Ex-10.02



 





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



 









 




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.



2









 






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.



3









 






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.



4









 






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.



5









 





     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



6









 







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]




7









 








     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 
	 	 
	


	 	 







8