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Share Name | Share Symbol | Market | Type |
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J Alexanders Holdings Inc | NYSE:JAX | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
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0.00 | 0.00% | 14.00 | 0 | 01:00:00 |
J. Alexander’s Holdings, Inc.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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Sincerely,
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Lonnie J. Stout II
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Executive Chairman of the Board
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1.
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Approval of the Merger Agreement. To consider and vote on a proposal to approve the Agreement and Plan of Merger, dated as of July 2, 2021 (as it may be amended from time to time, the “merger agreement”), by and among the Company, SPB Hospitality LLC, a Delaware limited liability company (“Parent”), and Titan Merger Sub, Inc., a Tennessee corporation and an indirect, wholly-owned subsidiary of Parent (“Merger Sub”), pursuant to which Merger Sub will be merged with and into the Company (the “merger”), with the Company surviving the merger as an indirect, wholly-owned subsidiary of Parent (the “merger proposal”);
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Advisory Vote on Named Executive Officer Merger-Related Compensation Arrangements. To consider and vote on the proposal to approve, on an advisory, non-binding basis, the compensation that may be paid or become payable to the Company’s named executive officers that is based on or otherwise relates to the merger agreement and the transactions contemplated by the merger agreement (the “merger-related compensation proposal”); and
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Adjournment of the Special Meeting. To consider and vote on a proposal to approve one or more adjournments of the special meeting from time to time, if necessary or appropriate, including to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the merger agreement or to seek a quorum if one is not initially obtained (the “adjournment proposal”).
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By Order of the Board of Directors,
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Jessica L. Hagler
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Vice President, Chief Financial Officer, Treasurer and Secretary
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the approval of the merger agreement by the affirmative vote of shareholders holding a majority of the outstanding shares of Company common stock entitled to vote at the special meeting (the “requisite shareholder vote”);
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no law, order or injunction preventing consummation of the merger will be in effect; and
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the early termination or expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvement Act of 1976, as amended (the “HSR Act”).
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the accuracy of the representations and warranties of the Company set forth in the merger agreement, but subject to a “material adverse effect,” materiality or other standard, as applicable, as provided in the merger agreement;
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the Company having performed or complied in all material respects with all covenants required to be performed by the Company at or prior to the closing of the merger (the “closing”); and
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there shall not have occurred any Company material adverse effect since July 2, 2021;
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the accuracy of the representations and warranties of Parent and Merger Sub set forth in the merger agreement, but subject to a “material adverse effect” or materiality standard, as applicable, as provided in the merger agreement; and
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each of Parent and Merger Sub having performed or complied in all material respects with all covenants required to be performed by Parent and Merger Sub at or prior to the closing.
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“FOR” the merger proposal;
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“FOR” the merger-related compensation proposal; and
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“FOR” the adjournment proposal.
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WHY AM I RECEIVING THIS PROXY STATEMENT?
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On July 2, 2021, the Company entered into the merger agreement providing for the merger of Merger Sub, an indirect, wholly-owned subsidiary of Parent, with and into the Company, with the Company surviving the merger as an indirect, wholly-owned subsidiary of Parent. You are receiving this proxy statement in connection with the solicitation of proxies by the board in favor of the proposal to approve the merger agreement and to approve the other related proposals to be voted on at the special meeting.
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WHAT WILL I RECEIVE IN THE MERGER?
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Upon the terms and subject to the conditions of the merger agreement, if the merger is completed, Company shareholders will have the right to receive $14.00 in cash, without interest and subject to any applicable taxes, for each share of Company common stock that they own immediately prior to the effective time, other than shares owned by the Company (except for shares of Company common stock held either in a fiduciary or agency capacity that are beneficially owned by third parties) or Parent.
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WHEN AND WHERE IS THE SPECIAL MEETING?
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The special meeting will be held at the Loews Vanderbilt Hotel, located at 2100 West End Avenue, Nashville, Tennessee 37203 on September 28, 2021 at 9:30 a.m., Central time.
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WHO IS ENTITLED TO VOTE AT THE SPECIAL MEETING?
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Only holders of record of Company common stock at the close of business on the record date for the special meeting, are entitled to receive these proxy materials and vote at the special meeting. At the close of business on the record date, there were 15,079,893 shares of Company common stock outstanding and entitled to vote at the special meeting, held by 3,224 holders of record. Each share of Company common stock issued and outstanding as of the record date will be entitled to one vote on each matter submitted to a vote at the special meeting.
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WHAT MATTERS WILL BE VOTED ON AT THE SPECIAL MEETING?
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At the special meeting, you will be asked to consider and vote on the following proposals:
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the merger proposal;
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the merger-related compensation proposal; and
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the adjournment proposal.
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WHAT VOTE OF COMPANY SHAREHOLDERS IS REQUIRED TO APPROVE THE MERGER PROPOSAL?
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Approval of the merger agreement requires that shareholders holding a majority of the outstanding shares of Company common stock entitled to vote at the special meeting vote “FOR” the merger proposal. An abstention or a failure to vote your shares of Company common stock with respect to the merger proposal (including a failure of your broker, bank or other nominee to vote shares held on your behalf) will have the same effect as a vote “AGAINST” the merger proposal.
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WHAT IS THE VOTE REQUIRED TO APPROVE THE MERGER-RELATED COMPENSATION PROPOSAL?
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Approval, on an advisory, non-binding basis, of the merger-related compensation proposal requires that the votes cast in favor of the merger-related compensation proposal exceed the votes cast against the merger-related compensation proposal. An abstention or a failure to vote your shares of Company common stock with respect to the merger-related compensation proposal (including a failure of your broker, bank or other nominee to vote shares held on your behalf), assuming a quorum is present, will have no effect on such proposal.
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WHAT IS THE VOTE REQUIRED TO APPROVE THE ADJOURNMENT PROPOSAL?
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Approval of the adjournment proposal requires that the votes cast in favor of the adjournment proposal exceed the votes cast against the adjournment proposal. An abstention or a failure to vote your shares of Company common stock with respect to the adjournment proposal (including a failure of your broker, bank or other nominee to vote shares held on your behalf), assuming a quorum is present, will have no effect on such proposal.
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HOW DOES THE COMPANY’S BOARD OF DIRECTORS RECOMMEND I VOTE ON THE PROPOSALS?
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The board recommends that you vote as follows:
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“FOR” the merger proposal;
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“FOR” the merger-related compensation proposal; and
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“FOR” the adjournment proposal.
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WHAT CONSTITUTES A “QUORUM”?
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A quorum will be present if a majority of the shares of Company common stock issued and outstanding and entitled to vote at the special meeting on the close of business on the record date for the special meeting are present in person or represented by proxy at the special meeting. If a quorum is not present at the special meeting, the special meeting may be adjourned from time to time until a quorum is obtained.
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WHEN IS THE MERGER EXPECTED TO BE COMPLETED?
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As of the date of this proxy statement, we currently expect to complete the merger during the fourth quarter of calendar year 2021. However, the merger is subject to receipt of regulatory clearance and approval and satisfaction or waiver of other conditions, which are described below, and it is possible that factors outside the control of the Company, Parent and/or Merger Sub could delay the completion of the merger, or prevent it from being completed at all.
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WHAT HAPPENS IF THE MERGER IS NOT COMPLETED?
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If the merger agreement is not approved by Company shareholders, or if the merger is not completed for any other reason, the Company shareholders will not receive any payment for their shares of Company common stock in connection with the merger. Instead, the Company will remain a public company and shares of Company common stock will continue to be registered under the Exchange Act, as well as listed and traded on the NYSE. In the event that either the Company or Parent terminates the merger agreement, then, in certain circumstances, (1) the Company will be required to pay to Parent the termination fee of $7,750,000 or (2) Parent will be required to pay to the Company the termination fee of $10,000,000. See the section entitled “The Merger Agreement — Termination Fees; Effect of Termination.”
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WHAT WILL HAPPEN IF THE COMPANY SHAREHOLDERS DO NOT APPROVE THE MERGER-RELATED COMPENSATION PROPOSAL?
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In the merger-related compensation proposal, the Company is providing its shareholders with a separate advisory, non-binding vote to approve the payment of certain compensation to the named executive officers of the Company in connection with the merger, as described in the table entitled “Merger-Related
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AM I ENTITLED TO DISSENTERS’ RIGHTS INSTEAD OF RECEIVING MERGER CONSIDERATION?
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No. Company shareholders are not entitled to assert dissenters’ rights in connection with the merger under the TBCA.
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DO YOU EXPECT THE MERGER TO BE TAXABLE TO COMPANY SHAREHOLDERS?
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The exchange of shares of Company common stock for cash in the merger will be a taxable transaction to U.S. holders for U.S. federal income tax purposes. In general, a U.S. holder whose shares of Company common stock are converted into the right to receive cash in the merger will recognize gain or loss for U.S. federal income tax purposes in an amount equal to the difference, if any, between the amount of cash received with respect to such shares and the U.S. holder’s adjusted tax basis in such shares.
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WHO IS SOLICITING MY VOTE?
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The board is soliciting your proxy, and the Company will bear the cost of soliciting proxies. Okapi Partners LLC (“Okapi”) has been retained to assist with the solicitation of proxies. Okapi will be paid approximately $10,000 and will be reimbursed for its reasonable out-of-pocket expenses for these and other advisory services in connection with the special meeting. Solicitation initially will be made by mail. Forms of proxies and proxy materials may also be distributed through brokers, banks and other nominees to the beneficial owners of shares of Company common stock, in which case the Company will reimburse these parties for their reasonable out-of-pocket expenses for forwarding solicitation material to such beneficial owners. Proxies may also be solicited in person or by telephone, facsimile, electronic mail, or via the Internet by Okapi or by certain of the Company’s directors, officers and employees, without additional compensation.
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WHAT DO I NEED TO DO NOW?
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Carefully read and consider the information contained in and incorporated by reference into this proxy statement, including the annexes. Whether or not you expect to attend the special meeting in person, please submit a proxy to vote your shares as promptly as possible so that your shares may be represented and voted at the special meeting.
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WHAT IS THE DIFFERENCE BETWEEN HOLDING SHARES OF COMPANY COMMON STOCK AS A SHAREHOLDER OF RECORD AND AS A BENEFICIAL HOLDER?
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Most of our shareholders hold their shares of Company common stock through a broker, bank or other nominee rather than directly in their own name. As summarized below, there are some distinctions between shares of Company common stock held of record and those owned beneficially through a broker, bank or other nominee.
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Shareholder of Record. If your shares of Company common stock are registered directly in your name with our transfer agent, Computershare Trust Company, N.A. (“Computershare”), you are considered the shareholder of record with respect to those shares of Company common stock, and these proxy materials are being sent directly to you by us. As the shareholder of record, you have the right to grant your voting proxy directly to us or to vote your shares of Company common stock in person at the special meeting. We have enclosed a proxy card for you to use.
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Beneficial Owner. If your shares of Company common stock are held in a brokerage account or in the name of a broker, bank or other nominee, you are considered the beneficial owner of those shares of Company common stock, and these proxy materials are being forwarded to you together with a voting instruction card by your broker, bank or other nominee who is considered the shareholder of record with respect to those shares of Company common stock. As the beneficial owner, you have the right to direct your broker, bank or other nominee on how to vote your shares of Company common stock, and you are also invited to attend the special meeting where you can vote your shares of Company common stock in person in accordance with the following procedures. Because a beneficial owner is not the shareholder of record, you may not vote these shares of Company common stock at the special meeting unless you obtain a “legal proxy” from the broker, bank or other nominee that holds your shares of Company common stock giving you the right to vote the shares of Company common stock at the special meeting. You should allow yourself enough time prior to the special meeting to obtain this “legal proxy” from your broker, bank or other nominee who is the shareholder of record.
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HOW DO I VOTE MY SHARES OF COMPANY COMMON STOCK?
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Before you vote, you should determine whether you hold your shares of Company common stock directly in your name as a registered holder (which would mean that you are a “shareholder of record”) or through a broker, bank or other nominee (which would mean that you are a “beneficial owner”), because this will determine the procedure that you must follow in order to vote.
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Via the Internet — If you choose to vote via the Internet, go to the website on the enclosed proxy card and follow the instructions. You will need the control number shown on your proxy card in order to vote.
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Via Telephone — If you choose to vote via telephone, use a touch-tone telephone to call the telephone number indicated on the enclosed proxy card and follow the voice prompts. You will need the control number shown on your proxy card in order to vote.
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Via Mail — If you choose to vote via mail, mark your proxy card, date and sign it, and return it in the postage-paid envelope provided. Proxy cards that are returned without a signature will not be counted as present at the special meeting and cannot be voted.
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At the Special Meeting — Shareholders of record may vote in person by following the procedures described above to attend the special meeting. You may also be represented by another person at the special meeting by executing a proper proxy card designating that person. Any previously submitted proxies will be superseded by the vote cast at the special meeting.
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DO I NEED TO ATTEND THE SPECIAL MEETING IN PERSON?
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No. It is not necessary for you to attend the special meeting in person in order to vote your shares of Company common stock.
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MAY I CHANGE MY VOTE AFTER I HAVE MAILED MY SIGNED PROXY CARD OR OTHERWISE SUBMITTED MY VOTE?
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Yes. Even after you sign the proxy card or voting instruction card in the form accompanying this proxy statement, vote via telephone or vote via the Internet, you retain the power to revoke your proxy or change your vote. If you are a shareholder of record, you can revoke your proxy or change your vote at any time before it is exercised by giving written notice specifying such revocation to our Secretary at J. Alexander’s Holdings, Inc., 3401 West End Avenue, Suite 260, P.O. Box 24300, Nashville, Tennessee 37202, so that it is received prior to 11:59 p.m., Eastern time, on the night before the special meeting. You may also change your vote by timely delivery of a valid, later-dated proxy signed and returned by mail prior to 11:59 p.m., Eastern time, on the night before the special meeting or by attending and voting in person at the special meeting. Simply attending the special meeting will not constitute revocation of your proxy. If your shares of Company common stock are held in the name of a broker, bank or other nominee, you should follow the instructions of such broker, bank or other nominee regarding the revocation of proxies. If you have voted via the Internet or by telephone, you may change your vote by signing on to the website and following the prompts or calling the toll-free number again and following the instructions.
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WHAT IF I ABSTAIN FROM VOTING?
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The requisite number of shares to approve the merger agreement is based on the total number of shares of Company common stock outstanding and entitled to vote thereon on the record date for the special meeting, not just the shares that are voted. If you do not vote or if you abstain from voting on the merger proposal, it will have the same effect as a vote “AGAINST” the merger proposal.
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WHAT HAPPENS IF I RETURN MY PROXY CARD BUT I DO NOT INDICATE HOW I WILL VOTE?
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If you properly return your proxy card but do not include instructions on how to vote, your shares of Company common stock will be voted “FOR” the merger proposal, thereby voting such shares of Company common stock in favor of approving the merger and, “FOR” the merger-related compensation proposal, and “FOR” the adjournment proposal.
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WHAT IS THE EFFECT OF A BROKER NON-VOTE?
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If your shares of Company common stock are held in a brokerage account or in the name of a broker, bank or other nominee, you are considered the “beneficial owner” of the shares of Company common stock held for you in what is known as “street name.” Under applicable rules, brokers, banks and other nominees have the discretion to vote on routine matters. The proposals in this proxy statement are non-routine matters, and therefore brokers, banks and other nominees cannot vote on these proposals without your instructions. This means that a “broker non-vote” cannot occur at the special meeting. Therefore, it is important that you cast your vote by instructing your broker, bank or nominee on how you wish to vote your shares of Company common stock.
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CAN I PARTICIPATE IF I AM UNABLE TO ATTEND?
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If you are unable to attend the special meeting in person, we encourage you to send in your proxy card or to vote by telephone or over the Internet. The special meeting will not be broadcast telephonically or over the Internet.
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WHERE CAN I FIND THE VOTING RESULTS OF THE SPECIAL MEETING?
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The Company intends to announce preliminary voting results at the special meeting and publish final results in a Current Report on Form 8-K that will be filed with the SEC following the special meeting. All reports the Company files with the SEC are publicly available when filed. See the section entitled “Where You Can Find More Information.”
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WHAT HAPPENS IF I SELL MY SHARES BEFORE COMPLETION OF THE MERGER?
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In order to receive the merger consideration, you must hold your shares of Company common stock through completion of the merger. Consequently, if you transfer your shares of Company common stock before completion of the merger, you will have transferred your right to receive the merger consideration.
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DO I NEED TO DO ANYTHING WITH MY COMPANY COMMON STOCK CERTIFICATES NOW?
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No. After the merger is completed, if you hold certificates representing shares of Company common stock prior to the merger, the exchange agent for the merger will send you a letter of transmittal and instructions for exchanging your shares of Company common stock for the merger consideration. Upon surrender of the certificates for cancellation along with the executed letter of transmittal and other required documents described in the instructions or otherwise required by the exchange agent in accordance with the merger agreement, you will receive the merger consideration. If your shares of Company common stock are held in “street name” by your broker, bank or other nominee, you may receive instructions from your broker, bank or other nominee as to what action, if any, you need to take to effect the surrender of your “street name” shares in exchange for the merger consideration. Do not send in your certificates now.
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HOW CAN I OBTAIN ADDITIONAL INFORMATION ABOUT THE COMPANY?
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You can find more information about us from various sources described in the section entitled “Where You Can Find More Information.”
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WHAT DOES IT MEAN IF I RECEIVE MORE THAN ONE SET OF PROXY MATERIALS?
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This means that you hold shares of Company common stock in more than one way. For example, you may own some shares of Company common stock directly as a shareholder of record and other shares of Company common stock as a beneficial owner through a broker, bank or other nominee, or you may own shares of Company common stock as a beneficial owner through more than one broker, bank or other nominee. In these situations, you may receive more than one set of proxy materials or multiple control numbers for use in submitting your proxy. To ensure that ALL of your shares of Company common stock are voted, sign and return each proxy card or voting instruction card you receive or, if you submit your proxy through the Internet or by telephone, vote at least once for each proxy card or control number you receive.
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WHO CAN HELP ANSWER MY QUESTIONS?
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If you have questions about the merger or the other matters to be voted on at the special meeting, desire additional copies of this proxy statement or additional proxy cards or otherwise need assistance voting, you should contact:
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the occurrence of any event, change or other circumstances that could delay the closing of the merger;
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the possibility that the merger is not consummated and the merger agreement is terminated;
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the ability and timing to obtain the approval of Company shareholders or to satisfy any of the other conditions to the merger agreement;
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the possibility that a governmental entity may prohibit, delay or refuse to grant a necessary regulatory approval in connection with the merger;
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the risk that shareholder litigation in connection with the merger may affect the timing or occurrence of the merger or result in significant costs of defense, indemnification and liability;
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adverse effects on Company common stock because of the failure to complete the merger in a timely manner or at all;
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limitations placed on the Company’s ability to operate its business under the merger agreement;
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the possibility that the merger might divert management’s attention from the Company’s ongoing business operations;
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the Company’s business experiencing disruptions from ongoing business operations due to transaction-related uncertainty or other factors making it more difficult than expected to maintain relationships with employees, business partners or governmental entities;
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significant transaction costs which have been and may continue to be incurred related to the merger, in the event that the merger is not consummated;
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unexpected costs, charges, or expenses resulting from the merger;
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changes in business relationships with and purchases by or from major customers, suppliers or distributors, including delays or cancellations in shipments;
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the business of the Company may suffer as a result of uncertainty surrounding the merger;
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the Company may be adversely affected by other economic, business, and/or competitive factors;
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the occurrence of any event, change or other circumstances could give rise to the termination of the merger agreement and, in certain cases, the payment by us of a termination fee to Parent of $7,750,000;
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the possibility that the merger might be delayed or not completed if the party to the equity commitment letter does not fulfill its commitment;
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risks that the proposed transaction disrupts current plans;
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other risks to consummation of the merger, including the risk that the merger will not be consummated within the expected time period or at all;
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the impact of the COVID-19 pandemic on the Company’s business and general economic conditions; and
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other risks detailed in the Company’s filings with the SEC (see the section entitled “Where You Can Find More Information”).
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the merger proposal, which is further described in the section entitled “The Merger (Proposal 1);”
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the merger-related compensation proposal, discussed under the sections entitled “The Merger (Proposal 1) — Interests of the Company’s Directors and Executive Officers in the Merger — Quantification of Potential Payments to Named Executive Officers in Connection with the Merger” and “Advisory Vote on Named Executive Officer Merger-Related Compensation Arrangements (Proposal 2);” and
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the adjournment proposal, discussed under the section entitled “Vote on Adjournment (Proposal 3).”
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Via the Internet — If you choose to vote via the Internet, go to the website indicated on the enclosed proxy card and follow the instructions. You will need the control number shown on your proxy card in order to vote.
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Via Telephone — If you choose to vote via telephone, use a touch-tone telephone to call the toll-free phone number indicated on the enclosed proxy card and follow the voice prompts. You will need the control number shown on your proxy card in order to vote.
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Via Mail — If you choose to vote via mail, mark your proxy card, date and sign it, and return it in the postage-paid envelope provided. Proxy cards that are returned without a signature will not be counted as present at the special meeting and cannot be voted. If you are a shareholder of record and you return your signed proxy card but do not indicate your voting preferences, the persons named in the proxy card will vote the shares represented by that proxy as recommended by the board.
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At the Special Meeting — Shareholders of record may vote in person by following the procedures described above to attend the special meeting. You may also be represented by another person at the special meeting by executing a proper proxy card designating that person. Any previously submitted proxies will be superseded by the vote cast at the special meeting.
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The Company’s Operating and Financial Condition. The board’s consideration of its knowledge and familiarity with the Company’s business, including its current and historical financial condition and results of operations, competitive position, properties and assets, as well as the Company’s business strategy and prospects, in light of the current and prospective economic environment.
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Prospects of the Company as an Independent Company. The board’s evaluation of the Company’s long-term strategic plan and the related execution risks and uncertainties (including the risk factors set forth in the Company’s Annual Report on Form 10-K for the year ended January 3, 2021), and its weighing of the prospects of achieving long-term value for its shareholders through execution of the Company’s strategic business plan against the near-term value to shareholders which could be realized through the merger at a significant premium to the recent market price of the Company common stock.
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Unpredictability of Future Operating Environment. The board’s assessment, after discussions with the Company’s management and advisors, of the risks of remaining an independent company and pursuing the Company’s strategic plan, including risks relating to the effect of competition in the Company’s markets, and other risks and uncertainties relating to the financial markets, the economy and the restaurant industry.
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Review of Strategic Alternatives. The board’s extended consideration of strategic alternatives predating 2019 and thereafter, including, among others, remaining an independent company and pursuing the Company’s strategic plan, conducting a sale process from 2019, ending in 2021, and pursuing a strategic transaction with, or the sale of the Company to, another party (including those that submitted indications of interest prior to the execution of the merger agreement), and the board’s belief, after a review of the proposals and discussions with the Company’s management and advisors, that the value offered to shareholders in the merger, combined with their assessment concerning the certainty of closing, was more favorable to the shareholders of the Company than the potential value that might have resulted from other strategic opportunities reasonably available to the Company, including remaining an independent company.
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Cash Consideration. The fact that the consideration consists solely of cash, providing the Company’s shareholders with certainty of value and liquidity upon consummation of the merger.
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Premium to Market Price. The $14.00 price to be paid for each share represented a significant premium to recent and historical market prices of the Company’s common stock, including an approximate premium of:
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20.3% over $11.64, the closing price per share of the common stock on June 30, 2021, the last trading day prior to the date of the board meeting to approve the merger agreement;
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14.9% over $12.18, the closing price per share of the common stock on June 1, 2021, the thirtieth trading day prior to the date of the board meeting to approve the merger agreement;
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77.7% over $7.88, the closing price per share of the common stock on February 9, 2021, the day on which the Company announced (after market close) its commitment to completing the previously announced review of strategic alternatives;
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27.0% over the volume weighted average price per share (“VWAP”) of the common stock over the preceding 90-day period ended June 30, 2021, the last trading day prior to the date of the board meeting to approve the merger agreement;
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125.1% over the VWAP of the common stock over the preceding one-year period ended June 30, 2021, the last trading day prior to the date of the board meeting to approve the merger agreement; and
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341.6% over $3.17, the low closing price per share of the common stock in 2020, during the early stages of the COVID-19 pandemic (March 18, 2020).
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•
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Likelihood of Completion. The belief of the board that the merger is likely to be completed in a short period of time, based on, among other things, the absence of a financing condition, the financial strength of Parent and Drawbridge and the terms of the equity commitment letter, the limited number of conditions to the merger, Fortress’s extensive prior experience in successfully completing acquisitions of other companies, in each case, as compared to alternative acquisition proposals considered by the board, and the likelihood of obtaining required regulatory approvals for the merger and the terms of the merger agreement regarding the obligations of both companies to pursue such approvals.
|
•
|
Sale Process. The competitive nature of the sales process conducted by the Company, together with its financial and legal advisors, in soliciting and evaluating multiple acquisition proposals for the Company, and the number and terms of the acquisition proposals received by the Company, and the board’s determination that Parent’s proposal represented the best value and likelihood of closing currently available to the Company’s shareholders and was superior to other proposals, based on the board’s expectation as to the certainty of closing the merger without material delay.
|
•
|
Advisors. The fact that the Company’s legal and financial advisors were involved throughout the process and negotiations and updated the board directly and regularly, which provided the board with additional perspectives on the negotiations in addition to those of management.
|
•
|
Negotiations with Parent. The course of discussions and negotiations between the Company and Parent, improvements to the terms of Parent’s acquisition proposal in connection with those negotiations, including those ultimately resulting in Parent’s final price of $14.00 in cash per share, and the board’s belief based on these negotiations, that Parent’s proposal represented the highest price per share that Parent was willing to pay and that these were the most favorable terms to the Company to which Parent was willing to agree.
|
•
|
Opinion of Piper Sandler. The opinion of Piper Sandler, issued to the board verbally, and later confirmed in a written opinion dated July 2, 2021, that, based upon and subject to the limitations and assumptions set forth in its written opinion, the $14.00 per share in cash to be paid to the Company’s shareholders pursuant to the merger under the merger agreement was fair, from a financial point of view, to such shareholders, and the related financial analyses performed by Piper Sandler.
|
•
|
Unanimous Determination of Participating Board Members. The fact that the members of the board participating in the decision were unanimous in their determination to recommend that the shareholders approve the merger and the merger agreement.
|
•
|
Customary Conditions; Specific Enforcement. The fact that the terms and conditions of the merger agreement minimize, to the extent reasonably practicable, the risk that a condition to the merger would not be satisfied and the Company’s ability to specifically enforce Parent’s obligations, including the obligations to consummate the merger, under the merger agreement, and to enforce the equity commitment letter as a third party beneficiary.
|
•
|
Ability to Withdraw or Change Recommendation. The board’s ability under the merger agreement to withdraw or modify its recommendation in favor of the merger under certain circumstances, including its ability to terminate the merger agreement in connection with a superior offer (as specified in the merger agreement), subject to payment of a termination fee of $7,750,000, and the board’s determination that the termination fee is within the customary range of termination fees for transactions of this type and is reasonable.
|
•
|
Shareholder Vote. The board's belief that providing shareholders with the opportunity to vote to accept an all-cash transaction, combined with the factors discussed in the sections entitled “— Background of the Merger” and “— Reasons for the Merger,” created an opportunity enabling shareholders to eliminate the risk of owning a smaller company in the restaurant industry in a volatile environment.
|
•
|
No Shareholder Participation in Future Growth or Earnings. The nature of the transaction as an all-cash transaction will prevent shareholders from being able to participate in any future earnings or
|
•
|
Taxable Consideration. The gains from the merger would be taxable to the Company’s shareholders for federal income tax purposes, subject to the countervailing consideration that amounts received prior to any future change in tax law would be subject to favorable tax rates on capital gains, compared to any rates that could be increased in the future.
|
•
|
Effect of Failure to Complete Transactions. If the merger is not consummated, the trading price of the Company common stock could be adversely affected, the Company will have incurred significant transaction and opportunity costs attempting to consummate the merger, the Company may have lost customers, suppliers, business partners and employees after the announcement of the merger agreement, the Company’s business may be subject to disruption, the market’s perceptions of the Company’s prospects could be adversely affected and the Company’s directors, officers and other employees will have expended considerable time and effort to consummate the merger.
|
•
|
Interim Restrictions on Business. The restrictions in the merger agreement on the conduct of the Company’s business prior to the consummation of the merger, requiring the Company to operate its business in the ordinary course of business and subject to other restrictions, other than with the consent of Parent, may delay or prevent the Company from undertaking business opportunities that could arise prior to the consummation of the merger.
|
•
|
Restrictions on Soliciting Proposals; Termination Fee. The restrictions in the merger agreement on the active solicitation of competing proposals and the requirement, under the merger agreement, that the Company pay, if the merger agreement is terminated in certain circumstances, a termination fee of $7,750,000, which fee may deter third parties from making a competing offer for the Company prior to the consummation of the merger and could impact the Company’s ability to engage in another transaction for up to one year if the merger agreement is terminated in certain circumstances.
|
•
|
Dissenters’ Rights. The Company’s shareholders are not entitled to assert dissenters’ rights in connection with the merger under the TBCA.
|
•
|
Potential Conflicts of Interest. The executive officers and directors of the Company may have interests in the merger that are different from, or in addition to, those of the Company’s shareholders.
|
($ in millions)
|
| |
Fiscal Year Ending December
|
||||||||||||
|
| |
2021E
|
| |
2022E
|
| |
2023E
|
| |
2024E
|
| |
2025E
|
Net Sales
|
| |
244.7
|
| |
276.5
|
| |
296.0
|
| |
315.9
|
| |
337.7
|
Restaurant Operating Expenses(1)
|
| |
197.7
|
| |
220.9
|
| |
236.0
|
| |
249.8
|
| |
265.7
|
General and Administrative Expenses(2)
|
| |
21.0
|
| |
18.9
|
| |
19.1
|
| |
19.3
|
| |
20.2
|
Pre-Opening Expenses
|
| |
1.0
|
| |
1.4
|
| |
1.5
|
| |
1.5
|
| |
1.5
|
Other (Income), Net
|
| |
(0.1)
|
| |
(0.1)
|
| |
(0.1)
|
| |
(0.1)
|
| |
(0.1)
|
Adjusted EBITDA(3)
|
| |
25.0
|
| |
35.3
|
| |
39.5
|
| |
45.4
|
| |
50.3
|
(1)
|
Restaurant operating expenses consist of food and beverage costs, restaurant labor and related costs, other operating expenses and occupancy costs as summarized in the table below. Restaurant operating expenses exclude depreciation and amortization of restaurant property and equipment and losses on disposals of assets.
|
($ in millions)
|
| |
Fiscal Year Ending December
|
||||||||||||
|
| |
2021E
|
| |
2022E
|
| |
2023E
|
| |
2024E
|
| |
2025E
|
Food and Beverage Costs
|
| |
74.8
|
| |
84.8
|
| |
90.6
|
| |
96.5
|
| |
102.9
|
Labor Costs
|
| |
72.9
|
| |
83.1
|
| |
88.1
|
| |
93.0
|
| |
98.8
|
Other Operating Expenses
|
| |
35.1
|
| |
37.5
|
| |
40.8
|
| |
42.9
|
| |
45.5
|
Occupancy Costs
|
| |
14.9
|
| |
15.5
|
| |
16.5
|
| |
17.5
|
| |
18.5
|
(2)
|
General and administrative expenses excludes depreciation of corporate assets.
|
(3)
|
Adjusted EBITDA represents a non-GAAP financial measure. See “— Reconciliation of Non-GAAP Financial Measures” below.
|
($ in millions)
|
| |
Fiscal Year Ending December
|
||||||||||||
|
| |
2021E
|
| |
2022E
|
| |
2023E
|
| |
2024E
|
| |
2025E
|
Net Income
|
| |
11.1
|
| |
19.0
|
| |
23.7
|
| |
28.4
|
| |
32.2
|
Plus: Income Tax Expense
|
| |
1.2
|
| |
2.2
|
| |
1.2
|
| |
1.5
|
| |
1.7
|
Plus: Interest Expense
|
| |
0.7
|
| |
0.5
|
| |
—
|
| |
—
|
| |
—
|
Plus: Depreciation and Amortization
|
| |
12.4
|
| |
13.4
|
| |
14.4
|
| |
15.3
|
| |
16.2
|
Plus: Transaction Costs
|
| |
0.0
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
Plus: Loss on Disposal of Assets
|
| |
0.2
|
| |
0.2
|
| |
0.2
|
| |
0.2
|
| |
0.2
|
Plus: Loss (Gain) on Discontinued Operations
|
| |
(0.6)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
Adjusted EBITDA
|
| |
25.0
|
| |
35.3
|
| |
39.5
|
| |
45.4
|
| |
50.3
|
•
|
reviewed and analyzed the financial terms of the merger agreement;
|
•
|
reviewed and analyzed certain financial and other data with respect to the Company which was publicly available;
|
•
|
reviewed and analyzed certain information furnished to Piper Sandler by Company management relating to the business, operations and prospects of the Company, including the Company projections provided by Company management;
|
•
|
conducted discussions with members of senior management and representatives of the Company concerning the two immediately preceding matters described above, as well as its business, operations and prospects before and after giving effect to the merger;
|
•
|
reviewed the current and historical reported prices and trading activity of the shares of Company common stock and similar information for certain other companies that Piper Sandler deemed relevant;
|
•
|
compared the financial performance of the Company with that of certain other publicly traded companies that Piper Sandler deemed relevant;
|
•
|
reviewed the financial terms, to the extent publicly available, of certain precedent transactions that Piper Sandler deemed relevant in evaluating the merger;
|
•
|
conducted a discounted cash flow analysis on the Company based on projections that were prepared by Company management; and
|
•
|
conducted such other analyses, examinations and inquiries and considered such other financial, macroeconomic and market criteria as Piper Sandler deemed necessary in arriving at its opinion.
|
•
|
a premium of 77.7% based on the closing price per share of $7.88 on February 9, 2021, the undisturbed date;
|
•
|
a premium of 20.3% based on the closing price per share of $11.64 on June 30, 2021, the last full trading day prior to Piper Sandler’s presentation to the board on July 1, 2021;
|
•
|
a premium of 22.9% based on the closing price per share of $11.39 on June 24, 2021, the preceding 7-day period ended June 30, 2021;
|
•
|
a premium of 14.9% based on the closing price per share of $12.18 on June 1, 2021, the preceding 30-day period ended June 30, 2021;
|
•
|
a premium of 36.3% based on the closing price per share of $10.27 on April 30, 2021, the preceding 60-day period ended June 30, 2021;
|
•
|
a premium of 41.1% based on the closing price per share of $9.92 on April 2, 2021, the preceding 90-day period ended June 30, 2021;
|
•
|
a premium of 195.4% based on the closing price per share of $4.74 on July 1, 2020, the preceding one-year period ended June 30, 2021;
|
•
|
a premium of 22.6% based on the VWAP for the 7-day period ended June 30, 2021 of $11.42;
|
•
|
a premium of 20.4% based on the VWAP for the 30-day period ended June 30, 2021 of $11.63;
|
•
|
a premium of 22.4% based on the VWAP for the 60-day period ended June 30, 2021 of $11.44
|
•
|
a premium of 27.0% based on the VWAP for the 90-day period ended June 30, 2021 of $11.02; and
|
•
|
a premium of 125.1% based on the VWAP for the one-year period ended June 30, 2021 of $6.22.
|
•
|
companies that operate in the full service restaurant industry;
|
•
|
companies that have a market capitalization between $100.0 million and $3.0 billion;
|
•
|
companies that have estimated calendar year 2021 revenues greater than or equal to $200.0 million; and
|
•
|
companies that operate a significant number of company-owned restaurants, defined as greater than or equal to 65.0% of the system.
|
•
|
BJ’s Restaurants, Inc.
|
•
|
Bloomin’ Brands, Inc.
|
•
|
Brinker International, Inc.
|
•
|
The Cheesecake Factory Incorporated
|
•
|
Chuy’s Holdings, Inc.
|
•
|
Dave and Buster’s Entertainment, Inc.
|
•
|
Red Robin Gourmet Burgers, Inc.
|
•
|
Enterprise value (which is defined as fully diluted equity value, based on closing prices per share on June 30, 2021, plus total debt, preferred equity and noncontrolling interests (as applicable) less total cash and cash equivalents) as a multiple of earnings before interest, taxes, depreciation and amortization and publicly disclosed non-recurring adjustments, referred to as “adjusted EBITDA,” (which, in the case of the Company, see “— Reconciliation of Non-GAAP Financial Measures”) for estimated calendar year 2021.
|
Company
|
| |
Systemwide
Unit Count
|
| |
Company-
Owned Units
|
| |
Market
Capitalization(1)(2)
|
| |
CY 2021E
Revenues(1)
|
| |
Enterprise
Value(1)
|
| |
CY 2021E
EBITDA(1)
|
| |
EV / CY
2021E
EBITDA
|
BJ’s Restaurants, Inc.
|
| |
211
|
| |
100%
|
| |
$1,153
|
| |
$1,082
|
| |
$1,180
|
| |
$89
|
| |
13.3x
|
Bloomin’ Brands, Inc.
|
| |
1,476
|
| |
79%
|
| |
$2,500
|
| |
$4,092
|
| |
$3,363
|
| |
$480
|
| |
7.0x
|
Brinker International, Inc.
|
| |
1,657
|
| |
68%
|
| |
$2,955
|
| |
$3,588
|
| |
$3,926
|
| |
$440
|
| |
8.9x
|
The Cheesecake Factory Incorporated
|
| |
324
|
| |
92%
|
| |
$2,647
|
| |
$2,857
|
| |
$2,959
|
| |
$235
|
| |
12.6x
|
Chuy’s Holdings, Inc.
|
| |
93
|
| |
100%
|
| |
$529
|
| |
$394
|
| |
$683
|
| |
$56
|
| |
7.1x
|
Dave & Buster’s Entertainment, Inc.
|
| |
141
|
| |
100%
|
| |
$2,008
|
| |
$1,290
|
| |
$2,525
|
| |
$288
|
| |
8.8x
|
Red Robin Gourmet Burgers, Inc.
|
| |
543
|
| |
81%
|
| |
$761
|
| |
$1,178
|
| |
$663
|
| |
$96
|
| |
11.8x
|
Minimum
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
7.0x
|
Mean
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
9.9x
|
Median
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
8.9x
|
Maximum
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
13.3x
|
(1)
|
In millions.
|
(2)
|
As of June 30, 2021.
|
|
Merger Consideration Implied Multiple:
|
| |
Implied Multiple Reference Range:
|
|
|
EV / CY 2021E EBITDA
|
| |
EV / CY 2021E EBITDA
|
|
|
8.7x
|
| |
7.0x – 13.3x
|
|
|
Merger Consideration
|
| |
Implied Equity Value per Share Reference Range:
|
|
|
$14.00
|
| |
$11.62 – $20.59
|
|
•
|
transactions in which the acquiring company purchased a controlling interest of the target;
|
•
|
transactions that were announced or completed between January 1, 2010 and the date of Piper Sandler’s opinion and subsequently closed or were in process of closing;
|
•
|
targets with transaction enterprise values between $100.0 million and $3.0 billion;
|
•
|
targets that operate in the full service restaurant industry;
|
•
|
targets that operate a significant number of company-owned restaurants, defined as greater than or equal to 65.0% of the system; and
|
•
|
targets with year-over-year unit growth rates less than or equal to 10.0%.
|
Announced
Date
|
| |
Effective
Date
|
| |
Target
|
| |
Acquiror
|
| |
Enterprise
Value(1)
|
| |
EV / LTM
EBITDA
|
9/25/19
|
| |
11/04/19
|
| |
Del Frisco’s Double Eagle & Del Frisco’s Grille
|
| |
Landry’s
|
| |
$325
|
| |
(2)
|
3/8/18
|
| |
5/24/18
|
| |
Bravo Brio Restaurant Group
|
| |
Spice Private Equity
|
| |
$101
|
| |
6.6x
|
10/16/17
|
| |
12/21/17
|
| |
Ruby Tuesday
|
| |
NRD Capital Management
|
| |
$316
|
| |
7.5x
|
3/27/17
|
| |
4/24/17
|
| |
Cheddar’s Casual Cafe
|
| |
Darden Restaurants
|
| |
$810
|
| |
10.4x
|
1/24/17
|
| |
4/28/17
|
| |
Bob Evans Restaurants
|
| |
Golden Gate Capital
|
| |
$565
|
| |
8.3x
|
5/22/15
|
| |
8/24/15
|
| |
Frisch’s Restaurants
|
| |
NRD Capital Management
|
| |
$173
|
| |
7.3x
|
5/20/14
|
| |
7/15/14
|
| |
TGI Fridays
|
| |
Sentinel Capital Partners, Tri-Artisan Capital Partners
|
| |
$800
|
| |
8.0x
|
1/16/14
|
| |
2/14/14
|
| |
CEC Entertainment
|
| |
Apollo Global Management
|
| |
$1,329
|
| |
7.8x
|
5/22/12
|
| |
8/21/12
|
| |
Benihana
|
| |
Angelo, Gordon & Co.
|
| |
$290
|
| |
9.2x
|
5/1/12
|
| |
7/2/12
|
| |
P.F. Chang’s China Bistro
|
| |
Centerbridge Partners
|
| |
$1,052
|
| |
8.3x
|
2/7/12
|
| |
4/2/12
|
| |
O’Charley’s
|
| |
Fidelity National Financial
|
| |
$202
|
| |
6.5x
|
12/16/11
|
| |
2/1/12
|
| |
Morton’s Restaurant Group
|
| |
Landry’s
|
| |
$182
|
| |
7.3x
|
11/8/11
|
| |
12/30/11
|
| |
McCormick & Schmick’s Restaurant Group
|
| |
Landry’s
|
| |
$133
|
| |
6.9x
|
5/25/11
|
| |
7/6/11
|
| |
California Pizza Kitchen
|
| |
Golden Gate Capital
|
| |
$455
|
| |
7.7x
|
11/8/10
|
| |
12/20/10
|
| |
Bubba Gump Shrimp Co.
|
| |
Landry’s
|
| |
$113
|
| |
6.5x
|
8/27/10
|
| |
10/4/10
|
| |
Logan’s Roadhouse
|
| |
Kelso & Company
|
| |
$577
|
| |
7.9x
|
6/20/10
|
| |
10/4/10
|
| |
Landry’s Restaurants
|
| |
Tilman J. Fertitta
|
| |
$1,348
|
| |
7.6x
|
5/3/10
|
| |
6/1/10
|
| |
Dave & Buster’s Holdings
|
| |
Oak Hill Capital Partners
|
| |
$570
|
| |
7.3x
|
|
| |
|
| |
Minimum
|
| |
|
| |
$101
|
| |
6.5x
|
|
| |
|
| |
Mean
|
| |
|
| |
$519
|
| |
7.8x
|
|
| |
|
| |
Median
|
| |
|
| |
$390
|
| |
7.7x
|
|
| |
|
| |
Maximum
|
| |
|
| |
$1,348
|
| |
10.4x
|
(1)
|
In millions.
|
(2)
|
Multiple not disclosed.
|
|
Merger Consideration Implied Multiple:
|
| |
Implied Multiple Reference Range:
|
|
|
EV / LTM EBITDA
|
| |
EV/ LTM EBITDA
|
|
|
8.7x
|
| |
6.5x – 10.4x
|
|
|
Merger
|
| |
Implied Equity Value per Share Reference Range:
|
|
|
Consideration
|
| |
EV/ LTM EBITDA
|
|
|
$14.00
|
| |
$10.88 – $16.46
|
|
|
Merger Consideration
|
| |
Implied Equity Value per Share Reference Ranges:
|
|
|
$14.00
|
| |
$10.60 – $17.88
|
|
•
|
companies operating in the broader U.S. consumer industry, including apparel, consumer products, consumer services, food & beverage, restaurants and retail; and
|
•
|
transactions that were announced between January 1, 2018 and the date of Piper Sandler’s opinion and subsequently closed or were in process of closing.
|
|
Merger
Consideration
|
| |
Implied Equity Value per Share Reference Ranges:
|
| ||||||
|
One-Day Premia to Undisturbed
|
| |
One-Day Premia to Announcement
|
| |
90-Day Premia to Announcement
|
| |||
|
$14.00
|
| |
$8.12 – $11.53
|
| |
$13.53 – $26.35
|
| |
$7.70 – $25.13
|
|
Name
|
| |
No. of
Shares of
Company
Common
Stock
Subject to
Options(1)
|
| |
Value of
Options
($)(2)
|
| |
No. of
Restricted
Share
Awards(3)
|
| |
Value of
Restricted
Share
Awards
($)(4)
|
| |
No. of
Performance
Share
Awards(5)
|
| |
Value of
Performance
Share
Awards
($)(6)
|
| |
No. of
Shares of
Company
Common
Stock
Issuable in
Exchange
for Class B
Units(7)
|
| |
Value of
Class B
Units
($)(8)
|
| |
Total
Value
($)
|
Executive Officers
|
|||||||||||||||||||||||||||
Lonnie J. Stout II
|
| |
375,000
|
| |
1,645,000
|
| |
9,875
|
| |
138,250
|
| |
19,750
|
| |
276,500
|
| |
58,201
|
| |
814,808
|
| |
2,874,558
|
Mark A. Parkey
|
| |
175,000
|
| |
771,550
|
| |
36,375
|
| |
509,250
|
| |
32,750
|
| |
458,500
|
| |
17,460
|
| |
244,443
|
| |
1,983,743
|
J. Michael Moore
|
| |
217,000
|
| |
1,149,550
|
| |
15,750
|
| |
220,500
|
| |
—
|
| |
—
|
| |
17,460
|
| |
244,443
|
| |
1,614,493
|
Jessica L. Hagler
|
| |
93,500
|
| |
588,400
|
| |
14,500
|
| |
203,000
|
| |
—
|
| |
—
|
| |
2,910
|
| |
40,741
|
| |
832,141
|
Jason S. Parks
|
| |
86,500
|
| |
563,130
|
| |
14,500
|
| |
203,000
|
| |
—
|
| |
—
|
| |
1,746
|
| |
24,444
|
| |
790,574
|
Non-Employee Directors
|
|||||||||||||||||||||||||||
Douglas K. Ammerman
|
| |
60,000
|
| |
263,200
|
| |
5,250
|
| |
73,500
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
336,700
|
Carl J. Grassi
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
Timothy T. Janszen(9)
|
| |
60,000
|
| |
263,200
|
| |
5,250
|
| |
73,500
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
336,700
|
Ronald B. Maggard, Sr.
|
| |
60,000
|
| |
263,200
|
| |
5,250
|
| |
73,500
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
336,700
|
Frank R. Martire
|
| |
60,000
|
| |
263,200
|
| |
5,250
|
| |
73,500
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
336,700
|
Raymond R. Quirk
|
| |
60,000
|
| |
263,200
|
| |
5,250
|
| |
73,500
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
336,700
|
(1)
|
This column includes the number of shares of Company common stock subject to outstanding Company options. For Mr. Stout, options with respect to 31,250 of such shares are unvested; for Mr. Parkey, options with respect to 15,000 of such shares are unvested; for Mr. Moore, options with respect to 46,500 of such shares are unvested; for each of Ms. Hagler and Mr. Parks, options with respect to 35,125 of such shares are unvested; and for each of Messrs. Ammerman, Janszen, Maggard, Martire and Quirk, options with respect to 5,000 of such shares are unvested.
|
(2)
|
The consideration for options is equal to the number of shares of Company common stock subject to outstanding Company options multiplied by $14.00, less the applicable exercise price of the option.
|
(3)
|
This column includes the number of shares of Company common stock subject to outstanding Company restricted share awards.
|
(4)
|
The consideration for Company restricted share awards in this column is equal to the number of shares of Company common stock subject to the award multiplied by $14.00.
|
(5)
|
This column includes the number of shares of Company common stock subject to outstanding Company performance share awards.
|
(6)
|
The consideration for Company performance share awards in this column is equal to the number of shares of Company common stock subject to the award multiplied by $14.00.
|
(7)
|
This column includes the number of shares of Company common stock issuable to such holder in connection with the exchange of Class B Units. Mr. Stout holds 416,673 Class B Units, Messrs. Parkey and Moore hold 125,002 Class B Units, Ms. Hagler holds 20,834 Class B Units and Mr. Parks holds 12,500 Class B Units. All such Class B Units are fully vested.
|
(8)
|
The consideration for Class B Units in this column is equal to the number of shares of Company common stock issuable in connection with the exchange of such Class B Units multiplied by $14.00.
|
(9)
|
The financial benefit of all the equity awards described in this row will accrue to Newport Global Opportunities Fund I-A LP.
|
(1)
|
Represents base salary (plus applicable bonus factor) x 2.99, plus an estimate of the health insurance benefits Mr. Stout would be entitled to for a period of 36 months following the termination date, an amount of which equal to 18 months of base salary will be paid under his severance benefits agreement, and the balance of which will be paid under his employment agreement.
|
(2)
|
Represents base salary (plus applicable bonus factor) x 2.99, plus an estimate of the health insurance benefits the executive would be entitled to for a period of 36 months following the termination date.
|
(3)
|
Represents base salary (plus applicable bonus factor) x 1.5, plus an estimate of the health insurance benefits the executive would be entitled to for a period of 18 months following the termination date.
|
Executive Officer
|
| |
Vested Salary
Continuation Benefit
($)(1)
|
Lonnie J. Stout II
|
| |
2,891,861
|
Mark A. Parkey
|
| |
1,130,470
|
J. Michael Moore
|
| |
1,092,366
|
(1)
|
Represents the accrued retirement benefit liability as of July 4, 2021.
|
Named Executive
Officer
|
| |
Cash
($)(1)
|
| |
Equity
($)(2)
|
| |
Non-Qualified
Deferred
Compensation
($)(3)
|
| |
Perquisites/
Benefits
($)(4)
|
| |
Tax
Reimbursement
($)(5)
|
| |
Total
($)
|
Mark A. Parkey
|
| |
2,016,545
|
| |
1,983,743
|
| |
—
|
| |
49,435
|
| |
—
|
| |
4,049,723
|
Lonnie J. Stout II
|
| |
2,259,205
|
| |
2,874,558
|
| |
—
|
| |
49,435
|
| |
—
|
| |
5,183,198
|
J. Michael Moore
|
| |
1,227,423
|
| |
1,614,493
|
| |
—
|
| |
49,435
|
| |
—
|
| |
2,891,351
|
(1)
|
Cash. The amounts in this column include cash payments to which the executive officers would be entitled in connection with the merger or under such executive officer’s employment agreement with the Company, some of which are “double-trigger” benefits contingent upon such executive officer’s qualifying termination or resignation, and some of which are “single-trigger” benefits. The estimated amount of each such payment is shown in the following table:
|
Named Executive Officer
|
| |
Cash
Severance
($)(a)
|
| |
Bonus
($)(b)
|
| |
Other Accrued
but Unpaid
Benefits
($)(c)
|
| |
Total
($)
|
Mark A. Parkey
|
| |
1,580,652
|
| |
417,500
|
| |
18,393
|
| |
2,016,545
|
Lonnie J. Stout II
|
| |
1,847,157
|
| |
400,000
|
| |
12,048
|
| |
2,259,205
|
J. Michael Moore
|
| |
1,073,083
|
| |
147,500
|
| |
6,840
|
| |
1,227,423
|
(a)
|
The amounts in this column represent the “double-trigger” lump sum cash severance payments to which the executive officers would be entitled under their respective employment agreements upon a qualifying termination or resignation. Such payments are equal to the executive officer’s annual base salary plus a bonus factor (as further described above), multiplied by 2.99 (which for Mr. Stout includes all amounts payable under both his employment agreement and his severance benefits agreement). As described above, payments to named executive officers are subject to the execution, delivery and non-revocation of a general release in the form provided by such named executive officer’s employment agreement. The amounts in this column do not include cash severance payments to which the named executive officers would be entitled to under their respective salary continuation agreements upon a qualifying termination or resignation, because such agreements are fully vested and it is not anticipated that the transactions will have any effect on such salary continuation agreements. See the section entitled “— Vested Retirement Benefits” above for a description of amounts payable pursuant to the salary continuation agreements.
|
(b)
|
The amounts in this column represent “single-trigger” pro-rated annual cash incentive bonus payments. As further described above, pursuant to the merger agreement, the Company may, prior to the effective time, elect to pay the named executive officers a pro-rata portion of the annual bonus to which he would have been entitled for the first half of calendar year 2021 based on the performance of the Company through the end of such period.
|
(c)
|
The amounts in this column represent each executive officer’s accrued but unpaid benefits under the Company’s applicable plans and policies, including 401k matching, matching on nonqualified deferred compensation, and vacation time. Such amounts are payable pursuant to such named executive officer’s employment agreement in the event of a qualifying termination or resignation.
|
(2)
|
Equity. The amounts in this column represent the aggregate “single-trigger” payments to be made in respect of Company options, unvested Company restricted share awards and unvested Company performance share awards and Class B Units, in each case that are outstanding as of the assumed effective time of August 20, 2021. Pursuant to the merger agreement, all such awards will become vested in full at the effective time. The consideration for Company options is equal to the number of shares of Company common stock subject to the option multiplied by $14.00, less the applicable exercise price of the option. The consideration for Company restricted share awards and performance share awards is equal to the number of shares of Company common stock subject to the award
|
Named Executive Officer
|
| |
Unvested
Stock Options
($)
|
| |
Vested Stock
Options
($)
|
| |
Restricted
Share Awards
($)
|
| |
Performance
Share Awards
($)
|
| |
Class B
Units
($)(a)
|
| |
Total
($)
|
Mark A. Parkey
|
| |
66,750
|
| |
704,800
|
| |
509,250
|
| |
458,500
|
| |
244,443
|
| |
1,983,743
|
Lonnie J. Stout II
|
| |
139,062
|
| |
1,505,938
|
| |
138,250
|
| |
276,500
|
| |
814,808
|
| |
2,874,558
|
J. Michael Moore
|
| |
350,250
|
| |
799,300
|
| |
220,500
|
| |
—
|
| |
244,443
|
| |
1,614,493
|
(a)
|
All Class B Units reflected in this column are fully vested.
|
(3)
|
Non-Qualified Deferred Compensation. The executive officers are not entitled to any pension or non-qualified deferred compensation benefit enhancements for a qualifying termination in connection with a change in control or otherwise.
|
(4)
|
Perquisites/Benefits. The amounts in this column represent the estimated value of continued coverage for 36 months following the merger for health insurance benefits. Amounts in this column are all “double trigger” in nature and are payable only upon a qualifying termination or resignation during the 36 months following the merger pursuant to the terms of such named executive officer’s employment agreement. In accordance with applicable SEC rules, the estimated value of such benefits was calculated based on the same assumptions used for financial reporting purposes.
|
(5)
|
Tax Reimbursements. The amounts reflected in the table set forth above do not include the value of any tax gross-up payments in respect of excise taxes imposed under Section 4999 of the Code. If any portion of the payments and benefits provided pursuant to such named executive officer’s employment agreements would be considered “excess parachute payments” under Section 280G of the Code, the Company is obligated to reimburse such named executive officer for such amount. The actual amount of any tax gross-up payments will only be determined at such time as any severance payments become payable to the named executive officer and will be based on a number of factors, including, without limitation, the value of the restrictive covenants to which the named executive officer is subject at that time. The Company may take action to reduce the amount of any such potential tax gross-up payments including, without limitation, obtaining third-party valuations of restrictive covenants.
|
•
|
a citizen or individual resident of the United States;
|
•
|
a corporation, or other entity taxable as a corporation for U.S. federal income tax purposes, created or organized in or under the laws of the United States, any state thereof or the District of Columbia;
|
•
|
a trust if it (i) is subject to the primary supervision of a court within the United States, and one or more United States persons (as defined in the Code) have the authority to control all substantial decisions of the trust, or (ii) has a valid election in effect under applicable Treasury regulations to be treated as a United States person (as defined in the Code); or
|
•
|
an estate that is subject to U.S. federal income tax on its income regardless of its source.
|
•
|
entities or arrangements treated as partnerships for U.S. federal income tax purposes or persons that hold their Company common stock through entities or arrangements treated as partnerships for U.S. federal income tax purposes;
|
•
|
persons who hold Company common stock as part of a straddle, hedging transaction, short-sale, synthetic security, conversion transaction or other integrated investment or risk reduction transaction;
|
•
|
persons whose functional currency is not the U.S. dollar;
|
•
|
persons who acquired Company common stock through the exercise of employee stock options or otherwise as compensation;
|
•
|
persons subject to the U.S. alternative minimum tax;
|
•
|
banks, insurance companies, mutual funds and other financial institutions;
|
•
|
regulated investment companies;
|
•
|
real estate investment trusts;
|
•
|
tax-exempt organizations;
|
•
|
governmental agencies or instrumentalities;
|
•
|
tax-qualified retirements plans;
|
•
|
brokers or dealers in securities or foreign currencies;
|
•
|
holders who exercise appraisal rights;
|
•
|
U.S. expatriates; and
|
•
|
traders in securities that elect the mark-to-market method of accounting.
|
•
|
Homer Tovar vs. J. Alexander’s Holdings, Inc., et al., Case No. 1:21-cv-06925, filed on August 17, 2021 in the U.S. District Court for the Southern District of New York (the “Tovar Complaint”);
|
•
|
Clifton McNalley vs. J. Alexander’s Holdings, Inc., et al., Case No. 1:21-cv-06961, filed on August 18, 2021 in the U.S. District Court for the Southern District of New York (the “McNalley Complaint”);
|
•
|
Matthew Hopkins vs. J. Alexander's Holdings, Inc., et al., Case No. 1:21-cv-07063, filed on August 20, 2021 in the U.S. District Court for the Southern District of New York (the “Hopkins Complaint”); and
|
•
|
Todd Augenbaum vs. J. Alexander's Holdings, Inc., et al., Case No. 1:21-cv-04740, filed on August 23, 2021 in the U.S. District Court for the Eastern District of New York (the “Augenbaum Complaint,” and collectively with the Tovar Complaint, the McNalley Complaint and the Hopkins Complaint, the “Complaints”).
|
•
|
are not intended as statements of fact, but rather as a way of allocating the risk between the parties in the event the statements therein prove to be inaccurate;
|
•
|
in many cases, are subject to important qualifications and limitations, including certain confidential disclosures that were made between the parties in connection with the negotiation of the merger agreement, which disclosures are not reflected in the merger agreement itself, and may or may not be fully reflected in the Company’s public disclosures;
|
•
|
may no longer be true as of a given date; and
|
•
|
may apply standards of materiality or material adverse effect in a way that is different from what may be viewed as material to you or other shareholders.
|
•
|
the valid existence, good standing, qualification, and corporate (or other entity) power and authority of the Company and each of its subsidiaries;
|
•
|
the capitalization of the Company, including the number of shares of Company common stock and Company equity awards outstanding and the ownership of the equity interests of the Company;
|
•
|
the Company’s corporate authority and authorization relating to the execution, delivery and performance of the merger agreement;
|
•
|
the absence of (1) any breach of, conflict with or violation of the organizational documents of the Company or any of its subsidiaries, (2) any violation of, conflict with, loss of benefit under, default
|
•
|
the consents and approvals required by, or filings or notices required to be made with, governmental authorities in connection with the transactions contemplated by the merger agreement;
|
•
|
the reports, schedules, forms, statements, financial statements, and other documents of the Company required by the SEC;
|
•
|
the absence of any off-balance sheet arrangements by which the Company or any of its subsidiaries are party to;
|
•
|
the establishment and maintenance of certain disclosure controls and procedures and internal control over financial reporting;
|
•
|
the absence of undisclosed liabilities;
|
•
|
labor and employment matters;
|
•
|
the absence of certain material changes in the business of the Company, including that there was not a material adverse effect with respect to the Company and its subsidiaries, individually or in the aggregate, since April 4, 2021;
|
•
|
compliance with applicable laws and permits;
|
•
|
the absence of certain legal proceedings and governmental orders;
|
•
|
tax returns and other tax matters;
|
•
|
the employee benefit plans and other agreements, plans and policies with or concerning employees of the Company and its subsidiaries;
|
•
|
material contracts;
|
•
|
the absence of franchise arrangements and inapplicability of franchise laws;
|
•
|
intellectual property;
|
•
|
privacy and data security;
|
•
|
title to or valid leasehold interests in real property;
|
•
|
environmental matters and the absence of lawsuits against the Company and its subsidiaries pertaining to environmental laws and the Company’s and its subsidiaries’ compliance with such laws;
|
•
|
the inapplicability of any anti-takeover laws or similar anti-takeover provisions of the Company’s charter or bylaws to the merger;
|
•
|
brokers and finders’ fees related to the merger;
|
•
|
the receipt by the board of the opinion from the Company’s financial advisor as to the fairness, from a financial point of view, of the consideration to be paid to the holders of shares of Company common stock pursuant to the merger agreement;
|
•
|
the Company’s suppliers;
|
•
|
quality and safety of the Company’s food and beverage products;
|
•
|
insurance policies; and
|
•
|
transactions with affiliates of the Company.
|
•
|
Parent’s and Merger Sub’s valid existence, good standing, qualification, and corporate power and authority;
|
•
|
Parent’s and Merger Sub’s corporate authority and authorization relating to the execution, delivery and performance of the merger agreement;
|
•
|
the absence of (1) any conflict with or violation of the organizational documents of Parent or Merger Sub, (2) any violation of, conflict with, loss of benefit, default under, termination right triggered, performance accelerated, or lien created with respect to the properties or assets of Parent or Merger Sub under any contract or permit to which Parent or Merger Sub is bound and (3) any conflict with or violation of applicable laws, in each case, as a result of the execution and delivery by Parent or Merger Sub of the merger agreement and the consummation by Parent or Merger Sub of the transactions contemplated by the merger agreement;
|
•
|
the consents and approvals required by, or filings or notices required to be made with, governmental authorities in connection with the transactions contemplated by the merger agreement;
|
•
|
the accuracy of information supplied by Parent and Merger Sub for inclusion in this proxy statement;
|
•
|
compliance with applicable laws;
|
•
|
the absence of certain legal proceedings and governmental orders;
|
•
|
the absence of a need for a vote of Parent equityholders on the merger;
|
•
|
financing sources and commitments;
|
•
|
the financial capability and availability of all funds necessary to enable Parent to make the payment in the aggregate amount of the merger consideration and all other amounts required to be paid in connection with the consummation of and the transactions contemplated by the merger agreement;
|
•
|
the ownership by Parent and its subsidiaries (including Merger Sub) of Company common stock;
|
•
|
the absence of certain agreements between Parent, Merger Sub, or any of their affiliates and the Company;
|
•
|
the ownership and operations of Merger Sub;
|
•
|
brokers and finders’ fees related to the merger; and
|
•
|
the knowledge and sophistication of Parent and Merger Sub.
|
•
|
any changes in general United States or global economic conditions, except to the extent that such changes have a disproportionate adverse effect on the Company and its subsidiaries, taken as a whole, relative to the adverse effect such changes have on others operating in the upscale casual dining segment of the restaurant industry in the geographies in which the Company and its subsidiaries operate;
|
•
|
any changes in conditions generally affecting the upscale casual dining segment of the restaurant industry, except to the extent that such changes have a disproportionate adverse effect on the Company and its subsidiaries, taken as a whole, relative to the adverse effect such changes have on others operating in the upscale casual dining segment of the restaurant industry in the geographies in which the Company and its subsidiaries operate;
|
•
|
any decline, in and of itself, in the market price or trading volume of Company common stock (but Parent and Merger Sub are not precluded from asserting that the facts or occurrences giving rise to or contributing to such decline that are not otherwise excluded from the definition of material adverse effect should be deemed to constitute, or be taken into account in determining whether there has been, or would reasonably be expected to be, a material adverse effect);
|
•
|
any regulatory, legislative or political conditions, including any trade wars or tariffs, or securities, credit, financial, debt or other capital markets conditions, or the economy in each case in the United States or any foreign jurisdiction, except to the extent that such conditions have a disproportionate adverse effect on the Company and its subsidiaries, taken as a whole, relative to the adverse effect such changes have on others operating in the upscale casual dining segment of the restaurant industry in the geographies in which the Company and its subsidiaries operate;
|
•
|
any failure, in and of itself, by the Company to meet any internal or published projections, forecasts, estimates or predictions in respect of revenues, earnings or other financial or operating metrics for any period (but Parent and Merger Sub are not precluded from asserting that the facts or occurrences giving rise to or contributing to such failure that are not otherwise excluded from the definition of material adverse effect should be deemed to constitute, or be taken into account in determining whether there has been, or would reasonably be expected to be, a material adverse effect);
|
•
|
the public announcement of the merger agreement, the merger or the identity of Parent, Merger Sub or their respective subsidiaries, including the impact of any of the foregoing on the relationships, contractual or otherwise, of the Company or any of its subsidiaries with customers, suppliers, officers, employees, governmental entities or any other third persons (provided that this exception does not apply as it relates to certain representations and warranties as further described in the merger agreement);
|
•
|
any change of any rule, regulation, ordinance, order, protocol or any other law of or by any governmental entity, except to the extent that such changes have a disproportionate adverse effect on the Company and its subsidiaries, taken as a whole, relative to the adverse effect such changes have on others operating in the upscale casual dining segment of the restaurant industry in the geographies in which the Company and its subsidiaries operate;
|
•
|
any change in generally accepted accounting principles in the United States (“GAAP”) (or authoritative interpretations thereof), except to the extent that such changes have a disproportionate
|
•
|
any geopolitical conditions, the outbreak or escalation of hostilities, any acts of war, sabotage or terrorism, or any escalation or worsening of any such acts of war, sabotage or terrorism threatened or underway as of the date of the merger agreement, except to the extent that such events have a disproportionate adverse effect on the Company and its subsidiaries, taken as a whole, relative to the adverse effect such changes have on others operating in the upscale casual dining segment of the restaurant industry in the geographies in which the Company and its subsidiaries operate;
|
•
|
any taking of any action at the written request of Parent or Merger Sub;
|
•
|
any reduction, in and of itself, in the credit rating of the Company or any of its subsidiaries to the extent attributable to the expected consummation of the merger (but Parent and Merger Sub are not precluded from asserting that the facts or occurrences giving rise to or contributing to such reduction that are not otherwise excluded from the definition of material adverse effect should be deemed to constitute, or be taken into account in determining whether there has been, or would reasonably be expected to be, a material adverse effect);
|
•
|
any hurricane, earthquake, flood or other natural disasters, epidemics, disease outbreaks, pandemics or other public health emergencies (including COVID-19), acts of god or any change resulting from weather conditions, except to the extent that such events have a disproportionate adverse effect on the Company and its subsidiaries, taken as a whole, relative to the adverse effect such changes have on others operating in the upscale casual dining segment of the restaurant industry in the geographies in which the Company and its subsidiaries operate;
|
•
|
any action taken by the Company which is required by the terms and conditions of the merger agreement; or
|
•
|
(a) any action taken by Parent, Merger Sub or any of their respective affiliates that results in a breach of or default under the merger agreement or (b) the omission of an action that was required to be taken by Parent, Merger Sub or any of their respective affiliates pursuant to the merger agreement.
|
•
|
amend or propose or agree to amend, in any material respect, the Company charter or Company bylaws or any similar organizational documents of any subsidiary;
|
•
|
(A) declare, set aside, make or pay any dividend or other distribution (whether in cash, stock and/or property) in respect of any of its capital stock or set any record date therefor, except for dividends or distributions by any wholly-owned subsidiary of the Company to the Company or to any other wholly-owned subsidiary of the Company, and distributions to pay taxes by JAX LLC to holders of Class B Units as required by the LLC agreement, (B) adjust, split, combine, subdivide or reclassify any of its capital stock or issue or propose or authorize the issuance of any other securities (including options, warrants or any similar security exercisable for, or convertible into, such other security) in respect of, in lieu of, or in substitution for, shares of its capital stock, except with respect to the capital stock or securities of any subsidiary, in connection with transactions among the Company and its wholly-owned subsidiaries or among the Company’s wholly-owned subsidiaries, (C) repurchase, redeem or otherwise acquire any shares of the capital stock of the Company or any of its subsidiaries, or any other equity interests or any rights, warrants or options to acquire any such shares or interests, except (1) for repurchases of shares of Company common stock in connection with the exercise of Company options or vesting of Company performance share awards or Company restricted share awards (including in satisfaction of any amounts required to be deducted or withheld under applicable law), in each case outstanding as of the date of the merger agreement and in accordance with the Company equity incentive plan and applicable award agreements, (2) with respect to the capital stock or securities of any subsidiary, in connection with transactions among the Company and one or more of its wholly-owned subsidiaries or among the Company’s wholly-owned subsidiaries or (3) exchanges of Class B Units for shares of Company common stock in accordance with the terms of the LLC agreement;
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•
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issue, sell, grant, dispose of, pledge or otherwise encumber any shares of its capital stock or other securities (including any options, warrants or any similar security exercisable for, or convertible into, such capital stock or similar security) or make any changes (by combination, merger, consolidation, reorganization, liquidation or otherwise) in the capital structure of the Company or any of its subsidiaries, except for (A) the issuance of shares of Company common stock pursuant to contracts in effect prior to the execution and delivery of the merger agreement, (B) the issuance of shares of Company common stock in connection with the exercise of Company options or vesting of Company performance share awards or Company restricted share awards, in each case outstanding as of the date of the merger agreement and in accordance with the Company equity incentive plan and applicable award agreements, (C) issuances by a wholly-owned subsidiary of the Company of capital stock to the Company or another wholly-owned subsidiary of the Company, or (D) exchanges of Class B Units for shares of Company common stock or cash in accordance with the terms of the LLC agreement;
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•
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except (A) acquisitions of inventory and equipment for immediate consumption or use in the ordinary course of business and (B) acquisitions of assets not in excess of $250,000 individually or $3,000,000 in the aggregate, merge or consolidate with any other person or acquire any equity interests in or assets of any person, business or division thereof, or make any investment in any other person, business or any division thereof (whether through the acquisition of stock, assets or otherwise);
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•
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sell, transfer, assign, abandon, lease, sublease, license, guarantee, subject to a lien, except for a permitted lien, or otherwise dispose of or encumber any material properties, rights, assets, product lines or businesses of the Company or any of its subsidiaries (including capital stock or other equity interests of any subsidiary and including any disposals through a plan of division) except (A) pursuant to contracts in effect prior to the execution and delivery of the merger agreement, (B) any such transaction involving assets of the Company or any of its subsidiaries (excluding capital stock or other equity interests of any subsidiary) not in excess of $1,000,000 and on arm’s-length terms or (C) sales, leases or licenses of inventory and obsolete equipment in the ordinary course of business;
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•
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acquire or dispose of any real property or any interest therein;
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•
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except as set forth in the disclosure schedules delivered in connection with the merger agreement (A) make any loans, advances or capital contributions to any other person, other than immaterial advances to or on behalf of employees of the Company and its subsidiaries in the ordinary course of business for the payment of insurance premiums; (B) create, incur, redeem, repurchase, defease, prepay, or otherwise acquire or modify the terms of, any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise become liable for, the obligation of any person for borrowed money, except for, in the case of each of clause (A) and clause (B), (1) transactions among the Company and its wholly-owned subsidiaries or among the Company’s wholly-owned subsidiaries, (2) any draw-down of funds under the “loan agreement” (as defined in the merger agreement) in the ordinary course of business (including with respect to any capital expenditures permitted by clause (C)); (C) make or commit to make any capital expenditure, other than (a) capital expenditures set forth in the board-approved budget for fiscal 2021, a copy of which is attached to the disclosure schedules delivered in connection with the merger agreement, made in the ordinary course of business, (b) capital expenditures for the maintenance of existing restaurants not in excess of $250,000, individually, or $2,000,000, in the aggregate, in the ordinary course of business or (c) expenditures reasonably required to open the restaurant being developed in Madison, Alabama (provided, however, that the Company may make any unscheduled capital expenditure for immediate repair of failed systems or machinery necessary to maintain or keep a restaurant open or as a result of natural disasters that have adversely affected a restaurant or are reasonably anticipated to adversely affect a restaurant unless such actions are taken); or (D) cancel any material debts of any person to the Company or any subsidiary of the Company or waive any claims or rights of material value;
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•
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except as required pursuant to any Company benefit plan as in effect on the date of the merger agreement, as required by applicable law or as set forth in the disclosure schedules delivered in connection with the merger agreement, (A) increase the annual compensation or other benefits payable or provided to the Company’s directors or officers, (B) except for (1) the employee salary and bonus review process and related adjustments substantially as conducted each year for restaurant-level employees and (2) promotions of or increases in compensation for restaurant-level employees earning aggregate annual base salaries or wages not in excess of $150,000 per employee made in the ordinary course of business, increase the annual compensation or benefits (including change-in-control or severance benefits) payable or provided to the Company’s or its subsidiaries’ employees, (C) hire or promote (or commit to hire or promote) (1) any employees other than in the ordinary course of business or (2) employees that, if any such employee had been employed by the Company or any of its subsidiaries on the date of the merger agreement, would have been entitled to a severance benefit pursuant to the merger agreement, or (D) establish, adopt, enter into or amend any collective bargaining agreement (or recognize or certify any labor union, labor organization, works council or group of employees as the bargaining representative for any employees of the Company or any of its subsidiaries), Company benefit plan or any other plan, trust, fund, policy or arrangement for the benefit of any current or former directors, officers or employees or any of their dependents or beneficiaries, except as required to comply with Section 409A of the Internal Revenue Code of 1986 or other applicable law;
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•
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other than the settlement, release, waiver or compromise of any pending or threatened claims, liabilities or obligations set forth in the disclosure schedules delivered in connection with the merger agreement or in connection with any shareholder allegations, disputes or pending or threatened litigation against the Company and/or its officers, directors, employees and representatives relating to the Company’s exploration of strategic alternatives, the merger agreement or the merger (which matters, for the avoidance of doubt, are addressed exclusively in the merger agreement), settle, release, waive or compromise any pending or threatened material claim for an amount in excess of the amount of the specifically corresponding reserve established on the consolidated balance sheet of the Company as reflected in the most recent applicable Company SEC document plus any applicable third party insurance proceeds, or that entails (A) the incurrence of any obligation (other than the payment of money) to be performed by the Company or its subsidiaries following the effective time that is, individually or in the aggregate, material to the Company and its subsidiaries, taken as a whole, or (B) obligations that would impose any material restrictions on the business or operations of the Company or any of its subsidiaries;
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•
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except as set forth in the disclosure schedules delivered in connection with the merger agreement, (A) enter into a lease or contract that would constitute a Company material contract under the merger agreement had it been effective as of the date of the merger agreement, (B) modify, amend or terminate any such contract or any Company material contract or lease in any material respect, (C) waive, delay the exercise of, release or assign any material rights or claims under any Company material contract or lease outside the ordinary course of business, or (D) enter into any contract or lease which contains a change of control or similar provision;
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•
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enter into any franchise agreements or take any action that would cause the Company or its subsidiaries to be subject to any franchise laws;
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•
|
grant, extend, waive or modify any material rights in or to, or sell, assign, lease, transfer, let lapse, abandon or otherwise dispose of, any material intellectual property;
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•
|
alter or amend in any material respect any existing accounting methods, principles or practices, except as may be required by GAAP or applicable law;
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•
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(A) revoke or change any material tax election, (B) change any material method of tax accounting, (C) file any amended tax return, (D) take action to surrender any claim for a refund of taxes that, in each case, individually or in the aggregate, would materially and adversely affect the tax liability of the Company or any subsidiary, (E) change the entity classification of the Company or any of its subsidiaries, (F) consent to any extension or waiver of the limitation period applicable to any material tax claim or assessment or (G) take any action that would reasonably be expected to have a materially adverse impact on the tax position of the Company or any subsidiary;
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•
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settle or compromise any income tax claim or assessment, or enter into any closing agreement with any taxing authority;
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•
|
propose, adopt or enter into a plan of complete or partial liquidation, dissolution, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its subsidiaries;
|
•
|
adopt, propose, effect or implement any “shareholder rights plan,” “poison pill” or similar arrangement that would restrict, prohibit or otherwise affect the consummation of the transactions contemplated under the merger agreement;
|
•
|
fail to maintain in full force and effect material insurance policies covering the Company and its subsidiaries and their respective properties, assets and businesses in a form and amount consistent with past practice in all material respects;
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•
|
enter into any new line of business outside of its existing business or engage in any discounting, promotional or similar plan other than in the ordinary course of business;
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•
|
implement or announce any material reductions in labor force, mass lay-offs or plant closings, early retirement programs, or new severance programs or policies concerning employees of the Company or any of its subsidiaries (excluding routine employee terminations or severance payments in the ordinary course of business);
|
•
|
amend or modify the letter of engagement of the financial advisor and any such other financial advisors as are engaged by the Company, if any, in a manner that materially increases the Company’s obligations thereunder or the fee or commission payable by the Company; or
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•
|
authorize or commit or agree to take any of the foregoing actions.
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•
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initiate, solicit, knowingly facilitate or knowingly encourage (publicly or otherwise) (including by way of providing access to non-public information or the business, properties, assets or personnel of the Company or any of its subsidiaries to any person or its representatives and its affiliates) any inquiries regarding, or the making, submission or announcement of any proposal or offer that constitutes, or would reasonably be expected to lead to an acquisition proposal;
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•
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engage or enter into, continue or otherwise participate in any discussions or negotiations with respect to, or provide any non-public information or data concerning, the Company or its subsidiaries to any person relating to, or that would reasonably be expected to lead to, any acquisition proposal or otherwise cooperate with or assist or participate in, or knowingly facilitate such inquiries, proposals, discussions or negotiations;
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•
|
grant to any person any waiver, amendment or release under any standstill or confidentiality agreement or any takeover statute unless, in each case, the Company’s board of directors (or a committee thereof) first determines that the failure to take such action would be inconsistent with the Company directors’ fiduciary duties under applicable law; or
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•
|
otherwise facilitate any such inquiries, proposals, discussions or negotiations or any effort or attempt by any person to make an acquisition proposal.
|
•
|
provide non-public information and data concerning the Company to the person or group making such acquisition proposal and its representatives and financing sources in accordance with a confidentiality agreement that contains provisions no less favorable in the aggregate to the Company than those contained in the confidentiality agreement between the Company and Parent (it being understood that such confidentiality agreement does not need to contain any standstill or similar obligation that would prohibit or restrain such person from making, or amending or revising, an acquisition proposal); provided that the Company concurrently furnishes Parent and Merger Sub with all such nonpublic information delivered to such person or group, to the extent not previously made available to Parent and Merger Sub; and
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•
|
engage in discussions or negotiations with such person or group regarding such acquisition proposal.
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•
|
withhold, withdraw, qualify, condition or modify (or publicly resolve or publicly propose to withhold, withdraw, qualify, condition or modify), in a manner adverse to Parent and Merger Sub, the recommendation of the board to approve the merger agreement;
|
•
|
fail to include the recommendation of the board in this proxy statement;
|
•
|
adopt, approve, authorize, endorse, declare advisable or publicly recommend to propose to adopt, approve, authorize, endorse or declare advisable any acquisition proposal; or
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•
|
take action in favor of, make any recommendation or other public statement in support of, or fail to recommend against, any acquisition in any solicitation or recommendation statement made within ten (10) business days after the commencement of such acquisition proposal.
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•
|
the Company has complied in all material respects with its obligations under the non-solicitation provisions of the merger agreement;
|
•
|
the board concludes in good faith, after consultation with its outside financial advisors and outside legal counsel, that such acquisition proposal constitutes a superior proposal;
|
•
|
the board concludes in good faith, after consultation with its outside legal counsel, that the failure to make a recommendation withdrawal and terminate the merger agreement would be inconsistent with its fiduciary duties;
|
•
|
the board, prior to making a recommendation withdrawal or terminating the merger agreement, as applicable, provides Parent with at least four business days (or such shorter period as is specified in the sixth bullet point below) prior written notice of its intention to take such action, and provides to Parent a copy of the superior proposal, a copy of any proposed acquisition agreements and a copy of any financing commitments relating to such superior proposal (or, in each case, if not provided in writing to the Company, a written summary of the terms and conditions of such superior proposal and the identity of the person making any such acquisition proposal);
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•
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during the four business days following such written notice (or such shorter period as is specified in the sixth bullet point below), if requested by Parent, the Company and its representatives will have negotiated in good faith with Parent and Merger Sub and its representatives to make amendments to the terms and conditions of the merger agreement; and
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•
|
at the end of the four business day period described in the preceding bullet points, the board (or a committee thereof) concludes in good faith, after consultation with its outside financial advisors and outside legal counsel (and after taking into account any adjustment or modification of the terms of the merger agreement proposed by Parent and Merger Sub that would, if accepted by the Company, be binding on Parent and Merger Sub), that the acquisition proposal continues to be a superior proposal. The parties have agreed that any material revisions to such superior proposal will be deemed to be a new acquisition proposal for purposes of the non-solicitation provisions of the merger agreement and the Company will be required to comply with the applicable terms of the non-solicitation provisions of the merger agreement anew with respect thereto, except that the deadline for such new written notice will be two business days.
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•
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the Company has given Parent at least four business days’ prior written notice of its intention to take such action, and specifies in reasonable detail the applicable Company intervening event;
|
•
|
if requested by Parent, the Company will have negotiated in good faith with Parent and Merger Sub and its representatives during the four business days following such written notice to make amendments to the terms and conditions of the merger agreement; and
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•
|
following the end of the four business day period, the board (or a committee thereof) will have considered in good faith any revisions to the terms of the merger agreement in writing by Parent and Merger Sub that would, if accepted by the Company, be binding upon Parent and Merger Sub, and concludes in good faith, after consultation with its outside financial advisors and outside legal counsel, such revisions would not change the determination of the board of the need for an intervening event recommendation withdrawal. Any material changes related to such Company intervening event will require the Company to comply with the applicable terms of the non-solicitation provisions of the merger agreement anew with respect thereto, except that the deadline for such new written notice will be two business days.
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•
|
taking and disclosing to the Company shareholders a position contemplated by Rule 14e-2(a)(2-3) or Rule 14d-9 promulgated under the Exchange Act,
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•
|
making any “stop, look and listen” communication to the Company shareholders pursuant to Rule 14d-9(f) under the Exchange Act,
|
•
|
complying with Item 1012(a) of Regulation M-A promulgated under the Exchange Act,
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•
|
informing any person of the existence of the provisions contained in non-solicitation section of the merger agreement,
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•
|
complying with the Company’s disclosure obligations under U.S. federal or state law with regard to an acquisition proposal, or
|
•
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making any disclosure to the Company shareholders unrelated to an acquisition proposal (including regarding the business, financial condition or results of operations of the Company and its subsidiaries) that the Company’s board of directors (or a committee thereof) has determined to make in good faith;
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•
|
the preparation and filing of this proxy statement;
|
•
|
expenses and transfer taxes;
|
•
|
public announcements with respect to the transactions contemplated by the merger agreement;
|
•
|
certain notice requirements with respect to notice or other communications received by a party to the merger agreement from certain persons;
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•
|
ensuring that no state anti-takeover laws become applicable to the merger;
|
•
|
delisting and deregistration of the Company’s common stock;
|
•
|
reporting requirements under Section 16 of the Exchange Act;
|
•
|
certain obligations of Parent to consummate the merger; and
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•
|
Parent’s requirement to secure financing to fund the merger and the Company’s cooperation in connection with the arrangement of any financing.
|
•
|
the approval of the merger agreement by the affirmative vote of shareholders holding a majority of the outstanding shares of Company common stock;
|
•
|
no (1) temporary restraining order or preliminary or permanent injunction or other order by any federal or state court or other tribunal of competent jurisdiction preventing consummation of the merger will be in effect, (2) applicable law prohibiting the consummation of merger will be in effect; and
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•
|
the early termination or expiration of the waiting period under the HSR Act will have occurred and be in full force and effect.
|
•
|
the accuracy of the representations and warranties of the Company set forth in the merger agreement both at and as of July 2, 2021 and as of and as though made on the closing date (except for such representations and warranties that are expressly made as of a specified date, which must be true and correct as of such specified date), but subject to a “material adverse effect,” materiality or other standard, as applicable, as provided in the merger agreement;
|
•
|
the Company having performed or complied in all material respects with all agreement and covenants required to be performed by the Company under the merger agreement at or prior to the closing;
|
•
|
the absence of material adverse effect with respect to the Company since July 2, 2021;
|
•
|
Parent’s receipt of a signed certificate from an executive officer of the Company confirming the satisfaction of the conditions described in the three preceding bullet points;
|
•
|
Upon request by Parent, Parent’s receipt of written resignation letters from each of the members of the respective boards of directors, managers and officers of the Company and each of its subsidiaries; and
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•
|
the Company’s and Parent’s receipt of an executed consent and exchange agreement from each holder of Class B Units, to effectuate the exchange of Class B Units contemplated by the merger agreement, with respect to all Class B Units held by each holder.
|
•
|
the accuracy of the representations and warranties of Parent and Merger Sub set forth in the merger agreement both at and as of July 2, 2021 and as of and as though made on the closing date (except for such representations and warranties that are expressly made as of a specified date, which must be true and correct as of such specified date), but subject to a “material adverse effect” or materiality standard, as applicable, as provided in the merger agreement;
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•
|
each of Parent and Merger Sub having performed or complied in all material respects with all agreements and covenants required to be performed by Parent and Merger Sub under the merger agreement at or prior to the closing; and
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•
|
the Company’s receipt of a signed certificate from an executive officer of Parent and Merger Sub confirming the satisfaction of the conditions described in the two preceding bullet points.
|
•
|
by mutual written consent of Parent and the Company;
|
•
|
by either Parent or the Company, if:
|
•
|
the merger has not been completed on or before December 31, 2021 (“termination date”); provided that the right to terminate the merger agreement will not be available to any party if its action or failure to act constitutes a material breach or violation of any of its covenants, agreements or other obligations under the merger agreement, and any such material breach or violation or failure has been the principal cause of or directly resulted in the failure of the merger to be consummated prior to the termination date;
|
•
|
any permanent restraint in effect has become final and nonappealable; provided, however, that the right to terminate the merger agreement will not be available to any party if its action or failure to act constitutes a material breach or violation of any of its covenants, agreements or other obligations under the merger agreement, and any such material breach or violation or failure has been the principal cause of, or directly resulted in, such restraint; or
|
•
|
the requisite shareholder approval has not been obtained when voted upon at the special meeting.
|
•
|
by Parent if:
|
•
|
(1) the Company has breached any of its representations or warranties contained in the merger agreement or has failed to perform or comply with any of its obligations, covenants or agreements required to be performed under the merger agreement, in either case, such breach or failure would result in a failure of the conditions to the obligations of Parent and Merger Sub to complete the merger which relate to the accuracy of the representations and warranties of the Company or the Company’s performance of its agreements and covenants in the merger agreement in all material respects, and (2) such breach or failure to perform or comply is incurable or, if curable, is not cured by the earlier of (x) the termination date and (y) thirty days following the Company’s receipt of Parent’s written notice of such breach, which notice must specify in reasonable detail the nature of such breach or failure; provided, however, that the right to terminate the merger agreement is not available to Parent if Parent or Merger Sub have breached any of their respective representations or warranties contained in the merger agreement or have failed to perform all of their respective obligations, covenants or agreements required to be performed under the merger
|
•
|
prior to the effective time (1) the board or any of its committees has effected a recommendation withdrawal or (2) the Company has entered into an alternative acquisition agreement; or
|
•
|
there has been a Company material adverse effect.
|
•
|
by the Company if:
|
•
|
(1) Parent or Merger Sub has breached any of its representations or warranties contained in this Agreement or has failed to perform or comply with any of its obligations, covenants or agreements required to be performed under the merger agreement, in either case, such breach or failure would result in a failure of the conditions to the obligations of the Company to complete the merger which relate to the accuracy of the representations and warranties of Parent and Merger Sub or Parent’s or Merger Sub’s performance of its agreements and covenants in the merger agreement in all material respects, and (2) such breach or failure to perform or comply is incurable or, if curable, is not cured by the earlier of (x) the termination date and (y) thirty days following Parent’s receipt of the Company’s written notice of such breach, which notice must specify in reasonable detail the nature of such breach or failure; provided, however, that the right to terminate the merger agreement is not available to the Company if the Company has breached any of its respective representations or warranties contained in the merger agreement or has failed to perform all of its respective obligations, covenants or agreements required to be performed under the merger agreement, in either case, such breach or failure would result in a failure of the conditions to the obligations of Parent to complete the merger which relate to the accuracy of the representations and warranties of the Company or the Company’s performance of its agreements and covenants in the merger agreement in all material respects;
|
•
|
prior to obtaining the Company shareholder approval, (A) immediately prior to or concurrently with the termination of the merger agreement, the Company, subject to complying in all material respects with the terms of the merger agreement, including the non-solicitation provisions, enters into one or more alternative acquisition agreements that the Company’s board of directors has determined constitutes a superior proposal (provided that such alternative acquisition agreement(s) was not the result of an acquisition proposal solicited in breach of the non-solicitation provisions of the merger agreement) and (B) the Company immediately prior to or concurrently with such termination pays to Parent or its designees the termination fee; or
|
•
|
at any time prior to the effective time (A) all of the conditions to closing have been satisfied (other than those conditions that by their terms are to be satisfied at the closing, each of which is capable of being satisfied at the closing); (B) at least five (5) business days prior to exercising its right to termination, the Company has irrevocably notified Parent in writing that it is ready, willing and able to consummate the merger; (C) Parent and Merger Sub fail to consummate the merger within five (5) business days of the date of such notice; and (D) at all times during such five (5) business day period, the Company stood ready, willing and able to consummate the merger.
|
•
|
the merger agreement is terminated by the Company in accordance with its right to terminate the merger agreement to enter into a definitive agreement relating to a superior proposal;
|
•
|
the merger agreement is terminated by Parent in accordance with its right to terminate the merger agreement because the board has effected a recommendation withdrawal or the Company has entered into an alternative acquisition agreement; or
|
•
|
(i) Parent terminates the merger agreement due to the Company’s breach of its representations and warranties or Parent or the Company terminates the merger agreement because shareholder approval was not obtained, (ii) prior to the date of such termination (but after the date of the merger agreement) a bona fide acquisition proposal is publicly announced or is otherwise communicated in writing to the Company’s board of directors (and, in the event of a termination because shareholder approval was not obtained, not withdrawn prior to the special meeting), and (iii) within twelve (12) months after the date of such termination, the Company enters into a definitive agreement with respect to or otherwise consummates an acquisition proposal (provided that all references to twenty percent (20%) in the definition of acquisition proposal are deemed to be changed to fifty percent (50%) solely purposes of this provision).
|
1.
|
persons known to the Company to be the beneficial owners of more than five percent of the Company common stock;
|
2.
|
each of our current directors;
|
3.
|
each of our named executive officers named in the Summary Compensation Table presented in the Company’s proxy statement for its annual meeting of shareholders filed with the SEC on May 13, 2021; and
|
4.
|
all of our directors and executive officers as a group.
|
Name and Address of Beneficial Owner
|
| |
Amount of
Common Stock
Beneficially
Owned(1)
|
| |
Percentage of
Stock
Common
Outstanding
|
Ancora Holdings Inc.
6060 Parkland Blvd., Suite 200
Cleveland, OH 44124
|
| |
1,133,305(2)
|
| |
7.52%
|
Hill Path Capital LP
150 East 58th Street, 32nd Floor
New York, NY 10155
|
| |
932,685(3)
|
| |
6.18%
|
Newport Global Opportunities Fund I-A LP
21 Waterway Avenue, Suite 150
The Woodlands, TX 77380
|
| |
1,703,991(4)
|
| |
11.26%
|
Vanguard Group Inc.
100 Vanguard Boulevard
Malvern, PA 19355
|
| |
764,517(5)
|
| |
5.07%
|
Douglas K. Ammerman**
|
| |
117,754(6)
|
| |
*
|
Carl J. Grassi**
|
| |
20,500(7)
|
| |
*
|
Timothy T. Janszen**
|
| |
1,703,991(4)
|
| |
11.26%
|
Ronald B. Maggard, Sr.**
|
| |
117,177(8)
|
| |
*
|
Frank R. Martire**
|
| |
176,000(9)
|
| |
1.16%
|
Raymond R. Quirk**
|
| |
168,798(10)
|
| |
1.12%
|
Lonnie J. Stout II****
|
| |
447,423(11)
|
| |
2.90%
|
Mark A. Parkey***
|
| |
308,087(12)
|
| |
2.02%
|
J. Michael Moore***
|
| |
208,062(13)
|
| |
1.36%
|
All directors and executive officers as a group (11 persons)
|
| |
3,447,051(14)
|
| |
21.36%
|
*
|
Less than one percent.
|
**
|
Director.
|
***
|
Named executive officer.
|
****
|
Director and named executive officer.
|
(1)
|
Unless otherwise indicated, each shareholder has sole voting and dispositive power with respect to all shares shown. Unless otherwise noted, the address of each beneficial owner is c/o J. Alexander’s Holdings, Inc., 3401 West End Avenue, Suite 260, P.O. Box 24300, Nashville, TN 37202. Unless otherwise indicated, all information is based upon the Company’s records or information provided to the Company by the applicable beneficial owner.
|
(2)
|
Ancora Holdings Inc. (“Ancora”) has shared voting power with respect to 1,080,742 shares and shared dispositive power with respect to all 1,133,305 shares. Information is based solely on the Schedule 13D/A filed with the SEC by Ancora on July 7, 2021.
|
(3)
|
Hill Path Capital LP (“Hill Path”) has sole voting power and sole dispositive power with respect to all 932,685 shares. Information is based solely on the Schedule 13F filed with the SEC by Hill Path on May 17, 2021.
|
(4)
|
Newport Global Opportunities Fund I-A LP (“Newport Fund”) has shared voting and dispositive power with respect to 1,627,991 shares. Timothy T. Janszen is the Chief Executive Officer of Newport Global Advisors LLC, which is the general partner of Newport Global Advisors LP (“Newport”), the investment advisor to Newport Fund. As a result, Mr. Janszen may be deemed to own beneficially, and holds shared voting and dispositive power with respect to, such 1,627,991 shares. Mr. Janszen’s address is c/o Newport Global Advisors LP, 21 Waterway Avenue, Suite 150, The Woodlands, TX 77380. Includes 55,000 shares issuable upon the exercise of certain Company options held by Mr. Janszen as well as 5,250 unvested Company restricted share awards held by Mr. Janszen. As a result of agreements between Mr. Janszen and Newport Fund, Newport Fund may be deemed to have beneficial ownership over these Company options and Company restricted share awards received by Mr. Janszen as compensation for service on the board.
|
(5)
|
Vanguard Group Inc. (“Vanguard”) has shared voting power with respect to 3,521 of these shares. Vanguard has sole dispositive power with respect to 758,296 shares, and shared dispositive power with respect to 6,221 shares. Information is based solely on the Schedule 13G filed with the SEC by Vanguard on February 10, 2021.
|
(6)
|
Includes 55,000 shares issuable upon the exercise of certain Company options and 5,250 unvested Company restricted share awards held by Mr. Ammerman.
|
(7)
|
Includes 10,000 shares that are held in the Second Restatement of Declaration of Trust of Carl J. Grassi, dated 3/3/2014, Carl J. Grassi Grantor and Trustee.
|
(8)
|
Includes 55,000 shares issuable upon the exercise of certain Company options held by Mr. Maggard, 5,250 unvested Company restricted share awards held by Mr. Maggard, and 41,177 shares of Company common stock held by the Ronald B. Maggard Revocable Trust.
|
(9)
|
Includes 55,000 shares issuable upon the exercise of certain Company options held by Mr. Martire, 5,250 unvested Company restricted share awards held by Mr. Martire, and 100,000 shares of Company common stock held by a family trust of which Mr. Martire and his spouse are co-trustees.
|
(10)
|
Includes 55,000 shares issuable upon the exercise of certain Company options held by Mr. Quirk, 5,250 unvested Company restricted share awards held by Mr. Quirk, 84,737 shares of Company common stock held by Quirk 2002 Trust, 2,716 shares of Common Stock held by the Raymond Quirk 2004 Trust, and 27 shares of Company common stock held by Fidelity National Financial Inc.’s 401(k) plan that are attributable to Mr. Quirk.
|
(11)
|
Includes 343,750 shares issuable upon the exercise of certain Company options, 9,875 unvested Company restricted share awards and 19,750 unvested Company performance share awards held by Mr. Stout.
|
(12)
|
Includes 160,000 shares issuable upon the exercise of certain Company options, 36,375 unvested Company restricted share awards, and 32,750 unvested Company performance share awards held by Mr. Parkey.
|
(13)
|
Includes 170,500 shares issuable upon the exercise of certain Company options and 15,750 unvested Company restricted share awards held by Mr. Moore.
|
(14)
|
Includes 1,059,000 shares issuable upon the exercise of certain Company options, 117,250 unvested Company restricted share awards, and 52,500 unvested Company performance share awards, which are held by the directors and executive officers.
|
1.
|
The Company’s Annual Report on Form 10-K for the fiscal year ended January 3, 2021, filed with the SEC on March 18, 2021, as amended on April 29, 2021;
|
2.
|
The Company’s Quarterly Reports on Form 10-Q for the quarter ended April 4, 2021, filed with the SEC on May 18, 2021, and for the quarter ended July 4, 2021, filed with the SEC on August 17, 2021;
|
3.
|
The Company’s Current Reports on Form 8-K, filed with the SEC on July 2, 2021, July 6, 2021 and July 6, 2021; and
|
4.
|
The Company’s Definitive Proxy Statement, filed with the SEC on May 13, 2021.
|
|
| |
|
| |
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| | | | |||
| | | |
If to Parent or Merger Sub, to:
|
||||||
|
| |
|
| |
|
|
| |
SPB Hospitality LLC
|
|||
|
| |
19219 Katy Freeway
|
|||
|
| |
Suite 500
|
|||
|
| |
Houston, Texas 77094
|
|||
|
| |
Attention:
|
| |
James Mazany
|
|
| |
Email:
|
| |
jim.mazany@SPBHospitality.com
|
|
| |
|
| |
|
with a copy to (which shall not constitute notice):
|
||||||
|
| |
|
| |
|
|
| |
Hunton Andrews Kurth LLP
|
|||
|
| |
951 E. Byrd Street
|
|||
|
| |
Riverfront Plaza, East Tower
|
|||
|
| |
Richmond, Virginia 23219
|
|||
|
| |
Attention:
|
| |
Steven M. Haas
|
|
| |
Email:
|
| |
shaas@hunton.com
|
|
| |
|
| |
|
If to the Company (prior to the Effective Time), to:
|
||||||
|
| |
|
| |
|
|
| |
3401 West End Avenue, Suite 260
|
|||
|
| |
P.O. Box 24300
|
|||
|
| |
Nashville, Tennessee 37202
|
|||
|
| |
Attention:
|
| |
President and Chief Executive Officer
|
|
| |
Email:
|
| |
mparkey@jalexanders.com
|
|
| |
|
| |
|
with a copy to (which shall not constitute notice):
|
||||||
|
| |
|
| |
|
|
| |
Bass, Berry & Sims PLC
|
|||
|
| |
150 Third Avenue South, Suite 2800
|
|||
|
| |
Nashville, Tennessee 37201
|
|||
|
| |
Attention:
|
| |
F. Mitchell Walker, Jr.
|
|
| |
Email:
|
| |
MWalker@bassberry.com
|
|
| |
SPB HOSPITALITY LLC
|
|||
|
| |
|
| |
|
|
| |
By:
|
| |
/s/ James Mazany
|
|
| |
Name:
|
| |
James Mazany
|
|
| |
Title:
|
| |
Chief Executive Officer
|
|
| |
TITAN MERGER SUB, INC.
|
|||
|
| |
|
| |
|
|
| |
By:
|
| |
/s/ James Mazany
|
|
| |
Name:
|
| |
James Mazany
|
|
| |
Title:
|
| |
Chief Executive Officer
|
|
| |
J. ALEXANDER’S HOLDINGS, INC.
|
|||
|
| |
|
| |
|
|
| |
By:
|
| |
/s/ Mark A. Parkey
|
|
| |
Name:
|
| |
Mark A. Parkey
|
|
| |
Title:
|
| |
President and Chief Executive Officer
|
Sincerely,
|
| |
|
|
| |
|
/s/ PIPER SANDLER & CO.
|
| |
|
|
| |
|
PIPER SANDLER & CO.
|
| |
|
|
| |
(i)
|
| |
If to Parent or Merger Sub:
|
|||
|
| |
|
| |
|
| |
|
|
| |
|
| |
SPB Hospitality LLC
|
|||
|
| |
|
| |
19219 Katy Freeway
|
|||
|
| |
|
| |
Suite 500
|
|||
|
| |
|
| |
Houston, Texas 77094
|
|||
|
| |
|
| |
Attention:
|
| |
James Mazany
|
|
| |
|
| |
Email:
|
| |
jim.mazany@SPBHospitality.com
|
|
| |
|
| |
|
| |
|
|
| |
|
| |
with a copy (which shall not constitute notice) to:
|
|||
|
| |
|
| |
|
| |
|
|
| |
|
| |
Hunton Andrews Kurth LLP
|
|||
|
| |
|
| |
951 E. Byrd Street
|
|||
|
| |
|
| |
Riverfront Plaza, East Tower
|
|||
|
| |
|
| |
Richmond, Virginia 23219
|
|||
|
| |
|
| |
Attention:
|
| |
Steven M. Haas
|
|
| |
|
| |
Email:
|
| |
shaas@huntonak.com
|
|
| |
|
| |
|
| |
|
|
| |
(ii)
|
| |
If to Shareholder:
|
|||
|
| |
|
| |
|
| |
|
|
| |
|
| |
As set forth on Schedule A hereto, in each case with a copy (which shall not constitute notice) to:
|
|||
|
| |
|
| |
|
| |
|
|
| |
|
| |
Bass, Berry & Sims PLC
|
|||
|
| |
|
| |
150 Third Avenue South, Suite 2800
|
|||
|
| |
|
| |
Nashville, Tennessee 37201
|
|||
|
| |
|
| |
Attention:
|
| |
F. Mitchell Walker, Jr.
|
|
| |
|
| |
Email:
|
| |
MWalker@bassberry.com
|
|
| |
Parent:
|
|||
|
| |
|
| |
|
|
| |
SPB Hospitality LLC
|
|||
|
| |
|
| |
|
|
| |
By:
|
| |
/s/ James Mazany
|
|
| |
Name:
|
| |
James Mazany
|
|
| |
Title:
|
| |
Chief Executive Officer
|
|
| |
|
| |
|
|
| |
Merger Sub:
|
|||
|
| |
|
| |
|
|
| |
Titan Merger Sub, Inc.
|
|||
|
| |
|
| |
|
|
| |
By:
|
| |
/s/ James Mazany
|
|
| |
Name:
|
| |
James Mazany
|
|
| |
Title:
|
| |
Chief Executive Officer
|
|
| |
(i)
|
| |
If to Parent or Merger Sub:
|
|||
|
| |
|
| |
SPB Hospitality LLC
|
|||
|
| |
|
| |
19219 Katy Freeway
|
|||
|
| |
|
| |
Suite 500
|
|||
|
| |
|
| |
Houston, Texas 77094
|
|||
|
| |
|
| |
Attention:
|
| |
James Mazany
|
|
| |
|
| |
Email:
|
| |
jim.mazany@SPBHospitality.com
|
|
| |
|
| |
|
| |
|
|
| |
|
| |
with a copy (which shall not constitute notice) to:
|
|||
|
| |
|
| |
|
| |
|
|
| |
|
| |
Hunton Andrews Kurth LLP
|
|||
|
| |
|
| |
951 E. Byrd Street
|
|||
|
| |
|
| |
Riverfront Plaza, East Tower
|
|||
|
| |
|
| |
Richmond, Virginia 23219
|
|||
|
| |
|
| |
Attention:
|
| |
Steven M. Haas
|
|
| |
|
| |
Email:
|
| |
shaas@huntonak.com
|
|
| |
|
| |
|
| |
|
|
| |
(ii)
|
| |
If to Shareholder:
|
|||
|
| |
|
| |
As set forth on Schedule A hereto, in each case with a copy (which shall not constitute notice) to:
|
|||
|
| |
|
| |
|
| |
|
|
| |
|
| |
Bass, Berry & Sims PLC
|
|||
|
| |
|
| |
150 Third Avenue South, Suite 2800
|
|||
|
| |
|
| |
Nashville, Tennessee 37201
|
|||
|
| |
|
| |
Attention:
|
| |
F. Mitchell Walker, Jr.
|
|
| |
|
| |
Email:
|
| |
MWalker@bassberry.com
|
|
| |
Parent:
|
|||
|
| |
|
| |
|
|
| |
SPB Hospitality LLC
|
|||
|
| |
|
| |
|
|
| |
By:
|
| |
/s/ James Mazany
|
|
| |
Name:
|
| |
James Mazany
|
|
| |
Title:
|
| |
Chief Executive Officer
|
|
| |
|
| |
|
|
| |
Merger Sub:
|
|||
|
| |
|
| |
|
|
| |
Titan Merger Sub, Inc.
|
|||
|
| |
|
| |
|
|
| |
By:
|
| |
/s/ James Mazany
|
|
| |
Name:
|
| |
James Mazany
|
|
| |
Title:
|
| |
Chief Executive Officer
|
|
| |
Shareholder:
|
|||
|
| |
|
| |
|
|
| |
Ancora Holdings Inc.
|
|||
|
| |
|
| |
|
|
| |
By:
|
| |
/s/ Frederick DiSanto
|
|
| |
Name:
|
| |
Frederick DiSanto
|
|
| |
Title:
|
| |
Chairman and Chief Executive Officer
|
|
| |
(i)
|
| |
If to Parent or Merger Sub:
|
|||
|
| |
|
| |
|
| |
|
|
| |
|
| |
SPB Hospitality LLC
|
|||
|
| |
|
| |
19219 Katy Freeway
|
|||
|
| |
|
| |
Suite 500
|
|||
|
| |
|
| |
Houston, Texas 77094
|
|||
|
| |
|
| |
Attention:
|
| |
James Mazany
|
|
| |
|
| |
Email:
|
| |
jim.mazany@SPBHospitality.com
|
|
| |
|
| |
|
| |
|
|
| |
|
| |
with a copy (which shall not constitute notice) to:
|
|||
|
| |
|
| |
|
| |
|
|
| |
|
| |
Hunton Andrews Kurth LLP
|
|||
|
| |
|
| |
951 E. Byrd Street
|
|||
|
| |
|
| |
Riverfront Plaza, East Tower
|
|||
|
| |
|
| |
Richmond, Virginia 23219
|
|||
|
| |
|
| |
Attention:
|
| |
Steven M. Haas
|
|
| |
|
| |
Email:
|
| |
shaas@huntonak.com
|
|
| |
|
| |
|
| |
|
|
| |
(ii)
|
| |
If to a Shareholder:
|
|||
|
| |
|
| |
As set forth on Schedule A hereto, in each case with a copy (which shall not constitute notice) to:
|
|||
|
| |
|
| |
|
| |
|
|
| |
|
| |
Bass, Berry & Sims PLC
|
|||
|
| |
|
| |
150 Third Avenue South, Suite 2800
|
|||
|
| |
|
| |
Nashville, Tennessee 37201
|
|||
|
| |
|
| |
Attention:
|
| |
F. Mitchell Walker, Jr.
|
|
| |
|
| |
Email:
|
| |
MWalker@bassberry.com
|
|
| |
Parent:
|
|||
|
| |
|
| |
|
|
| |
SPB Hospitality LLC
|
|||
|
| |
|
| |
|
|
| |
By:
|
| |
/s/ James Mazany
|
|
| |
Name:
|
| |
James Mazany
|
|
| |
Title:
|
| |
Chief Executive Officer
|
|
| |
|
| |
|
|
| |
Merger Sub:
|
|||
|
| |
|
| |
|
|
| |
Titan Merger Sub, Inc.
|
|||
|
| |
|
| |
|
|
| |
By:
|
| |
/s/ James Mazany
|
|
| |
Name:
|
| |
James Mazany
|
|
| |
Title:
|
| |
Chief Executive Officer
|
|
| |
Shareholder:
|
|
| |
|
|
| |
/s/ Douglas K. Ammerman
|
|
| |
Douglas K. Ammerman
|
|
| |
Shareholder:
|
|
| |
|
|
| |
/s/ Carl J. Grassi
|
|
| |
Carl J. Grassi
|
|
| |
Shareholder:
|
|
| |
|
|
| |
/s/ Timothy T. Janszen
|
|
| |
Timothy T. Janszen
|
|
| |
Shareholder:
|
|
| |
|
|
| |
/s/ Ronald B. Maggard, Sr.
|
|
| |
Ronald B. Maggard, Sr.
|
|
| |
Shareholder:
|
|
| |
|
|
| |
/s/ Raymond R. Quirk
|
|
| |
Raymond R. Quirk
|
|
| |
Shareholder:
|
|
| |
|
|
| |
/s/ Lonnie J. Stout II
|
|
| |
Lonnie J. Stout II
|
|
| |
Shareholder:
|
|
| |
|
|
| |
/s/ Mark A. Parkey
|
|
| |
Mark A. Parkey
|
|
| |
Shareholder:
|
|
| |
|
|
| |
/s/ J. Michael Moore
|
|
| |
J. Michael Moore
|
|
| |
Shareholder:
|
|
| |
|
|
| |
/s/ Jessica L. Hagler
|
|
| |
Jessica L. Hagler
|
1 Year J Alexanders Chart |
1 Month J Alexanders Chart |
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