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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 30, 1999
REGISTRATION NO. 333-74849
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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)
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TENNESSEE 5812 62-0854056
(State or other (Primary Standard (I.R.S. Employer
jurisdiction of Industrial
incorporation or Classification Code Identification No.)
organization) No.)
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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)
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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. [ ]
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CALCULATION OF REGISTRATION FEE
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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)
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Common Stock, $.05 par value per share(1).... 1,089,067 $3.75 $4,084,001 $1,136
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(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.
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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.
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<PAGE> 2
1,089,067 Shares of Common Stock
J. ALEXANDER'S CORPORATION
Subscription Price $3.75 Per Share
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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.
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NET PROCEEDS TO
SUBSCRIPTION PRICE J. ALEXANDER'S(1)
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Per Share............ $ 3.75 $ 3.75
Total.............. $4,084,001 $4,084,001
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(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.
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TABLE OF CONTENTS
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PAGE
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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
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PAGE
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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
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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.
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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.
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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.
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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.
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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
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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.
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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.
<TABLE>
<CAPTION>
AFTER THE
RIGHTS AFTER THE RIGHTS
OFFERING OFFERING
ASSUMING ASSUMING
BEFORE THE SHAREHOLDER SHAREHOLDER
RIGHTS EXERCISES EXERCISES NO
OFFERING ALL RIGHTS RIGHTS
---------- ----------- ----------------
<S> <C> <C> <C>
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%
</TABLE>
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
<PAGE> 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.
<TABLE>
<CAPTION>
FIRST QUARTER 1999 1998
------------- ----------- -----------
<S> <C> <C>
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
</TABLE>
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
<PAGE> 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
<PAGE> 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.
<TABLE>
<CAPTION>
JANUARY 3, 1999
------------------
AS
ACTUAL ADJUSTED
------- --------
(IN THOUSANDS)
<S> <C> <C>
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
======= =======
</TABLE>
- -------------------------
(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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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:
<TABLE>
<CAPTION>
U.S. MAIL BY COURIER OR OVERNIGHT DELIVERY
--------- --------------------------------
<S> <C>
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
</TABLE>
The Subscription Agent's telephone number is (615) 748-4745, and its facsimile
number is (615) 748-5331.
15
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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:
<TABLE>
<S> <C>
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
</TABLE>
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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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.
<TABLE>
<S> <C>
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
========
</TABLE>
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
<PAGE> 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
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
NO.---- -----------
<C> <C> <S>
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
</TABLE>
II-2
<PAGE> 30
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -----------
<C> <C> <S>
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
</TABLE>
- ---------------
* 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
<PAGE> 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.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
/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
</TABLE>
II-4
<PAGE> 32
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------ -----------
<C> <C> <S>
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
</TABLE>
<PAGE> 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.
<PAGE> 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
<PAGE> 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:
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(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
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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
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<PAGE> 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
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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
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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
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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
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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.
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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
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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.
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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
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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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<TABLE>
<S> <C> <C>
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
</TABLE>
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 $______________
<PAGE> 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
<PAGE> 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
<PAGE> 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;
<PAGE> 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
<PAGE> 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
<PAGE> 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 ____________________________________________________________
