Exhibit 10.02
Execution Copy
FIRST AMENDMENT TO
J. ALEXANDER’S CORPORATION
EMPLOYEE STOCK OWNERSHIP PLAN
(as amended and restated as of January 1, 2002)
     WHEREAS, J. Alexander’s Corporation, a Tennessee corporation (the
“Company”), maintains the J. Alexander’s Corporation Employee Stock Ownership
Plan (the “Plan”) to enable its eligible employees to share in the growth and
prosperity of the Company; and
     WHEREAS, the Company most recently has restated the Plan as of January 1,
2002 (the “2002 Restatement”), to incorporate four amendments to the previous
restatement and to facilitate making application to the Internal Revenue Service
for a determination letter in accordance with the five-year determination letter
cycle provided in Revenue Procedure 2005-66; and
     WHEREAS, in the last amendment to the previous restatement the Company
froze participation in the Plan so that new participants could not enter the
Plan after December 31, 2006; and
     WHEREAS, the Company has determined to reverse its decision to freeze
participation in the Plan and intends to make substantial and recurring
contributions to the Plan, including a contribution for the 2007 Plan Year; and
     WHEREAS, the Company desires to amend the 2002 Restatement (i) to allow new
participants to enter after December 31, 2006; (ii) to facilitate administration
of this Plan and the Company’s 401(k) plan (Savings Incentive Plan) by making
the eligibility rules consistent for both plans; (iii) to change the vesting
schedule for Employer non-elective contributions from five (5) year cliff
vesting to three (3) year cliff vesting as required by the Pension Protection
Act of

 

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2006 (the “PPA”); (iv) to permit non-spouse beneficiaries to make a direct
Rollover from the Plan as permitted by the PPA; (v) to change the definition of
covered compensation to include certain payments after termination of employment
as permitted under new IRS regulations; and (vi) to make changes in the rules
regarding limitation of benefits in conformity with final regulations issued in
April 2007 under Section 415 of the Code.
     NOW, THEREFORE, in consideration of the premises, effective as of
January 1, 2007, except for such other dates as may be herein noted, the Company
hereby amends the 2002 Restatement of the Plan in the following respects:
     1. Section 2.1(r) is amended by adding the following sentence at the end
thereof:
Compensation shall include amounts paid during the Plan Year prior to the date
that the Employee became a Participant.
     2. Effective January 1, 2008, Section 2.1(r) is amended to provide as
follows:
(r) Compensation. The total of all amounts paid for employment by the Employer
to or for the benefit of a Participant during the Plan Year (as shown on the
Form W-2 filed for federal income tax purposes), such as salary, bonus, wage,
commission, and overtime payments. Compensation shall not include any of the
following (even if includible in gross income);
(i) reimbursements or other expense allowances and moving expenses (including
indemnity payments for loss on sale of an Employee’s home);
(ii) fringe benefits (cash and non-cash), deferred compensation and welfare
benefits; and
(iii) any contribution made under this Plan or any other qualified retirement
plan (except as provided below).
Notwithstanding the foregoing, Compensation shall include (i) any salary
reduction or other elective deferrals to the Savings Incentive Plan, (ii) salary
reduction contributions or other elective deferrals under the Flexible Benefit
Plan, (iii) any other amount that is contributed or deferred at the election of
the Participant as described in Sections 125, 402(g)(3), 402(h)(1)(B) or 457(b)
of the Code, and (iv) elective amounts that are not includible in the gross
income of the Participant by reason of Section 132(f)(4) of the Code.
Compensation shall include amounts paid during the Plan Year prior to the date
that the Employee became a Participant.

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Compensation shall include payments made after the Participant’s “severance from
employment” (as defined in Section 1.415(a)-1(d)(3) of the Treasury
Regulations), provided that the compensation is paid by the later of (i) two and
one-half (21/2) months after severance from employment or (ii) the end of the
Plan Year in which severance from employment occurs, but only if the payment is
regular compensation for services during the Participant’s regular working
hours, or compensation for services outside the Participant’s regular working
hours (e.g., overtime or shift differential), commissions, bonuses, or other
similar payments and the payment would have been paid to the Participant prior
to a severance from employment if the Participant had continued in employment
with the Employer. Any payment after severance from employment that is not
described above in this paragraph shall not be included in Compensation.
Compensation in excess of the first $230,000 (for 2008, to be adjusted from time
to time pursuant to Section 401(a)(17)(B) of the Code) for any Participant shall
not be taken into account.
     3. Effective January 1, 2008, Section 2.1(v) is amended to provide as
follows:
(v) Distributee. A Distributee includes a Participant and Former Participant. In
addition, the Participant’s surviving spouse, non-spouse Beneficiary, and the
Participant’s spouse or former spouse who is the alternate payee under a
qualified domestic relations order, as defined in Section 414(p) of the Code,
are Distributees.
     4. Effective January 1, 2008, Section 2.1(z) is amended to provide as
follows:
(z) Eligible Retirement Plan. Any of the following:
(i) a qualified trust as described in Code Section 401(a) which is exempt from
tax under Code Section 501(a);
(ii) an individual retirement account as described in Code Section 408(a);
(iii) an individual retirement annuity as described in Code Section 408(a);
(iv) an annuity plan as described in Code Section 403(a);
(v) an annuity contract as described in Code Section 403(b); and
(vi) an eligible plan under Code Section 457(b) which is maintained by a state,
political subdivision of a state, or any agency or instrumentality of a state or
political subdivision of a state.

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The foregoing definition of “Eligible Retirement Plan” shall also apply in the
case of a distribution to a surviving spouse, to a non-spouse Beneficiary, or to
a spouse or former spouse who is the alternate payee under a qualified domestic
relations order as defined in Section 414(p) of the Code; provided, however,
that for a non-spouse Beneficiary, the term “Eligible Retirement Plan” shall
include only an individual retirement account as described in clause (ii) or an
individual retirement annuity as described in clause (iii).
     5. Effective for the Plan Year commencing on January 1, 2008,
Section 2.1(bbb) is amended to provide as follows:
(bbb) Section 415 Compensation. The total “wages” paid for employment by the
Employer (and all Affiliated Companies) to or for the benefit of a Participant
during the Plan Year as shown on the Form W-2 filed for federal income tax
purposes. For purposes of this determination, “wages” shall mean wages as
defined in Section 3401(a) of the Code for purposes of income tax withholding at
the source, and all other payments of compensation to the Employee by the
Employer for which the Employer is required to furnish the Employee a written
statement under Sections 6041(d), 6051(a)(3) and 6052 of the Code, but
determined without regard to any rules that limit the remuneration included in
wages based on the nature or location of the employment or the services
performed (such as the exception for agricultural labor in Section 3401(a)(2) of
the Code). The term “Section 415 Compensation” shall include (i) salary
reductions or elective deferrals to the Savings Incentive Plan, (ii) salary
reduction contributions or other elective deferrals under the Flexible Benefit
Plan, (iii) any other amount that is contributed or deferred at the election of
the Employee as described in Sections 125, 402(g)(3), 402(h)(1)(B) or 457(b) of
the Code, and (iv) elective amounts that are not includible in the gross income
of the Employee under Section 132(f)(4) of the Code.
Section 415 Compensation shall include payments made after the Participant’s
severance from employment, (as defined in Section 1.415(a)-1(d)(3) of the
Treasury Regulations), provided that the compensation is paid by the later of
(i) two and one-half (21/2) months after severance from employment or (ii) the
end of the Plan Year in which severance from employment occurs, but only if the
payment is regular compensation for services during the Participant’s regular
working hours, or compensation for services outside the Participant’s regular
working hours (e.g., overtime or shift differential), commissions, bonuses, or
other similar payments and the payment would have been paid to the Participant
prior to a severance from employment if the Participant had continued in
employment with the Employer. Any payment after severance from employment that
is not described above in this paragraph shall not be included in Section 415
Compensation.

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Section 415 Compensation in excess of $230,000 (for 2008, to be adjusted from
time to time pursuant to Section 401(a)(17)(B) of the Code) for any Participant
shall not be taken into account.
     6. Section 3.1 is amended to provide as follows:
3.1 Participation. Any Employee shall be eligible to participate in the Plan
upon completing one year of Eligibility Service and attaining age twenty-one
(21). The participation of such Employee shall commence on the January 1 or July
1 which first occurs after he meets these eligibility requirements. An Employee
otherwise entitled to commence participation on one of the above entry dates
shall not commence participation on that date if he terminates his employment
prior to that date, but such Employee shall, if he should be re-employed, be
treated in the same manner as a former Participant pursuant to Section 3.3.
     7. Section 5.2(g)(2) and (3) are amended to provide as follows:
(2) Except as provided in Section 5.2(g)(1) in the case of dividends used to
repay an Acquisition Loan and except as provided in Section 5.2(g)(3) with
respect to dividends received on Company Stock which is distributed, any cash
dividends received with respect to shares of Company Stock allocated to
Participants’ Company Stock Sub-Accounts or held in the Loan Suspense Account
shall be allocated among and credited to Cash Sub-Accounts of the Participants;
provided, however, that the dividends so allocated (whether paid with respect to
Company Stock allocated to Company Stock Sub-Accounts or held in the Loan
Suspense Account) shall be allocated among and credited to Cash Sub-Accounts,
pro rata, according to the number of shares of Company Stock held in the
respective Company Stock Sub-Accounts on the date the dividends are paid to the
Trust. Cash dividends on Company Stock otherwise not yet allocated to the
Company Stock Sub-Accounts of Participants shall be allocated for each Plan Year
as Income.
(3) No allocation of cash dividends on Company Stock, and no allocation of
Financed Shares released from the Loan Suspense Account by reason of such
dividends, shall be made to the Account of a Participant for a Plan Year to the
extent the Participant receives during that Plan Year a distribution of Company
Stock with regard to which the dividends were paid. Any such cash dividends or
Financed Shares released from the Loan Suspense Account by reason of such
dividends shall be included in the allocation to other Participants’ Cash
Sub-Accounts (i.e., Participants who did not receive during that Plan Year a
distribution of Company Stock with regard to which the dividends were paid) in
the same manner provided in Section 5.2(g)(2) for cash dividends received with
respect to shares allocated to their Company Stock Sub-Accounts.

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     8. Effective for the Plan Year commencing on January 1, 2008, Section 5.3
is amended to provide as follows:
5.3 Maximum Additions. Notwithstanding anything contained herein to the
contrary, the total Additions made to the Account of a Participant for any Plan
Year shall not exceed the lesser of $46,000 (for 2008, to be adjusted from time
to time pursuant to Section 415(d) of the Code) or 100 percent (100%) of the
Participant’s Section 415 Compensation for such Plan Year.
A restorative payment (as defined in Section 1.415(c)-1(b)(2)(ii)(C) of the
Treasury Regulations) shall not be considered as part of the annual Addition to
a Participant’s Account. A restorative payment is a payment to the Plan made to
restore losses to the Plan from actions by a fiduciary for which there is a
reasonable risk of liability for breach of a fiduciary duty under Title I of
ERISA or under other applicable federal or state law where Participants who are
similarly situated are treated similarly with respect to the payments.
Generally, payments are restorative payments only if the payments are made in
order to restore some or all of the Plan’s losses due to an action (or a failure
to act) that creates a reasonable risk of liability for such a breach of
fiduciary duty (other than a breach of fiduciary duty arising from failure to
remit contributions to the Plan). Payments made to the Plan to make up for
losses due merely to market fluctuations and other payments that are not made on
account of a reasonable risk of liability for breach of a fiduciary duty under
Title I of ERISA are not restorative payments and generally constitute
contributions that are included in Additions.
In addition to this Plan, the Employer maintains the Savings Incentive Plan with
a limitation year corresponding to the Plan Year. If a Participant is also a
participant in the Savings Incentive Plan, the limitation upon the annual
additions which may otherwise be credited to his Savings Incentive Plan account
shall be first reduced by the total Additions for the Plan Year credited to such
Participant’s Account under this Plan, and the Additions to this Plan shall not
be reduced by reason of any annual additions to the Savings Incentive Plan.
     8. Effective January 1, 2008, Section 6.15 is amended to provide as
follows:
6.15 Direct Rollover. A Distributee may elect, at the time and in the manner
prescribed by the Committee, to have any portion of an Eligible Rollover
Distribution paid directly to an Eligible Retirement Plan specified by the
Distributee in a Direct Rollover provided that the recipient Eligible Retirement
Plan accepts rollover contributions, and in the case of an eligible governmental
plan described in clause (vi) of Section 2.1(z), such governmental plan
separately accounts for amounts transferred into such plan from this Plan.
Notwithstanding the foregoing, a non-spouse Beneficiary may make a Direct
Rollover only to

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Eligible Retirement Plans that are either an individual retirement account or an
individual retirement annuity described in Section 2.1(z)(ii) or (iii).
In addition, Distributee may elect, at the time and in the manner prescribed by
the Committee, to have any portion of an Eligible Rollover Distribution paid
directly to a Roth IRA (as defined in Section 408A of the Code) in accordance
with, and subject to the limitations of, Section 408A of the Code.
The Plan provisions otherwise applicable to distributions continue to apply to
this Direct Rollover option. The Distributee shall, in the time and manner
prescribed by the Committee, specify the amount to be directly transferred and
the Eligible Retirement Plan to receive the transfer. Any portion of a
distribution which is not transferred shall be distributed to the Distributee in
the form specified in Section 6.11.
     9. Effective for Participants who are credited with at least one Hour of
Service on or after January 1, 2007, Section 6.8 is amended to provide as
follows:
6.8 Vested Benefit. If any Participant’s employment with Employer and with all
Affiliated Companies is terminated other than by normal retirement, early
retirement, delayed retirement, disability or death, he shall be entitled to a
“vested benefit” which shall include a percentage of his Account, based on his
Years of Vesting Service, according to the vesting table provided below:

              Percentage of Years of Vesting Service   Account
 
       
Fewer than 3
    0 %
3 or more
    100 %

The remainder of a Participant’s Account which does not constitute his vested
benefit shall be treated as a Forfeiture at the time and in the manner specified
pursuant to Sections 4.3 and 5.2(a).
For purposes of determining whether an Employee is entitled to receive any
vested benefit under this Article VI, and the time of payment of such vested
benefit under Section 4.3(c), he shall not be deemed to have terminated his
employment under the Plan until he is no longer employed by any Affiliated
Company to which he may have been transferred, irrespective of whether he shall
have ceased to be classified as an Employee following such transfer.
     10. Section 13.1 is amended to provide as follows:
13.1 Top-Heavy Plan Requirements. For any Top-Heavy Plan Year, the Plan shall
provide a Minimum Benefit required by Section 416(c) of the Code pursuant to
Sections 4.4 and 5.4 of the Plan.
[Signatures on following page]

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     IN WITNESS WHEREOF, J. Alexander’s Corporation has caused this First
Amendment to the 2002 Restatement to be executed this 31st day of December,
2007, effective as of January 1, 2007 (except as otherwise noted), by its duly
authorized officers.

            J. ALEXANDER’S CORPORATION
      By:   /s/ J. Michael Moore       Name:   J. Michael Moore        Title:  
VP of Administration and Human Resources     

     
ATTEST:
   
 
   
/s/ Ruth A. Tidwell 
   

   

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