rights offering. WILL EVERY SHAREHOLDER RECEIVE RIGHTS IN PROPORTION TO THEIR CURRENT HOLDINGS? Yes, but only shareholders who exercise their rights will receive additional shares of common stock. Because Solidus purchased 1,086,266 shares before the rights offering, Solidus agreed that it will not exercise any rights attributable to the 1,086,266 additional shares it purchased. HOW DID J. ALEXANDER'S ARRIVE AT THE $3.75 PER SHARE PRICE? In determining the price per share for the sale to Solidus and for the Rights Offering, J. Alexander's considered current and historical market prices for the common stock and J. Alexander's need for capital. Solidus bought its shares on March 22, 1999 at the same price per share. For a further explanation of how J. Alexander's determined the per-share price, see "The Rights Offering -- Determination of Share Price." HOW DO I EXERCISE MY RIGHTS? You must properly complete the attached Subscription Certificate and forward it to SunTrust Bank, Nashville, N.A., as Subscription Agent, on or before , 1999. The address for the Subscription Agent is on page 15. See "The Rights Offering -- Exercise of Rights" for detailed instructions on how to exercise your rights. Your Subscription Certificate must be accompanied by proper payment for each share that you wish to purchase. For a full explanation of how to pay for your shares, see "The Rights Offering -- Method of Payment." HOW LONG WILL THE RIGHTS OFFERING LAST? If you do not exercise your rights before 5:00 p.m. Central Daylight Time, on , 1999, the rights will expire. J. Alexander's, in its discretion, may decide to extend the rights offering for up to 10 days. See "The Rights Offering -- Expiration Date" for a discussion of the expiration of the rights. 22 26 AFTER I EXERCISE MY RIGHTS, CAN I CHANGE MY MIND? No. Once you send in your Subscription Certificate and payment, you cannot revoke the exercise of your rights. For further explanation of the no-revocation policy, see "Rights Offering -- No Revocation." WHAT HAPPENS IF I CHOOSE NOT TO EXERCISE MY RIGHTS? You will retain your current number of shares of common stock even if you do not exercise your rights. If you do not exercise your rights, you could diminish your proportionate interest in J. Alexander's, and your voting rights could be diluted. See "If You Do Not Exercise Your Rights, Your Ownership Interest May Be Diluted" for a discussion of this consequence. CAN I SELL MY RIGHTS? No. You may not sell or transfer your rights to another individual or entity. See "The Rights Offering -- Non-Transferability of Rights" for an explanation of the prohibition on the transfer of rights. CAN I SELL MY COMMON STOCK AFTER THE RIGHTS OFFERING? Yes. These shares of common stock may be sold freely after the rights offering, subject to restrictions on affiliates of J. Alexander's. Common stock sold in this rights offering will be registered under the federal securities laws. For information regarding the stock you will receive upon exercise of rights, see "The Rights Offering -- Basic Subscription Right." WHAT ARE THE FEDERAL INCOME TAX CONSEQUENCES OF EXERCISING MY RIGHTS? The rights offering is intended to be characterized as a nontaxable stock dividend. However, the IRS may view the distribution of the rights as ordinary income to the shareholder taxable in the amount of the fair market value of the rights. In any event, the exercise of the rights will not be taxable. You should seek specific tax advice from your personal tax advisor. See "Tax Consequences to Shareholders" for a detailed discussion of tax matters. WHEN WILL I RECEIVE MY NEW SHARES? If you purchase shares through the rights offering, J. Alexander's will send you a certificate representing shares of common stock as soon as practicable after the rights exercise period expires. CAN J. ALEXANDER'S CANCEL THE RIGHTS OFFERING? Yes. J. Alexander's can cancel the rights offering at any time on or before , 1999, for any reason. 23 27 HOW MUCH MONEY WILL J. ALEXANDER'S RECEIVE FROM THE SALE TO SOLIDUS AND THE RIGHTS OFFERING? J. Alexander's received $4,073,498 for the sale of 1,086,266 shares of common stock to Solidus on March 22, 1999. J. Alexander's gross proceeds from the rights offering depend on the number of shares of common stock that are purchased. If J. Alexander's sells all 1,089,067 shares offered by this prospectus, then J. Alexander's will receive proceeds of $4,084,001 from the rights offering. If no shareholders exercise rights, J. Alexander's will not receive any proceeds from the rights offering. HOW MANY SHARES WILL BE OUTSTANDING AFTER THE RIGHTS OFFERING? The number of shares of common stock outstanding after the rights offering depends on the number of shares that are purchased. If J. Alexander's sells all of the shares offered by this prospectus, then J. Alexander's will issue during the rights offering 1,089,067 new shares of common stock. Based on this number, J. Alexander's anticipates that there will be 7,620,668 shares of J. Alexander's common stock outstanding after the rights offering. WHO CAN I TALK TO IF I HAVE MORE QUESTIONS? If you have questions or need assistance concerning the procedure for exercising rights, or if you would like additional copies of this prospectus or the Notice of Guaranteed Delivery, you should contact the Subscription Agent at the address on page 15 above. If you have more questions about the rights offering, please contact R. Gregory Lewis Chief Financial Officer J. Alexander's Corporation P.O. Box 24300 3401 West End Avenue Nashville, Tennessee 37203 (615) 269-1900 24 28 PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION The following table sets forth the expenses in connection with this Registration Statement. J. Alexander's will pay all expenses of the rights offering. All such expenses are estimates, other than the filing fees payable to the Securities and Exchange Commission and the New York Stock Exchange. Securities and Exchange Commission Filing Fee............... $ 1,136 New York Stock Exchange Listing Fee......................... 3,802 Printing Fees and Expenses.................................. 20,000 Legal Fees and Expenses..................................... 75,000 Accounting Fees and Expenses................................ 25,000 Subscription Agent Fee...................................... 10,000 Miscellaneous............................................... 15,062 -------- Total..................................................... $150,000 ========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS The Tennessee Business Corporation Act ("TBCA") provides that a corporation may indemnify any of its directors and officers against liability incurred in connection with a proceeding if (i) the director or officer acted in good faith, (ii) in the case of conduct in his or her official capacity with the corporation, the director or officer reasonably believed such conduct was in the corporation's best interest, (iii) in all other cases, the director or officer reasonably believed that his or her conduct was not opposed to the best interest of the corporation, and (iv) in connection with any criminal proceeding, the director or officer had no reasonable cause to believe that his or her conduct was unlawful. In actions brought by or in the right of the corporation, however, the TBCA provides that no indemnification may be made if the director or officer was adjudged to be liable to the corporation. In cases where the director or officer is wholly successful, on the merits or otherwise, in the defense of any proceeding instigated because of his or her status as an officer or director of a corporation, the TBCA mandates that the corporation indemnify the director or officer against reasonable expenses incurred in the proceeding. The TBCA also provides that in connection with any proceeding charging improper personal benefit to an officer or director, no indemnification may be made if such officer or director is adjudged liable on the basis that personal benefit was improperly received. Notwithstanding the foregoing, the TBCA provides that a court of competent jurisdiction, upon application, may order that an officer or director be indemnified for reasonable expenses if, in consideration of all relevant circumstances, the court determines that such individual is fairly and reasonably entitled to indemnification, notwithstanding the fact that (i) such officer or director was adjudged liable to the corporation in a proceeding by or in right of the corporation; (ii) such officer or director was adjudged liable on the basis that personal benefit was improperly received by him; or (iii) such officer or director breached his duty of care to the corporation. Paragraph 10 of J. Alexander's Charter, as amended (the "Charter"), provides that to the fullest extent permitted by law no director of J. Alexander's shall be personally liable to J. Alexander's or any of its shareholders for monetary damages for breach of any fiduciary duty as a director. Under the TBCA, this Charter provision relieves II-1 29 J. Alexander's directors from personal liability to J. Alexander's or its shareholders for monetary damages for breach of fiduciary duty as a director except for liability arising from (i) any breach of a director's duty of loyalty to J. Alexander's or its shareholders, (ii) acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, or (iii) any unlawful distributions. In addition, J. Alexander's bylaws provide that J. Alexander's shall indemnify all present and future directors and officers (and any person who may have served at its request as an officer or director of another company in which J. Alexander's owns shares of its capital stock) to the fullest extent permitted by law. ITEM 16. EXHIBIT INDEX
EXHIBIT DESCRIPTION NO.---- ----------- 4.1 -- Charter (Exhibit 3(a) of the Registrant's Annual Report on Form 10-K for the year ended December 30, 1990, is incorporated herein by reference) 4.2 -- Amendment to Charter dated February 7, 1997 (Exhibit 3(a)(2) of the Registrant's Annual Report on Form 10-K for the year ended December 29, 1996, is incorporated herein by reference) 4.3 -- Restated Bylaws as currently in effect (Exhibit 3(b) of the Registrant's Annual Report on Form 10-K for the year ended January 3, 1999, is incorporated herein by reference) 4.4 -- Form of Indenture dated as of May 19, 1983, between the Registrant and First American National Bank of Nashville, Trustee (Exhibit 4 of the Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 1983, is incorporated herein by reference) 4.5 -- Rights Agreement dated May 16, 1989, by and between the Registrant and NationsBank (formerly Sovran Bank/Central South) including Form of Rights Certificate and Summary of Rights (Exhibit 3 to the Report on Form 8-K dated May 16, 1989, is incorporated herein by reference) 4.6 -- Amendments to Rights Agreement dated February 22, 1999, by and between the Registrant and SunTrust Bank (amending Rights Agreement dated May 16, 1989) (Exhibit 4(c) to the Registrant's Annual Report on Form 10-K for the year ended January 3, 1999 is incorporated herein by reference) 4.7 -- Amendment to Rights Agreement dated March 22, 1999, by and between the Registrant and SunTrust Bank (amending Rights Agreement dated May 16, 1989) (Exhibit 4(d) to the Registrant's Annual Report on Form 10-K for the year ended January 3, 1999 is incorporated herein by reference) 4.8 -- Subscription Rights Agreement by and between J. Alexander's and SunTrust Bank, Nashville, N.A., as Subscription Agent 5 -- Opinion of Bass, Berry & Sims PLC 8 -- Opinion of Bass, Berry & Sims PLC (Tax Matters) 23.1 -- Consent of Bass, Berry & Sims PLC (included in Exhibits 5 and 8) 23.2 -- Consent of Ernst & Young LLP 24* -- Power of Attorney (included on signature page) 99.1 -- Form of Subscription Certificate
II-2 30
EXHIBIT NO. DESCRIPTION - ------- ----------- 99.2 -- Form of Notice of Guaranteed Delivery for Subscription Certificates 99.3 -- Form of letter to shareholders 99.4 -- Form of letter to brokers 99.5 -- Form of brokers' letter to clients
- --------------- * Previously Filed ITEM 17. UNDERTAKINGS The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the provisions described under Item 15 above, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. The undersigned registrant hereby undertakes: (1) To file during any period in which offers or sales are being made, a post-effective amendment to this registration statement to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement. (2) That for the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (4) That for purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance on Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it is declared effective. II-3 31 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Amendment No. 1 to Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Nashville, Davidson County, Tennessee, on April 30, 1999. J. ALEXANDER'S CORPORATION By: /s/ LONNIE J. STOUT II -------------------------------------- Lonnie J. Stout II Chairman, President and Chief Executive Officer Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities indicated on April 30, 1999.
SIGNATURE TITLE --------- ----- /s/ LONNIE J. STOUT II Director and Chairman, President and - --------------------------------------------------- Chief Executive Officer (Principal Lonnie J. Stout II Executive Officer) /s/ R. GREGORY LEWIS Vice President and Chief Financial - --------------------------------------------------- Officer R. Gregory Lewis (Principal Financial Officer) /s/ MARK A. PARKEY Controller - --------------------------------------------------- (Principal Accounting Officer) Mark A. Parkey * Director - --------------------------------------------------- Earl Beasley, Jr. * Director - --------------------------------------------------- E. Townes Duncan * Director - --------------------------------------------------- Garland G. Fritts * Director - --------------------------------------------------- John L.M. Tobias *By: /s/ R. GREGORY LEWIS -------------------------------------------- R. Gregory Lewis Attorney-in-fact
II-4 32 INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION - ------ ----------- 4.8 -- Subscription Rights Agreement by and between J. Alexander's and SunTrust Bank, Nashville, N.A., as Subscription Agent 5 -- Opinion of Bass, Berry & Sims PLC 8 -- Opinion of Bass, Berry & Sims PLC (Tax Matters) 23.1 -- Consent of Bass, Berry & Sims PLC (included in Exhibits 5 and 8) 23.2 -- Consent of Ernst & Young LLP 99.1 -- Form of Subscription Certificate 99.2 -- Form of Notice of Guaranteed Delivery for Subscription Certificates 99.3 -- Form of letter to shareholder 99.4 -- Form of letter to broker 99.5 -- Form of brokers' letter to clients
EX-4.8 2 SUBSCRIPTION RIGHTS AGREMENT 1 EXHIBIT 4.8 SUBSCRIPTION RIGHTS AGREEMENT This SUBSCRIPTION RIGHTS AGREEMENT (the "Agreement") between J. Alexander's Corporation, a Tennessee corporation (the "Company"), and SunTrust Bank, Nashville, N.A., a national banking association, (the "Subscription Agent") is dated as of April 29, 1999 and is effective as of the effective date of the Company's Registration Statement on Form S-3 initially filed with the Securities and Exchange Commission on March 23, 1999 and the prospectus included therein (the "Prospectus"). RECITALS WHEREAS, the Company proposes to issue non-transferable Rights (the "Rights") entitling the holders thereof to purchase an aggregate of the number of shares of the Company's Common Stock, $.05 par value (the "Common Stock") set forth in the Prospectus (the "Shares"); and WHEREAS, the Subscription Agent, at the request of the Company, has agreed to act as the agent of the Company in connection with the issuance, registration, and exercise of the Rights; NOW, THEREFORE, in consideration of the premises and mutual agreements herein set forth, the parties hereto agree as follows: AGREEMENT 1. APPOINTMENT OF SUBSCRIPTION AGENT. The Company hereby appoints the Subscription Agent to act as agent for the Company in accordance with the instructions hereinafter set forth; and the Subscription Agent hereby accepts such appointment, upon the terms and conditions hereinafter set forth. 2. AMOUNT ISSUED. Subject to the provisions of this Agreement, the Company shall issue non-transferable Rights to purchase the number of shares of Common Stock set forth in the Prospectus. The Company shall deliver to holders of Common Stock as of the record date set forth in the Prospectus (the "Record Date") (the "Record Holders")1.0 Right for each share of Common Stock held of record on the Record Date. No fractional Rights or cash in lieu thereof will be issued or paid. Each Right shall entitle the holder thereof to purchase 0.2 share of Common Stock, rounding up any remaining fractional share to the nearest whole number of shares, at a price of $3.75 per share upon exercise of the Right as herein provided. 3. FORM OF SUBSCRIPTION CERTIFICATES. (a) The Rights shall be evidenced by certificates (the "Subscription Certificates") to be delivered pursuant to this Agreement. The Subscription Certificates shall be in substantially the form set forth in Exhibit A hereto together with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Agreement, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with any law or with any rules made pursuant thereto or with any rules of any securities exchange, any agreement between the Company and any holder of a Right (a "Rightholder"), or as may, consistently herewith, be determined by the officers executing such Subscription Certificates, as evidenced by their execution of such Subscription Certificates. 2 (b) Each record holder shall receive one (1) Subscription Certificate reflecting the total number of Rights the holder is entitled to exercise. (c) No Subscription Certificate may be divided in such a way as to permit the holder to receive a greater number of Rights than the number to which such Subscription Certificate entitles its holder, except that a depositary, bank, trust company, and securities broker or dealer holding shares of Common Stock on the Record Date for more than one beneficial owner may by delivering a written request by 5:00 p.m., Central time, on a date which is fifteen (15) business days from the effective date of the Registration Statement, as hereinafter defined, upon proper showing to the Subscription Agent, exchange its Subscription Certificate to obtain Subscription Certificates for the number of Rights to which each such beneficial owner individually would have been entitled had each been a Record Holder. The Company reserves the right to refuse to issue any such Subscription Certificate if such issuance would be inconsistent with the principle that each beneficial owner's Rights will entitle such owner to purchase shares of Common Stock rounded up to the nearest whole share. 4. EXECUTION OF SUBSCRIPTION CERTIFICATES. Subscription Certificates shall be signed on behalf of the Company by its Chairman, President, a Vice President or its Treasurer and attested by its Secretary. Each such signature upon the Subscription Certificates may be in the form of a facsimile signature of the current or any future Chairman, President, Vice President, Treasurer or Secretary and may be imprinted or otherwise reproduced on the Subscription Certificates, and for that purpose the Company may adopt and use the facsimile signature of any person who shall have been Chairman, President, Vice President, Treasurer or Secretary notwithstanding the fact that at the time the Subscription Certificates shall be delivered or disposed of, such person shall have ceased to hold such office. If any officer of the Company who shall have signed any of the Subscription Certificates shall cease to be such officer before the Subscription Certificates so signed shall have been delivered by the Subscription Agent or disposed of by the Company, such Subscription Certificates nevertheless may be delivered or disposed of as though such person had not ceased to be such officer of the Company; and any Subscription Certificate may be signed on behalf of the Company by any person who, at the actual date of the execution of such Subscription Certificate, shall be a proper officer of the Company to sign such Subscription Certificate, although at the date of the execution of this Agreement any such person was not such officer. 5. REGISTRATION. The Subscription Certificates shall be numbered and shall be registered in a register (the "Rights Register") to be maintained by the Subscription Agent. The Company and the Subscription Agent may deem and treat the registered holder of a Subscription Certificate as the absolute owner thereof (notwithstanding any notation of ownership or other writing thereon made by anyone), for the purpose of any exercise thereof or any distribution to the holder thereof and for all other 2 3 purposes, and neither the Company nor the Subscription Agent shall be affected by any notice to the contrary. 6. NO RIGHTS ISSUED TO A CERTAIN SHAREHOLDER. Pursuant to a Stock Purchase and Standstill Agreement dated as of March 22, 1999, (the "Purchase Agreement") among the Company and Solidus, LLC ("Solidus"), Solidus has agreed that it will not exercise or acquire any of the Rights issued to it as a result of its purchase of 1,086,266 shares of Common Stock pursuant to the Purchase Agreement. Thus, no Subscription Certificate will be issued to Solidus with respect to these shares. 7. DURATION AND EXERCISE OF RIGHTS; SUBSCRIPTION PRICE. (a) The Rights shall expire at (i) 5:00 p.m. Central Daylight Time (the "Close of Business") on the expiration date set forth in the Prospectus, subject to extension by up to 10 business days, in the sole discretion of the Company at any time prior to 5:00 p.m. on the expiration date set forth in the Prospectus, in a written statement to the Subscription Agent and with notice to registered Rightholders in the manner provided for in Section 15 (such date of expiration being hereinafter referred to as the "Expiration Date"). At such time as the Rights become exercisable, and thereafter until the Close of Business on the Expiration Date, the Rights may be exercised on any business day. After the Close of Business on the Expiration Date, the Rights will become void and of no value. (b) Subject to the provisions of this Agreement, each Right shall entitle the holder thereof to purchase from the Company (and the Company shall issue and sell to such holder of a Right) 0.2 fully paid and nonassessable Share at the price of $3.75 (U.S.) per share (the "Subscription Price") (the "Basic Subscription Right"). (c) A Rightholder shall exercise such holder's Rights to purchase Shares by depositing with the Subscription Agent at its offices maintained in Nashville, Tennessee (or at such other offices or agencies as may be designated by the Agent for the purpose of exercising the Rights (a "Subscription Agent Office"), the Subscription Certificate evidencing such Right duly completed and signed by the registered holder or holders thereof or by the duly appointed legal representative thereof or by a duly authorized attorney, such signature to be guaranteed if required in the manner described in Section 7(d) hereof, and paying to the Subscription Agent, in lawful money of the United States of America by wire transfer, check or bank draft drawn upon a United States bank or a postal, telegraphic or express money order, an amount equal to the Subscription Price multiplied by the number of Shares in respect of which the Rights are being exercised. Once a Rightholder submits a Subscription Certificate to exercise a Right, that exercise may not be revoked. (d) If a Rightholder wishes to exercise its Rights, but time will not permit such holder to cause both (i) payment in full for each Share to be purchased and (ii) the Subscription Certificate evidencing such Rights to reach the Subscription Agent on or prior to the Expiration Date, such Rights may nevertheless be exercised if all of the following conditions (the "Guaranteed Delivery Procedures") are met: 3 4 (i) the Subscription Agent receives, on or prior to the Expiration Date, a guarantee notice ("Notice of Guaranteed Delivery") substantially in the form provided with the Subscription Certificate, and distributed with the Subscription Certificates, from a member firm of a registered national securities exchange or a member of the National Association of Securities Dealers, Inc. (the "NASD"), or from a commercial bank or trust company having an office or correspondent in the United States (each, an "Eligible Institution"), stating the name of the exercising Rightholder, the number of Rights represented by the Subscription Certificate held by such exercising Rightholder, and the number of Shares being subscribed for pursuant to the Basic Subscription Right. The Notice of Guaranteed Delivery must guarantee the delivery to the Subscription Agent of (a) payment in full for each Share to be purchased pursuant to the Basic Subscription Right at a price of $3.75 per Share, and (b) any Subscription Certificate evidencing such Rights within three (3) New York Stock Exchange trading days following the date of the Notice of Guaranteed Delivery; and (ii) payment in full for each Share to be purchased pursuant to the Basic Subscription Right and the properly completed Subscription Certificate evidencing the Rights being exercised, with any required signatures guaranteed, are both received by the Subscription Agent within three New York Stock Exchange trading days following the date of the Notice of Guaranteed Delivery relating thereto. The Notice of Guaranteed Delivery may be delivered to the Subscription Agent in the manner set forth in Section 20 hereof. Unless a Subscription Certificate (i) provides that the shares of Common Stock to be issued pursuant to the exercise of Rights represented thereby are to be delivered directly to the record holder of such Rights at the address of record, or (ii) is submitted for the account of a member firm of a registered national securities exchange or a member of the NASD, or a commercial bank or trust company being an office or correspondent in the United States, signatures on such Subscription Certificate must be guaranteed by an Eligible Guarantor Institution, as defined in Rule 17Ad-15 of the Exchange Act. Eligible Guarantor Institutions include banks, brokers, dealers, credit unions, national securities exchanges and savings institutions. (e) Except where this Agreement provides otherwise, upon such surrender of a Subscription Certificate and payment of the Subscription Price, and as soon as practicable after the Expiration Date (if the offering of Rights is not withdrawn by the Company), the Subscription Agent shall instruct SunTrust Bank, Atlanta, N.A., the Company's transfer agent (the "Transfer Agent"), to requisition for issuance and delivery to the registered holder of such Subscription Certificate and in the name of the registered holder, or the beneficial owner in the case of an exercise through a broker or nominee, as the registered holder may designate, a certificate or certificates for the Share or Shares issuable upon the exercise of the Basic Subscription 4 5 Right evidenced by such Subscription Certificate. Such certificate or certificates shall be deemed to have been issued and any person so designated to be named therein shall be deemed to have become the holder of record of such Share or Shares as of the Expiration Date. The Subscription Price will be deemed to have been received by the Subscription Agent only upon (i) clearance of any uncertified check, (ii) receipt by the Subscription Agent of any wire transfer, certified check or bank draft drawn upon a U.S. bank or any postal, telegraphic or express money order, or (iii) receipt of actual funds pursuant to any Notice of Guaranteed Delivery. (f) Daily, during the period of the rights offering until the Expiration Date, the Subscription Agent shall report to the Company by telephone or telecopier by 4:00 p.m. (Central Time), confirmed by letter, data regarding Rights exercised, the total number of shares subscribed for, and payments received therefor, and within 2 business days following the Expiration Date, pay or deliver to the Company all moneys and other consideration received by it upon the purchase of Shares through the exercise of the Basic Subscription Rights. (g) The Subscription Agent shall, upon the written direction of the Company, invest the proceeds received by the Subscription Agent upon the exercise of the Basic Subscription Rights in direct obligations of the United States of America or obligations for which the full faith and credit of the United States is pledged to provide for the payment of principal and interest, certificates of deposit issued by commercial banks having capital and surplus in excess of One Hundred Million Dollars ($100,000,000), commercial paper rated A-1 or better by Standard & Poor's corporation or P-1 or better by Moody's Investors Services, Inc., or the Pegasus Treasury Money Market Fund. Any net profit resulting from, or interest or income produced by, such investments will be payable to the Company. (h) If either the number of Rights being exercised is not specified on a Subscription Certificate, or the payment delivered is not sufficient to pay the full aggregate Subscription Price for all shares of Common Stock stated to be subscribed for, the Rightholder will be deemed to have exercised the maximum number of Rights that could be exercised for the amount of the payment delivered by such Rightholder. If the payment delivered by the Rightholder exceeds the aggregate Subscription Price for the number of Rights evidenced by the Subscription Certificate delivered by such Rightholder, the payment will be applied, until the Basic Subscription Right is depleted, to subscribe for shares of Common Stock. Any excess payment remaining after the foregoing allocation will be returned to the Rightholder as soon as practicable by mail, without interest or deduction. 8. WITHDRAWAL OF RIGHTS OFFERING. The Company may withdraw the offering of Rights at any time prior to or on the Expiration Date for any reason. Upon written notice of withdrawal by the Company to the Subscription Agent, the Subscription Agent shall cancel all Subscription Certificates, and any funds received from Rightholders for the exercise of their Rights shall be returned to the Rightholders as soon as practicable by mail, without interest or penalty. 9. PAYMENT OF TAXES. The Company will pay all documentary stamp taxes attributable to the initial issuance of Rights and of Shares upon the exercise of Rights; provided, that the Company shall not be required to pay any tax or taxes which may be payable in respect of any transfer involved in the issue of any Subscription Certificates or any certificates for Shares in a name other than the registered holder of a Subscription Certificate surrendered upon the exercise of a Right, and the Company shall not be required to issue or deliver such certificates unless or until the person or persons requesting the issuance thereof shall have paid to the Company the amount of such tax or shall have established 5 6 to the satisfaction of the Company that such tax has been paid or adequate provision has been made for the payment thereof. 10. MUTILATED OR MISSING SUBSCRIPTION CERTIFICATES. If any of the Subscription Certificates shall be mutilated, lost, stolen or destroyed, the Company may in its discretion issue, and the Subscription Agent shall deliver, in exchange and substitution for and upon cancellation of the mutilated Subscription Certificate, or in lieu of and substitution for the Subscription Certificate lost, stolen or destroyed, a new Subscription Certificate of like tenor and representing an equivalent number of Rights, but only upon receipt of evidence satisfactory to the Company and the Subscription Agent of such loss, theft or destruction of such Subscription Certificate and indemnity or bond, if requested, also satisfactory to them. Applicants for such substitute Subscription Certificates shall also comply with such other reasonable regulations and pay such other reasonable charges as the Company or the Subscription Agent may prescribe. 11. RESERVATION OF SHARES. For the purpose of enabling it to satisfy any obligation to issue Shares upon exercise of Rights, the Company will at all times through the Close of Business on the Expiration Date, reserve and keep available, free from preemptive rights and out of its aggregate authorized but unissued shares of Common Stock, the number of Shares deliverable upon the exercise of all outstanding Rights (excluding the Rights accompanying 1,086,266 Shares issued to Solidus pursuant to the Purchase Agreement), and the Company will authorize and direct the Transfer Agent at all times to reserve such number of authorized and unissued shares of Common Stock as shall be required for such purpose. Before taking any action that would cause an adjustment pursuant to Section 13(b) reducing the Subscription Price below the then par value (if any) of the Shares issuable upon exercise of the Rights, the Company will take any corporate action that may, in the opinion of its counsel, be necessary in order that the Company may validly and legally issue fully paid and nonassessable Shares at the Subscription Price as so adjusted. The Company covenants that all Shares issued upon exercise of the Rights will, upon issuance in accordance with the terms of this Agreement, be fully paid and nonassessable and free from all liens, charges and security interests created by or imposed upon the Company with respect to the issuance thereof. 12. REGISTRATION OF SHARES. The Company has filed with the SEC a Registration Statement on Form S-3 including the Prospectus which has been or will be declared effective. The Company will use its best efforts to keep the Registration Statement continuously effective from the date hereof through the Close of Business ten (10) business days following the Expiration Date. So long as any unexpired Rights 6 7 remain outstanding, the Company will take all necessary action to obtain and keep effective any and all permits, consents and approvals of government agencies and authorities and to make filings under federal and state securities acts and laws, which may be or become necessary in connection with the issuance and delivery of the Subscription Certificates, the exercise of the Rights and the issuance, sale and delivery of the Shares issued upon exercise of Rights. 13. ADJUSTMENT OF SUBSCRIPTION PRICE AND NUMBER OF SHARES PURCHASABLE OR NUMBER OF RIGHTS. (a) Except as provided in subsection (b) below, the Subscription Price and the number of Shares to be purchased upon the exercise of each Right shall not be adjusted during the term of the offering of the Rights or upon exercise of any Right or Rights. (b) If the Company shall (i) pay a dividend on its shares of Common Stock in shares of Common Stock, (ii) subdivide its outstanding shares of Common Stock, (iii) combine its outstanding shares of Common Stock into a smaller number of shares of Common Stock or (iv) reclassify the Common Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing corporation), the number of Shares to be purchased upon exercise of each Right immediately prior thereto shall be adjusted so that the holder of each Right shall be entitled upon exercise to receive the kind and number of Shares or other securities of the Company which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such Right been exercised immediately prior to the happening of such event or any record date with respect thereto. An adjustment made pursuant to this subparagraph (b) shall become effective immediately after the effective date of such event retroactive to the record date, if any, for such event. In addition, in the event of any reclassification of the Common Stock, references in this Agreement to Common Stock shall thereafter be deemed to refer to the securities into which the Common Stock shall have been reclassified. (c) In case of any consolidation of the Company with or merger of the Company into another corporation or in case of any sale or conveyance to another corporation of the property of the Company as an entirety or substantially as an entirety or the Company is a party to a merger or binding share exchange which reclassifies or changes its outstanding Common Stock, the Company or such successor or purchasing corporation, as the case may be, shall execute with the Subscription Agent an agreement, in form and substance substantially equivalent to this Agreement, that each holder of a Subscription Certificate shall have the right thereafter, subject to terms and conditions substantially equivalent to those contained in this Agreement, upon payment of the Subscription Price in effect immediately prior to such action to purchase upon exercise of each Right the kind and amount of shares and other securities and property which such holder would have owned or have been entitled to receive after the happening of such consolidation, merger, sale or conveyance had such Right been exercised immediately prior to such action. The Company shall mail by first-class mail, postage prepaid, to each registered holder of a Right, notice of the execution of any such agreement. Such agreement shall provide for adjustments, which 7 8 shall be as nearly equivalent as may be practicable to the adjustments provided for in this Section 13. The provisions of this subparagraph (c) shall similarly apply to successive consolidations, mergers, sales or conveyances. The Subscription Agent shall be under no duty or responsibility to determine the correctness of any provisions contained in any such agreement relating either to the kind or amount of shares of stock or other securities or property receivable upon exercise of Rights or with respect to the method employed and provided therein for any adjustments and shall be entitled to rely upon the provisions contained in any such agreement. 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES. The Company shall issue 1.0 Right for each share of Common Stock held by a Record Holder on the Record Date. The Company shall not distribute fractional Rights or Subscription Certificates that evidence fractional Rights or are exercisable for the purchase of fractional shares. The number of Rights to be distributed to each Record Holder will be rounded up to the nearest whole number. Each Right will be exercisable for 0.2 share of Common Stock, rounding up any remaining fractional share to the nearest whole number of shares. 15. NOTICES TO RIGHTHOLDERS. If, prior to the Expiration Date: (a) the Company shall declare any dividend payable in any securities upon its shares of Common Stock or make any distribution (other than a cash dividend declared in the ordinary course) to the holders of its shares of Common Stock, or (b) the Company shall offer to the holders of its shares of Common Stock any additional shares of Common Stock or securities convertible or exchangeable into shares of Common Stock or any right to subscribe for or purchase Common Stock, or (c) there shall be a dissolution, liquidation or winding up of the Company (other than in connection with a consolidation, merger or sale of all or substantially all of its property, assets and business as an entirety), (d) then the Company shall (i) cause written notice of such event to be filed with the Subscription Agent and shall cause written notice of such event to be given to each of the registered holders of the Subscription Certificates at such holder's address appearing on the Rights Register, by first-class mail, postage prepaid, and (ii) make a public announcement in a daily morning English language newspaper of general circulation, of such event, such giving of notice and publication to be completed at least ten (10) calendar days (or twenty (20) calendar days in any case specified in clause (c) above) prior to the date fixed as a record date or the date of closing the transfer books for the determination of the stockholders entitled to such dividend, distribution or subscription rights, or for the determination of stockholders entitled to vote on such proposed dissolution, liquidation or winding up. Such notice shall specify such record date or the date of closing the transfer 8 9 books, as the case may be. The failure to give the notice required by this Section 15 or any defect therein shall not affect the legality or validity of any dividend, distribution, right, option, warrant, dissolution, liquidation or winding up or the vote upon or any other action taken in connection therewith. 16. MERGER, CONSOLIDATION OR CHANGE OF NAME OF SUBSCRIPTION AGENT. Any corporation into which the Subscription Agent may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Subscription Agent shall be a party, or any corporation succeeding to the shareholder services business of the Subscription Agent, shall be the successor to the Subscription Agent hereunder without the execution or filing of any paper or any further act on the part of any of the parties hereto, provided that such corporation would be eligible for appointment as a successor Subscription Agent under the provisions of Section 18. 17. SUBSCRIPTION AGENT. The Subscription Agent undertakes the duties and obligations imposed by this Agreement upon the following terms and conditions, by all of which the Company and the holders of Subscription Certificates, by their acceptance thereof, shall be bound: (a) The Subscription Agent shall not be responsible for any failure of the Company to comply with any of the covenants contained in this Agreement or in the Subscription Certificates to be complied with by the Company nor shall it at any time be under any duty or responsibility to any holder of a Right to make or cause to be made any adjustment in the Subscription Price or in the number of Shares issuable upon exercise of any Subscription (except as instructed by the Company) (b) The Company agrees to indemnify the Subscription Agent and save it harmless against any and all losses, liabilities and expenses, including judgments, costs and reasonable counsel fees and expenses, for anything done or omitted by the Subscription Agent arising out of or in connection with this Agreement except as a result of its gross negligence or bad faith. (c) The Company agrees that it will perform, execute, acknowledge and deliver or cause to be performed, executed, acknowledged and delivered all such further and other acts, instruments and assurances as may reasonably be required by the Subscription Agent for the carrying out or performing the provisions of this Agreement. (d) The Subscription Agent is hereby authorized and directed to accept instructions with respect to the performance of its duties hereunder from Lonnie J. Stout II, President and Chief Executive Officer; Mark A. Parkey, Vice President; and R. Gregory Lewis, Vice-President, Chief Financial Officer and Secretary, and to apply to such officers for advice or instructions in connection with its duties, and shall not be liable for any action taken or suffered to be taken by it in good faith in accordance with instructions of any such officer or in good faith 9 10 reliance upon any statement signed by any one of such officers of the Company with respect to any fact or matter (unless other evidence in respect thereof is herein specifically prescribed) which may be deemed to be conclusively proved and established by such signed statement. 18. CHANGE OF SUBSCRIPTION AGENT. If the Subscription Agent shall resign (such resignation to become effective not earlier than sixty (60) days after the giving of written notice thereof to the Company and the registered holders of Subscription Certificates) or shall become incapable of acting as Subscription Agent or if the Board of Directors of the Company shall by resolution remove the Subscription Agent (such removal to become effective not earlier than thirty (30) days after the filing of a certified copy of such resolution with the Subscription Agent and the giving of written notice of such removal to the registered holders of Subscription Certificates), the Company shall appoint a successor to the Subscription Agent. If the Company shall fail to make such appointment within a period of thirty (30) days after such removal or after it has been so notified in writing of such resignation or incapacity by the Subscription Agent or by the registered holder of a Subscription Certificate (in the case of incapacity), then either the Subscription Agent or the registered holder of any Subscription Certificate may apply to any court of competent jurisdiction for the appointment of a successor to the Subscription Agent. Pending appointment of a successor to the Subscription Agent, either by the Company or by such a court, the duties of the Subscription Agent shall be carried out by the Company. Any successor Subscription Agent, whether appointed by the Company or by such a court, shall be a bank or trust company, in good standing, incorporated under the laws of any state or of the United States of America. As soon as practicable after appointment of the successor Subscription Agent, the Company shall cause written notice of the change in the Subscription Agent to be given to each of the registered holders of the Subscription Certificates at such holder's address appearing on the Rights Register. After appointment, the successor Subscription Agent shall be vested with the same powers, rights, duties and responsibilities as if it had been originally named as Subscription Agent without further act or deed. The former Subscription Agent shall deliver and transfer to the successor Subscription Agent any property at the time held by it hereunder and execute and deliver, at the expense of the Company, any further assurance, conveyance, act or deed necessary for the purpose. Failure to give any notice provided for in this Section 18 or any defect therein, shall not affect the legality or validity of the removal of the Subscription Agent or the appointment of a successor Subscription Agent, as the case may be. 19. RIGHTHOLDER NOT DEEMED A STOCKHOLDER. Nothing contained in this Agreement or in any of the Subscription Certificates shall be construed as conferring upon the holders thereof the right to vote or to receive dividends or to consent or to receive notice as stockholders in respect of the meetings of stockholders or for the election of directors of the Company or any other matter, or any rights whatsoever as stockholders of the Company. 10 11 20. NOTICES TO COMPANY AND SUBSCRIPTION AGENT. All notices, consents, waivers and other communications under this Agreement must be in writing and will be deemed to have been duly given when (a) delivered by hand (with written confirmation of receipt), (b) sent by telecopier (with written confirmation of receipt) provided that a copy is mailed by registered mail, return receipt requested, or (c) when received by the addressee, if sent by a nationally recognized overnight delivery service (receipt requested), in each case to the appropriate addresses and telecopier numbers set forth below (or to such other addresses and telecopier numbers as a party may designate by notice to the other parties): J. Alexander's Corporation 3401 West End Avenue Nashville, Tennessee 37203 Attention: R. Gregory Lewis Telecopier: (615) 269-1959 If the Company shall fail to maintain such office or agency or shall fail to give such notice of any change in the location thereof, presentation may be made and notices and demands may be served at the principal office of the Subscription Agent. Any notice pursuant to this Agreement to be given by the Company or by any registered holder of any Subscription Certificate to the Subscription Agent shall be sufficiently given if sent by first-class mail, postage prepaid, addressed (until another address is filed in writing by the Subscription Agent with the Company), as follows: SunTrust Bank, Nashville, N.A. Corporate Trust Department, Sixth Floor P.O. Box 305110 Nashville, Tennessee 37230 Attention: Donna Williams Kyle Burchard Telecopier: (615) 748-5331 The Subscription Agent maintains a Subscription Agent Office at 424 Church Street, SunTrust Financial Center, Sixth Floor, Nashville, Tennessee 37219. 21. SUPPLEMENTS AND AMENDMENTS. The Company and the Subscription Agent may from time to time supplement or amend this Agreement without the approval of any holders of Subscription Certificates in order to cure any ambiguity, manifest error or other mistake in this Agreement, or to correct or supplement any provision contained herein that may be defective or inconsistent with any other provision herein or in the Registration Statement, or to make any other provisions in regard to matters or questions arising hereunder that the Company and the Subscription Agent may deem necessary or desirable and that shall not adversely affect, alter or change the interests of the holders of the Rights in any material respect. Any supplement or amendment of this Agreement which may not be made by the Company and the Subscription Agent without the approval of holders of Subscription Certificates pursuant to the preceding paragraph shall require the approval of the holders of Subscription Certificates entitled to purchase upon exercise thereof a majority of the Shares which may be purchased upon 11 12 the exercise of all outstanding Subscription Certificates at the time that such amendment or supplement is to be made. Notwithstanding the foregoing, any amendment or supplement to this Agreement which would provide for an adjustment to either (i) the number of Shares purchasable upon exercise of a Right or (ii) the exercise price for which Shares are purchasable upon exercise of a Right, in either case, in a manner not provided for in this agreement and in a manner that would have a substantial negative impact on the holders of Subscription Certificates, then such amendment or supplement shall require the consent of the holders of all Subscription Certificates. 22. SUCCESSORS. All the covenants and provisions of this Agreement by or for the benefit of the Company or the Subscription Agent shall bind and inure to the benefit of their respective successors and assigns hereunder. 23. TERMINATION. This Agreement shall terminate at the Close of Business on the date which is fifteen (15) New York Stock Exchange trading days after the Expiration Date. Upon termination of the Agreement, the Subscription Agent shall send to the Company all canceled Subscription Certificates and related documentation as required by applicable law. 24. GOVERNING LAW. This Agreement and each Subscription Certificate issued hereunder shall be deemed to be a contract made under the laws of the State of Tennessee and for all purposes shall be construed in accordance with the internal laws of the State of Tennessee without regard to principles of conflict of law or choice of laws of the State of Tennessee or any other jurisdiction which would cause the application of any laws other than of the State of Tennessee. 25. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall be construed to give to any person or corporation other than the Company, the Subscription Agent and the registered holders of the Subscription Certificates any legal or equitable right, remedy or claim under this Agreement, and this Agreement shall be for the sole and exclusive benefit of the Company, the Subscription Agent and the registered holders of the Subscription Certificates. 26. COUNTERPARTS. This Agreement may be executed in a number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and such counterparts shall together constitute but one and the same instrument. 27. HEADINGS. The headings of sections of this Agreement have been inserted for convenience of reference only, are not to be considered a part hereof and shall in no way modify or restrict any of the terms or provisions hereof. 12 13 IN WITNESS WHEREOF the parties hereto have caused this Rights Agreement to be executed and delivered as of the day and year first above written. J. ALEXANDER'S CORPORATION By: /s/ R. Gregory Lewis ------------------------------------ Name: R. Gregory Lewis Title: Vice President, Chief Financial Officer and Secretary SUNTRUST BANK, NASHVILLE, N.A. By: /s/ Donna Williams ------------------------------------ Name: Donna Williams Title: Vice President 13 EX-5 3 OPINION OF BASS BERRY & SIMS PLC 1 EXHIBIT 5 B A S S, B E R R Y & S I M S P L C A PROFESSIONAL LIMITED LIABILITY COMPANY ATTORNEYS AT LAW 2700 FIRST AMERICAN CENTER 1700 RIVERVIEW TOWER NASHVILLE, TENNESSEE 37238-2700 POST OFFICE BOX 1509 TELEPHONE (615) 742-6200 KNOXVILLE, TENNESSEE 37901-1509 TELECOPIER (615) 742-6293 TELEPHONE (423) 521-6200 TELECOPIER (423) 521-6234 April 30, 1999 J. Alexander's Corporation P.O. Box 24300 3401 West End Avenue Nashville, Tennessee 37203 Re: Registration Statement on Form S-3 Ladies and Gentlemen: We have acted as your counsel in connection with your preparation of a Registration Statement on Form S-3 (the "Registration Statement") initially filed by you with the Securities and Exchange Commission (the "Commission") on March 23, 1999, as amended, covering 1,089,067 shares of common stock, par value $.05 per share (the "Common Stock"), of J. Alexander's Corporation (the "Company") issuable upon the exercise of 5,445,335 rights to purchase 0.2 share of common stock. In connection with this opinion, we have examined and relied upon such records, documents, certificates, and other instruments as in our judgment are necessary or appropriate in order to express the opinions hereinafter set forth and have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals, and the conformity to original documents of all documents submitted to us as certified or photostatic copies. Based on the foregoing and such other matters as we have deemed relevant, we are of the opinion that the shares of Common Stock to be issued by the Company when issued and delivered against receipt by the Company of the agreed consideration therefor, will be, validly issued, fully paid, and nonassessable. We hereby consent to the reference to our law firm in the Registration Statement under the caption "Legal Matters" and filing of this opinion with the Commission as Exhibit 5 to the Registration Statement. Very truly yours, /s/ Bass, Berry & Sims PLC EX-8 4 OPINION OF BASS BERRY & SIMS LLP 1 EXHIBIT 8 [BASS, BERRY & SIMS LETTERHEAD] April 30, 1999 J. Alexander's Corporation 3401 West End Avenue Nashville, Tennessee Re: Distribution of rights to purchase shares of common stock Ladies and Gentlemen: We have acted as counsel for J. Alexander's Corporation, a Tennessee corporation (the "Company"), in connection with (i) the proposed issuance of rights (the "Rights") to acquire up to 1,089,067 shares of the Company's common stock, par value $.05 per share (the "Common Stock"); and (ii) the proposed issuance of up to 1,089,067 shares of Common Stock upon exercise of such rights, as described in the Company's Prospectus (the "Prospectus") contained in the Registration Statement on Form S-3 (the "Registration Statement") filed with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the "Securities Act"). As counsel for the Company, we have examined copies of the Registration Statement and such other certificates and documents as we have deemed relevant and necessary for the opinion hereinafter set forth. The opinion set forth below assumes the accuracy of the statements and facts described in the Prospectus and that the offering of the Rights is consummated in the manner set forth therein. Based upon and subject to the foregoing, in our opinion the discussion of the material federal income tax consequences of the rights offering set forth in the Prospectus under the captions "Questions and Answers About the Rights Offering--What Are the Federal Income Tax Consequences of Exercising My Rights?" and "Federal Income Tax Considerations--Tax Consequences to Shareholders," subject to the limitations and conditions set forth therein, addresses accurately the material federal income tax consequences of the rights offering and of an investment in the common stock obtained pursuant to exercise of the Rights. The foregoing opinion is based on current provisions of the Internal Revenue Code of 1986, as amended, the Treasury Regulations promulgated thereunder, published pronouncements of the Internal Revenue Service and case law, all of which are subject to change. No opinion is expressed concerning any matters other than those specifically referred to herein. This opinion does not apply to particular types of shareholders subject to special tax treatment under federal income tax law, such as banks, insurance companies and foreign individuals and entities. In 2 addition, this opinion does not address the tax consequences of the rights offering under applicable state, local or foreign tax laws. The opinion assumes that the common stock held by shareholders, and the rights and additional shares issued to them as a result of the rights offering, constitute capital assets. We consent to the filing of this opinion letter as Exhibit 8 to the Registration Statement and to the reference to our name in the Prospectus constituting a part of such Registration Statement under the heading "Legal Matters". In giving such consent, we do not hereby admit that we come within the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations of the Securities and Exchange Commission thereunder. We have rendered the foregoing opinion for the use of J. Alexander's Corporation and its shareholders; the views herein may not be relied upon or furnished to any other person without our prior written consent. Very truly yours, /s/ BASS, BERRY & SIMS PLC 2 EX-23.2 5 CONSENT OF ERNST & YOUNG LLP 1 EXHIBIT 23.2 CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS We consent to the reference to our firm under the caption "Experts" in the Registration Statement (Form S-3) and related Prospectus of J. Alexander's Corporation for the registration of 1,089,067 shares of its common stock issuable upon the exercise of 5,445,335 rights to purchase shares of common stock and to the incorporation by reference therein of our report dated March 22, 1999, with respect to the consolidated financial statements and schedule of J. Alexander's Corporation included in its Annual Report (Form 10-K) for the year ended January 3, 1999, filed with the Securities and Exchange Commission. /s/ Ernst & Young LLP Nashville, Tennessee April 30, 1999 EX-99.1 6 FORM OF SUBSCRIPTION CERTIFICATE 1 EXHIBIT 99.1 VOID IF NOT RECEIVED BY THE SUBSCRIPTION AGENT BEFORE 5:00 PM [____________________] TIME ON [___________] * J. ALEXANDER'S CORPORATION SUBSCRIPTION CERTIFICATE TO BE USED TO SUBSCRIBE FOR SHARES OF COMMON STOCK DEAR SHAREHOLDER, As a registered owner of this Subscription Certificate, you are entitled to purchase shares of the common stock of J. Alexander's Corporation pursuant to the terms and conditions set forth in the enclosed Prospectus which describes the Rights Offering. This is a non-transferable right, and only you can exercise it. You will receive 1.0 right for each share of common stock of record you held on May __, 1999 (the "Record Date"). Each right entitles you to purchase 0.2 share of common stock for $3.75 per share. For every five rights you receive, you will be entitled to purchase 1 new share of common stock. See the box below which calculates how many shares you are entitled to purchase through the offering (Basic Subscription Right). As an example, if you owned 100 shares on May __, 1999, you would be entitled to purchase 20 new shares of J. Alexander's Corporation's common stock. No fractional shares will be issued; any remaining fractional share will be rounded up to the nearest whole number of shares. The new shares of common stock will be issued as soon as practicable after the expiration of the rights exercise period on June ___, 1999. - -------------------------------------------------------------------------------- FULL BASIC SUBSCRIPTION RIGHT Number of shares you owned on May __, 1999 ______ * 0.2 = ______ shares you are entitled to purchase (round up fractions of shares) - -------------------------------------------------------------------------------- J. Alexander's has caused the facsimile signatures of its duly authorized officers to be printed below. Vice President, Chief Financial Chairman, President and Officer and Secretary Chief Executive Officer YOU HAVE THREE CHOICES: 1. You can subscribe for all the new shares listed in the box above (the "Basic Subscription Right"), 2. You can subscribe for less than the number of new shares listed in the box above, or 3. If you do not wish to purchase new shares, disregard this material. ENTER ONE CHOICE ONLY: [ ] 1. I wish to apply for the Basic Subscription Right. Enter number of shares ____________ x $3.75 = Total Due $_____________ [ ] 2. I wish to apply for less than the number of new shares listed above Enter number of shares ____________ x $3.75 = Total Due $_____________ Control No._______________ Account No._______________ 1 2 SUBSCRIPTION RIGHTS EXERCISE INSTRUCTIONS REFER TO ACCOMPANYING PROSPECTUS FOR DETAILED INSTRUCTIONS IN ORDER TO PURCHASE SHARES OF J. ALEXANDER'S CORPORATION PURSUANT TO THE RIGHTS OFFERING, PLEASE BE SURE TO: 1. COMPLETE THE INFORMATION ON THE FRONT OF THIS CERTIFICATE. 2. SIGN BELOW. 3. RETURN THIS COMPLETED AND SIGNED CERTIFICATE TOGETHER WITH PAYMENT AS CALCULATED ON THE FRONT OF THIS CERTIFICATE TO SUNTRUST BANK, NASHVILLE, N.A., IN THE ENVELOPE PROVIDED BEFORE 5:00 P.M., CENTRAL DAYLIGHT TIME ON JUNE ___, 1999* (THE "EXPIRATION DATE"). REMEMBER, FULL PAYMENT MUST BE MADE IN UNITED STATES DOLLARS BY MONEY ORDER OR CHECK DRAWN ON A BANK LOCATED IN THE UNITED STATES AND MADE PAYABLE TO "SUNTRUST BANK, NASHVILLE, N.A., AS SUBSCRIPTION AGENT" OR BY WIRE TRANSFER. NO THIRD PARTY CHECKS WILL BE ACCEPTED. 4. ALTERNATIVELY, YOU MAY CONTACT YOUR BROKER AND COMPLETE A NOTICE OF GUARANTEED DELIVERY FORM. J. ALEXANDER'S CORPORATION SIGNATURE I acknowledge that I have received the Prospectus for this rights offering, and I hereby irrevocably subscribe for the number of new shares indicated on the front of this certificate on the terms and conditions specified in the Prospectus. I hereby agree that if I fail to pay in full for the shares for which I have subscribed, J. Alexander's Corporation may exercise any of the remedies provided for in the Prospectus. Print Name of Subscriber(s) ______________________________________ Signature of Subscriber(s) ______________________________________ Signature Guarantee if required ______________________________________ (Please sign here) ______________________________________ Telephone number (including area code):_________________________ If you wish to have your shares or refund check (if any) delivered to another address other than that listed on this subscription certificate, you must have your signature guaranteed. Appropriate signature guarantors include: banks and savings associations, credit unions, member firms of a national securities exchange, municipal securities dealers and government securities dealers. Please provide delivery address below and please note if it is a permanent change. Other Address___________________________________________________________________ * Unless offer is extended 2 EX-99.2 7 FORM OF NOTICE OF GUARANTEED DELIVERY 1 EXHIBIT 99.2 FORM OF NOTICE OF GUARANTEED DELIVERY FOR SHARES OF COMMON STOCK OF J. ALEXANDER'S CORPORATION SUBSCRIBED FOR UNDER THE BASIC SUBSCRIPTION RIGHT As set forth in the Prospectus dated ___________, 1999 under "The Rights Offering - Guaranteed Delivery Procedures," this form or one substantially equivalent hereto may be used as a means of effecting subscription and payment for all shares of J. Alexander's Corporation's common stock subscribed for pursuant to the Basic Subscription Right. Such form may be delivered by hand or sent by facsimile transmission, overnight courier or mail to the Subscription Agent. The Subscription Agent is: SunTrust Bank, Nashville, N.A. Attention: Corporate Trust Department Donna Williams; Kyle Burchard By Mail: By Facsimile: By Hand, Express Mail or SunTrust Financial Center (Telecopier): Overnight Courier: Sixth Floor (615) 748-5331 SunTrust Financial Center P. O. Box 305110 Confirm by Telephone: Sixth Floor Nashville, Tennessee, 37230 (615) 748-4745 424 Church Street Nashville, TN 37219
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS, OR TRANSMISSION OF INSTRUCTIONS VIA A TELECOPY OR FACSIMILE NUMBER, OTHER THAN AS SET FORTH ABOVE, DOES NOT CONSTITUTE A VALID DELIVERY. The member firm of a national securities exchange or the National Association of Securities Dealers, Inc., or bank or trust company having an office or correspondent in the United States which completes this form must communicate the guarantee and the number of shares subscribed for to the Subscription Agent and must deliver this Notice of Guaranteed Delivery, guaranteeing delivery of (i) payment in full for all subscribed shares at a price of $3.75 per share and (ii) a properly completed and signed copy of the Subscription Certificate, to the Subscription Agent prior to 5:00 p.m., Central Daylight Time, on the Expiration Date. Failure to do so will result in a forfeiture of the Rights. GUARANTEE The undersigned, a member firm of a national securities exchange or the National Association of Securities Dealers, Inc. or a bank or trust company, having an office or correspondent in the United States, guarantees delivery to the Subscription Agent by the close of business 5:00 p.m., Central Daylight Time on [___________], 1999 of (A) a properly completed and executed Subscription Certificate, and (B) payment of the full subscription price for all subscribed shares at a price of $3.75, as subscription for such shares is indicated herein or in the Subscription Certificate. No. of Shares of Common Stock _____________ * $3.75 = Total Payment Due $______________ 2 METHOD OF DELIVERY (CIRCLE ONE) A. Through the Depository Trust Company ("DTC") B. Direct to the Subscription Agent Please assign above a unique control number for each guarantee submitted. This number should be referenced on any direct delivery or any delivery through DTC. - ------------------------------------ ---------------------------------- Name of Firm Authorized Signature - ------------------------------------ ---------------------------------- Address Title - ------------------------------------ ---------------------------------- Zip Code Name (Please Type or Print) - ------------------------------------ ---------------------------------- Telephone Number Date - ------------------------------------ DTC Participant Number EX-99.3 8 FORM OF LETTER TO SHAREHOLDER 1 EXHIBIT 99.3 [LETTERHEAD OF J. ALEXANDER'S CORPORATION] - -------------------------------------------------------------------------------- THE RIGHTS OFFERING WILL EXPIRE AT 5:00 P.M. MIDNIGHT, CENTRAL DAYLIGHT TIME, ON JUNE , 1999 UNLESS EXTENDED OR EARLIER TERMINATED. J. ALEXANDER'S MAY WITHDRAW THE RIGHTS OFFERING AT ANY TIME PRIOR TO 5:00 PM CENTRAL DAYLIGHT TIME ON JUNE ,1999. J. ALEXANDER'S RESERVES THE RIGHT TO EXTEND THE OFFER BY UP TO TEN BUSINESS DAYS AT ANY TIME PRIOR TO THE EXPIRATION OF THE RIGHTS. - -------------------------------------------------------------------------------- May __, 1999 Dear Shareholder: Enclosed are the Prospectus and other materials relating to the rights offering by J. Alexander's Corporation (the "Company"). Please carefully review the Prospectus, which describes how you can participate in the rights offering. You will be able to exercise your rights to purchase additional shares only during a limited period. You will find answers to some frequently asked questions about the rights offering beginning on page __ of the Prospectus. You should also refer to the detailed description of the subscription procedures in the Prospectus, which tells how you can exercise your rights. SUMMARY OF THE TERMS OF THE OFFERING . You will receive 1.0 non-transferable right for each share of the Company's common stock you owned on May __, 1999. . For each right you exercise, you may purchase 0.2 share of common stock at the Subscription Price of $3.75 per share. You will not be entitled to purchase fractional shares, but the Company will round any remaining fractional share you are entitled to purchase up to the nearest whole number of shares. . The rights offering expires at 5:00 p.m., Central Daylight Time, on June __, 1999. If you do not exercise your rights before that date, they will expire and will have no monetary value. The Company may withdraw the rights offering at any time before the rights expire. In addition, at any time before the rights expire, the Company may extend the rights offering by up to ten business days. If your shares are held in your name, a Subscription Certificate is enclosed. If your shares are held in the name of your bank or broker, you must contact your bank or broker if you wish to participate in this offering. If you do not exercise your rights, your ownership in the Company may be diluted. Please see page __ of the Prospectus for a discussion of dilution and other risk factors. If you have any questions concerning the rights offering, please feel free to contact R. Gregory Lewis, the Company's Chief Financial Officer, at (615) 269-1900. Sincerely, Lonnie J. Stout II Chairman, President and Chief Executive Officer EX-99.4 9 FORM OF LETTER TO BROKER 1 EXHIBIT 99.4 J. ALEXANDER'S CORPORATION 3401 WEST END AVENUE NASHVILLE, TENNESSEE 37203 - -------------------------------------------------------------------------------- THE RIGHTS OFFERING WILL EXPIRE AT 5:00 P.M. MIDNIGHT, CENTRAL DAYLIGHT TIME, ON JUNE , 1999 UNLESS EXTENDED OR EARLIER TERMINATED. J. ALEXANDER'S MAY WITHDRAW THE RIGHTS OFFERING AT ANY TIME PRIOR TO 5:00 PM CENTRAL DAYLIGHT TIME ON JUNE ,1999. J. ALEXANDER'S RESERVES THE RIGHT TO EXTEND THE OFFER BY UP TO TEN BUSINESS DAYS AT ANY TIME PRIOR TO THE EXPIRATION OF THE RIGHTS. - -------------------------------------------------------------------------------- May __, 1999 To: Securities Dealers, Commercial Banks, Trust Companies, and Other Nominees: This letter is being distributed to securities dealers, commercial banks, trust companies and other nominees in connection with the offering by J. Alexander's Corporation ("J. Alexander's" or "the Company") of an aggregate of approximately 1,089,067 shares of Common Stock, par value $.05 per share ("Common Stock") of J. Alexander's, at a subscription price of $3.75 per share of Common Stock ("Subscription Price"), pursuant to the exercise of non-transferable rights initially distributed to all holders of record of shares of J. Alexander's Common Stock as of the close of business on May __, 1999 (the "Record Date"). The rights are described in the enclosed Prospectus and evidenced by a Subscription Certificate registered in your name or in the name of your nominee. Each beneficial owner of shares of Common Stock registered in your name or the name of your nominee is entitled to 1 right for each share of Common Stock owned by such beneficial owner on the record date. Each right entitles the holder to purchase 0.2 share of Common Stock. Shareholders will not be entitled to purchase fractional shares, but instead the total number of shares of Common Stock that may be purchased will be rounded up to the nearest whole share. We are asking you to contact your clients for whom you hold shares of Common Stock registered in your name or in the name of your nominee to obtain instructions with respect to the rights. Enclosed are copies of the following documents: 1. Prospectus; 2. A letter from J. Alexander's to its shareholders; 3. Subscription Certificate(s) (if shares of Common Stock were registered in your name on the Record Date); 4. A form of Notice of Guaranteed Delivery for Subscription Certificates issued by J. Alexander's; 2 5. A form of letter which may be sent to your clients for whose account you hold shares of Common Stock in your name or in the name of a nominee, with space provided for obtaining such clients' instructions regarding the exercise of rights; and 6. A return envelope addressed to SunTrust Bank, Nashville, N.A., as Subscription Agent. Your prompt action is requested. The rights will expire at 5:00 P.M., Central Daylight Time, on _______, 1999, unless extended by J. Alexander's (as it may be extended, the "Expiration Date"). To exercise rights, properly completed and executed Subscription Certificates and payment in full for all rights exercised must be delivered to the Subscription Agent as indicated in the Prospectus prior to the Expiration Date, unless the guaranteed delivery procedures described in the Prospectus are followed. Additional copies of the enclosed materials may be obtained by contacting J. Alexander's at 3401 West End Avenue, Nashville, Tennessee 37203, (615) 269-1900. Sincerely, Lonnie J. Stout II Chairman, President and Chief Executive Officer EX-99.5 10 FORM OF BROKERS LETTER TO CLIENTS 1 EXHIBIT 99.5 J. ALEXANDER'S CORPORATION Rights Offering - -------------------------------------------------------------------------------- THE RIGHTS OFFERING WILL EXPIRE AT 5:00 P.M. MIDNIGHT, CENTRAL DAYLIGHT TIME, ON JUNE , 1999 UNLESS EXTENDED OR EARLIER TERMINATED. J. ALEXANDER'S MAY WITHDRAW THE RIGHTS OFFERING AT ANY TIME PRIOR TO 5:00 PM CENTRAL DAYLIGHT TIME ON JUNE , 1999. J. ALEXANDER'S RESERVES THE RIGHT TO EXTEND THE OFFER BY UP TO TEN BUSINESS DAYS AT ANY TIME PRIOR TO THE EXPIRATION OF THE RIGHTS. - -------------------------------------------------------------------------------- May ____, 1999 To Our Clients: Enclosed for your consideration is a Prospectus relating to the distribution of non-transferable rights by J. Alexander's Corporation, a Tennessee corporation, to owners of shares of J. Alexander's common stock. Under the terms of the rights offering, shareholders of J. Alexander's will each receive 1.0 non-transferable right for each share of common stock they own on May ____, 1999. Each right entitles the holder to purchase 0.2 share of common stock, at a price of $3.75 per share, rounding up any remaining fractional share to the nearest whole number of shares. When holders exercise their rights, that means they choose to purchase the shares of common stock that the rights entitle them to purchase. This material relating to the rights offering is being forwarded to you as the beneficial owner of the shares of J. Alexander's common stock carried by us for your account or benefit but not registered in your name. An exercise of rights distributed in the rights offering may only be made by us as the registered holder and pursuant to your instructions. Therefore, J. Alexander's urges beneficial owners of common stock registered in the name of a broker, dealer, commercial bank, trust company or other nominee to contact such registered holder promptly if they wish to exercise any rights in the rights offering. Accordingly, we request instructions as to whether you wish us to exercise any or all rights attributable to the J. Alexander's common stock held by us for your account. We urge you to read carefully the Prospectus and the other materials provided herewith before instructing us to exercise any rights. Once we exercise rights on your behalf, you cannot revoke the exercise, even if the trading price of J. Alexander's Common Stock falls. Your instructions should be forwarded as promptly as possible in order to permit us to exercise the rights and deliver the necessary documents on your behalf in accordance with the terms of the rights offering. The rights offering will expire at 5:00 p.m., Central Daylight Time, on June _____, 1999, unless extended by J. Alexander's. J. Alexander's may withdraw the rights offering at any time prior to 5:00 p.m., Central Daylight Time, on June _______, 1999. If you wish to exercise any or all of the rights distributed to you in the rights offering, please so instruct us by completing, executing and returning to us the instruction form that appears below. The 2 accompanying documentation is furnished to you for informational purposes only so that you can instruct us and may not be sent directly to J. Alexander's by you to exercise any rights attributable to common stock held by us and registered in your name for your account. INSTRUCTIONS - -------------------------------------------------------------------------------- FULL BASIC SUBSCRIPTION RIGHT Number of shares you owned on May __, 1999 ___________ * 0.2 = ________ shares you are entitled to purchase (round up fractions of shares) - -------------------------------------------------------------------------------- YOU HAVE THREE CHOICES: 1. You can subscribe for all the new shares listed in the box above (the "Basic Subscription Right"), 2. You can subscribe for less than the number of new shares listed in the box above, or 3. If you do not wish to purchase new shares, disregard this material. ENTER ONE CHOICE ONLY: [ ] 1. I wish to apply for the Basic Subscription Right. Enter number of shares ____________ x $3.75 = Total Due $____________ [ ] 2. I wish to apply for less than the number of new shares listed above. Enter number of shares ____________ x $3.75 = Total Due $____________ Signature(s) ____________________________________________________ Name(s) (Please Print) __________________________________________ Address _________________________________________________________ Zip Code ________________________________________________________ Area Code and Telephone No. _____________________________________ Tax Identification or Social Security No. _______________________ My Account Number With You ______________________________________ Date ____________________________________________________________ -----END PRIVACY-ENHANCED MESSAGE-----