<SUBMISSION>
<ACCESSION-NUMBER>0000950144-05-004607
<TYPE>DEF 14A
<PUBLIC-DOCUMENT-COUNT>2
<PERIOD>20050527
<FILING-DATE>20050429
<DATE-OF-FILING-DATE-CHANGE>20050429
<EFFECTIVENESS-DATE>20050429
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>ALEXANDERS J CORP
<CIK>0000103884
<ASSIGNED-SIC>5812
<IRS-NUMBER>620854056
<STATE-OF-INCORPORATION>TN
<FISCAL-YEAR-END>0103
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>DEF 14A
<ACT>34
<FILE-NUMBER>001-08766
<FILM-NUMBER>05784140
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>3401 WEST END AVE
<STREET2>P O BOX 24300
<CITY>NASHVILLE
<STATE>TN
<ZIP>37203
<PHONE>6152691900
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>3401 WEST END AVE
<STREET2>SUITE 260
<CITY>NASHVILLE
<STATE>TN
<ZIP>37203
</MAIL-ADDRESS>
<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>VOLUNTEER CAPITAL CORP / TN /
<DATE-CHANGED>19920703
</FORMER-COMPANY>
<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>WINNERS CORP
<DATE-CHANGED>19890910
</FORMER-COMPANY>
<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>VOLUNTEER CAPITAL CORP
<DATE-CHANGED>19820520
</FORMER-COMPANY>
</FILER>
<DOCUMENT>
<TYPE>DEF 14A
<SEQUENCE>1
<FILENAME>g93860def14a.htm
<DESCRIPTION>J. ALEXANDER'S CORPORATION
<TEXT>
<HTML>
<HEAD>
<TITLE>J. ALEXANDER'S CORPORATION</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">SCHEDULE 14A<BR>(RULE 14A-101)</FONT></B>

<P align="center">
<B><FONT size="2">INFORMATION REQUIRED IN PROXY STATEMENT</FONT></B>

<P align="center">
<B><FONT size="2">SCHEDULE 14A INFORMATION</FONT></B>


<P align="center">
<FONT size="2">Proxy Statement Pursuant to Section 14(a) of
the Securities</FONT>

<DIV align="center">
<FONT size="2">Exchange Act of 1934 (Amendment No.
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;)</FONT>
</DIV>

<P align="left">
<FONT size="2">Filed by the Registrant&nbsp;
<FONT face="wingdings">&#120;</FONT>
</FONT>

<P align="left">
<FONT size="2">Filed by a Party other than the Registrant&nbsp;
<FONT face="wingdings">&#111;</FONT>
</FONT>

<P align="left"><FONT size="2">
Check the appropriate box:
</font>





<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
        <TD width="49%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="48%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
        <TD align="left" valign="top">

<FONT size="2"><FONT face="wingdings">&#111;</FONT>&nbsp;&nbsp;Preliminary
Proxy Statement</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top">
        <DIV style="margin-left:10px; text-indent:-10px">
        <FONT size="2"><FONT face="wingdings">&nbsp;</FONT>&nbsp;
        </FONT></DIV>
        </TD>
</TR>


<TR>
        <TD colspan="3" align="left" valign="top">

<FONT size="2"><FONT face="wingdings">&#111;</FONT>&nbsp;&nbsp;<B>Confidential,
for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))</B></FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top">
        <DIV style="margin-left:10px; text-indent:-10px">
        <FONT size="2"><FONT face="wingdings">&nbsp;</FONT>&nbsp;
        </FONT></DIV>
        </TD>
</TR>

<TR>
        <TD colspan="3" align="left" valign="top">
        <FONT size="2"><FONT face="wingdings">&#120;</FONT>&nbsp;&nbsp;Definitive
        Proxy Statement
        </FONT></TD>
</TR>

<TR>
        <TD colspan="3" align="left" valign="top">
        <FONT size="2"><FONT face="wingdings">&#111;</FONT>&nbsp;&nbsp;Definitive
        Additional Materials
        </FONT></TD>
</TR>

<TR>
        <TD colspan="3" align="left" valign="top">
        <FONT size="2"><FONT face="wingdings">&#111;</FONT>&nbsp;&nbsp;Soliciting
        Material Pursuant to &#167;240.14a-12
        </FONT></TD>
</TR>
</TABLE>
</CENTER>

<P align="center"><font size="2">J. Alexander&#146;s Corporation</FONT>


<DIV align="center">
<HR size="1" width="100%" align="left" noshade>
</DIV>

<DIV align="center">
<FONT size="2">(Name of Registrant as Specified In Its Charter)
</FONT>
</DIV>

<P align="center">


<DIV align="left">
<HR size="1" width="100%" align="left" noshade>
</DIV>

<DIV align="center">
<FONT size="2">(Name of Person(s) Filing Proxy Statement, if
other than the Registrant)
</FONT>
</DIV>

<P align="left">
<FONT size="2">Payment of Filing Fee (Check the appropriate box):
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
        <TD width="4%"></TD>
        <TD width="96%"></TD>
</TR>

<TR valign="top">
        <TD><FONT size="2"><FONT face="wingdings">&#120;</FONT></FONT></TD>
        <TD align="left">
        <FONT size="2">No fee required.
        </FONT></TD>
</TR>

<TR>
        <TD>&nbsp;</TD>
</TR>

<TR valign="top">
        <TD><FONT size="2"><FONT face="wingdings">&#111;</FONT></FONT></TD>
        <TD align="left">
        <FONT size="2">Fee computed on table below per Exchange Act
        Rules&nbsp;14a-6(i)(4) and 0-11.
        </FONT></TD>
</TR>
</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
        <TD width="9%"></TD>
        <TD width="91%"></TD>
</TR>

<TR valign="top">
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)</FONT></TD>
        <TD align="left">
        <FONT size="2">Title of each class of securities to which
        transaction applies:
        </FONT></TD>
</TR>
</TABLE>

<P align="right">
<HR size="1" width="91%" align="right" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
        <TD width="9%"></TD>
        <TD width="91%"></TD>
</TR>

<TR valign="top">
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)</FONT></TD>
        <TD align="left">
        <FONT size="2">Aggregate number of securities to which
        transaction applies:
        </FONT></TD>
</TR>
</TABLE>

<P align="right">
<HR size="1" width="91%" align="right" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
        <TD width="9%"></TD>
        <TD width="91%"></TD>
</TR>

<TR valign="top">
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)</FONT></TD>
        <TD align="left">
        <FONT size="2">Per unit price or other underlying value of
        transaction computed pursuant to Exchange Act Rule&nbsp;0-11
        (set forth the amount on which the filing fee is calculated and
        state how it was determined):
        </FONT></TD>
</TR>

</TABLE>

<P align="right">
<HR size="1" width="91%" align="right" noshade>
<P>


<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
        <TD width="9%"></TD>
        <TD width="91%"></TD>
</TR>

<TR valign="top">
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)</FONT></TD>
        <TD align="left">
        <FONT size="2">Proposed maximum aggregate value of transaction:
        </FONT></TD>
</TR>
</TABLE>

<P align="right">
<HR size="1" width="91%" align="right" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
        <TD width="9%"></TD>
        <TD width="91%"></TD>
</TR>

<TR valign="top">
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5)</FONT></TD>
        <TD align="left">
        <FONT size="2">Total fee paid:
        </FONT></TD>
</TR>
</TABLE>

<P align="right">
<HR size="1" width="91%" align="right" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
        <TD width="4%"></TD>
        <TD width="96%"></TD>
</TR>

<TR valign="top">
        <TD><FONT size="2"><FONT face="wingdings">&#111;</FONT></FONT></TD>
        <TD align="left">
        <FONT size="2">Fee paid previously with preliminary materials.
        </FONT></TD>
</TR>
<TR>
        <TD>&nbsp;</TD>
</TR>

<TR valign="top">
        <TD><FONT size="2"><FONT face="wingdings">&#111;</FONT></FONT></TD>
        <TD align="left">
        <FONT size="2">Check box if any part of the fee is offset as
        provided by Exchange Act Rule&nbsp; 0-11(a)(2) and identify the
        filing for which the offsetting fee was paid previously.
        Identify the previous filing by registration statement number,
        or the Form or Schedule and the date of its filing.
        </FONT></TD>
</TR>
</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
        <TD width="9%"></TD>
        <TD width="91%"></TD>
</TR>

<TR valign="top">
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)</FONT></TD>
        <TD align="left">
        <FONT size="2">Amount Previously Paid:
        </FONT></TD>
</TR>
</TABLE>

<P align="right">
<HR size="1" width="91%" align="right" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
        <TD width="9%"></TD>
        <TD width="91%"></TD>
</TR>

<TR valign="top">
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)</FONT></TD>
        <TD align="left">
        <FONT size="2">Form, Schedule or Registration Statement No.:
        </FONT></TD>
</TR>
</TABLE>

<P align="right">
<HR size="1" width="91%" align="right" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
        <TD width="9%"></TD>
        <TD width="91%"></TD>
</TR>

<TR valign="top">
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)</FONT></TD>
        <TD align="left">
        <FONT size="2">Filing Party:
        </FONT></TD>
</TR>
</TABLE>

<P align="right">
<HR size="1" width="91%" align="right" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
        <TD width="9%"></TD>
        <TD width="91%"></TD>
</TR>

<TR valign="top">
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)</FONT></TD>
        <TD align="left">
        <FONT size="2">Date Filed:
        </FONT></TD>
</TR>
</TABLE>

<P align="right">
<HR size="1" width="91%" align="right" noshade>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">



<P align="center" style="font-size: 10pt"><B>J. ALEXANDER&#146;S CORPORATION<BR>
3401 West End Avenue<BR>
Suite&nbsp;260<BR>
P.O. Box 24300<BR>
Nashville, Tennessee 37202</B>



<P align="center" style="font-size: 10pt"><B>NOTICE OF ANNUAL MEETING OF SHAREHOLDERS</B>



<P align="left" style="font-size: 10pt">To the Shareholders of J. Alexander&#146;s Corporation:



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Annual Meeting of Shareholders of J. Alexander&#146;s Corporation (the &#147;Company&#148;) will be held
at the Loews Vanderbilt Hotel, 2100 West End Avenue, Nashville, Tennessee 37203 at 10:00&nbsp;a.m.,
Nashville time, on Friday, May&nbsp;27, 2005 for the following purposes:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left">(1)&nbsp;&nbsp;</TD>
    <TD>To elect six directors to hold office for a term of one year and until their
successors have been elected and qualified; and</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left">(2)&nbsp;&nbsp;</TD>
    <TD>To transact such other business as may properly come before the meeting or any
adjournment or postponement thereof.</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Only shareholders of record at the close of business on March&nbsp;21, 2005 are entitled to notice
of and to vote at the meeting or any adjournment or postponement thereof.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Your attention is directed to the Proxy Statement accompanying this notice for a more complete
statement regarding the matters to be acted upon at the meeting.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We hope very much that you will be able to be with us. If you do not plan to attend the
meeting in person, you are requested to complete, sign and date the enclosed proxy and return it
promptly in the enclosed addressed envelope, which requires no postage if mailed in the United
States.


<P align="left" style="font-size: 10pt; margin-left: 50%">By Order of the Board of Directors


<P align="left" style="font-size: 10pt; margin-left: 50%"><B>R. GREGORY LEWIS</B><BR>
<I>Secretary</I>


<P align="left" style="font-size: 10pt">April&nbsp;29, 2005




<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<!-- TOC -->
<A name="toc"><DIV align="CENTER" style="page-break-before:always"><U><B>TABLE OF CONTENTS</B></U></DIV></A>

<P><CENTER>
<TABLE border="0" width="90%" cellpadding="0" cellspacing="0">
<TR>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="76%"></TD>
</TR>
<TR><TD colspan="9"><A HREF="#000">SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT</A></TD></TR>
<TR><TD colspan="9"><A HREF="#001">PROPOSAL NO. 1: ELECTION OF DIRECTORS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#002">CORPORATE GOVERNANCE</A></TD></TR>
<TR><TD colspan="9"><A HREF="#003">EXECUTIVE COMPENSATION</A></TD></TR>
<TR><TD colspan="9"><A HREF="#004">SUMMARY COMPENSATION TABLE</A></TD></TR>
<TR><TD colspan="9"><A HREF="#005">AUDIT COMMITTEE REPORT</A></TD></TR>
<TR><TD colspan="9"><A HREF="#006">CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#007">SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#008">COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION</A></TD></TR>
<TR><TD colspan="9"><A HREF="#009">SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE</A></TD></TR>
<TR><TD colspan="9"><A HREF="#010">RELATIONSHIP WITH INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM</A></TD></TR>
<TR><TD colspan="9"><A HREF="#011">DEADLINE FOR SUBMISSION OF SHAREHOLDER PROPOSALS TO BE<BR> PRESENTED AT THE 2006 ANNUAL MEETING OF SHAREHOLDERS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#012">METHOD OF COUNTING VOTES</A></TD></TR>
<TR><TD colspan="9"><A HREF="#013">MISCELLANEOUS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#014">APPENDIX A</A></TD></TR>
</TABLE>
</CENTER>
<!-- /TOC -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>





<P align="center" style="font-size: 10pt"><B>J. ALEXANDER&#146;S CORPORATION<BR>
3401 West End Avenue<BR>
Suite&nbsp;260<BR>
P.O. Box 24300<BR>
Nashville, Tennessee 37202</B>



<P align="center" style="font-size: 10pt"><B>PROXY STATEMENT</B>



<P align="center" style="font-size: 10pt"><B>FOR ANNUAL MEETING OF SHAREHOLDERS</B>



<P align="center" style="font-size: 10pt"><B>May&nbsp;27, 2005</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The enclosed proxy is solicited by and on behalf of the Board of Directors of J. Alexander&#146;s
Corporation (the &#147;Company&#148;) for use at the Annual Meeting of Shareholders to be held on Friday, May
27, 2005, at 10:00&nbsp;a.m., Nashville time, at Loews Vanderbilt Hotel, 2100 West End Avenue,
Nashville, Tennessee 37203 and at any adjournments or postponements thereof, for the purposes set
forth in the foregoing Notice of Annual Meeting of Shareholders. Copies of the proxy, this Proxy
Statement and the attached Notice are being mailed to shareholders on or about April&nbsp;29, 2005.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proxies may be solicited by mail, telephone or telegraph. All costs of this solicitation will
be borne by the Company. The Company does not anticipate paying any compensation to any party other
than its regular employees for the solicitation of proxies, but may reimburse brokerage firms and
others for their reasonable expenses in forwarding solicitation material to beneficial owners.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shares represented by such proxies will be voted in accordance with the choices specified
thereon. If no choice is specified, the shares will be voted FOR the election of the director
nominees named herein. The Board of Directors does not know of any other matters which will be
presented for action at the meeting, but the persons named in the proxy intend to vote or act with
respect to any other proposal which may be properly presented for action according to their best
judgment in light of the conditions then prevailing.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A proxy may be revoked by a shareholder at any time before its exercise by attending the
meeting and voting in person, by filing with the Secretary of the Company a written revocation or
by duly executing a proxy bearing a later date.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each share of the Company&#146;s Common Stock, $.05 par value (the &#147;Common Stock&#148;), issued and
outstanding on March&nbsp;21, 2005 (the &#147;Record Date&#148;), will be entitled to one vote on all matters to
come before the meeting. As of the Record Date, there were outstanding 6,461,532 shares of Common
Stock.


<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<!-- link1 "SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT" -->
<DIV align="left"><A NAME="000"></A></DIV>

<P align="center" style="font-size: 10pt"><B>SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth, as of March&nbsp;21, 2005, certain information with respect to
those persons known to the Company to be the beneficial owners (as defined by certain rules of the
Securities and Exchange Commission (the &#147;Commission&#148;)) of more than five percent of the Common
Stock, its only voting security, and with respect to the beneficial ownership of the Common Stock
by all directors, each of the executive officers named in the Summary Compensation Table, and all
executive officers and directors of the Company as a group (9 persons). Except as otherwise
specified, the shares indicated are presently outstanding.

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="80%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Percentage of</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Amount of</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Outstanding</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Common Stock</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Common</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Name and Address of Beneficial Owner</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Beneficially Owned</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Stock (1)</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">E. Townes Duncan**</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">1,797,046</TD>
    <TD nowrap>(2)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">27.8</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">3401 West End Avenue, Suite&nbsp;520</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Nashville, TN 37203</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Solidus Company</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">1,747,846</TD>
    <TD nowrap>(3)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">27.1</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">3401 West End Avenue, Suite&nbsp;520</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Nashville, TN 37203</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">KCM Investment Advisors</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">846,200</TD>
    <TD nowrap>(4)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">13.1</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">300 Drake&#146;s Landing Road, #190</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Greenbrae, CA 94904</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Lonnie J. Stout II****</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">541,895</TD>
    <TD nowrap>(5)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">7.9</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">3401 West End Avenue, Suite&nbsp;260</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Nashville, TN 37203</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Dimensional Fund Advisors, Inc.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">415,300</TD>
    <TD nowrap>(6)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">6.4</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">1299 Ocean Avenue, 11<SUP style="font-size: 85%; vertical-align: text-top">th</SUP> Floor</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Santa Monica, CA 90401</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">J. Bradbury Reed**</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">111,521</TD>
    <TD nowrap>(7)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">1.7</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">R. Gregory Lewis***</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">107,567</TD>
    <TD nowrap>(8)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">1.7</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">J. Michael Moore***</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">52,199</TD>
    <TD nowrap>(9)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Garland G. Fritts**</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">31,800</TD>
    <TD nowrap>(10)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Mark A. Parkey***</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">31,755</TD>
    <TD nowrap>(11)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Joseph N. Steakley**</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Brenda B. Rector**</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">All directors and executive officers as a group (9 persons)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">2,674,783</TD>
    <TD nowrap>(12)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">38.4</TD>
    <TD nowrap>%</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P>
<HR size="1" width="18%" align="left" noshade color="#000000">

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top">
    <TD width="1%" nowrap align="left">*</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Less than one percent.</TD>
</TR>


<TR valign="top">
    <TD width="1%" nowrap align="left">**</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Director.</TD>
</TR>


<TR valign="top">
    <TD width="1%" nowrap align="left">***</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Named Officer.</TD>
</TR>


<TR valign="top">
    <TD width="1%" nowrap align="left">****</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Director and Named Officer.</TD>
</TR>

</TABLE>


<P align="center" style="font-size: 10pt">2
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">





<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top">
    <TD width="1%" nowrap align="left">(1)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Pursuant to the rules of the Commission, shares of Common Stock subject to options held by
directors and executive officers of the Company which are exercisable within 60&nbsp;days of March
21, 2005, are deemed outstanding for the purpose of computing such director&#146;s or executive
officer&#146;s percentage ownership and the percentage ownership of all directors and executive
officers as a group, but are not deemed outstanding for the purpose of computing the
percentage ownership of the other persons shown in the table. Unless otherwise indicated,
each individual has sole voting and dispositive power with respect to all shares shown.</TD>
</TR>

<TR><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD width="1%" nowrap align="left">(2)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Includes 9,000 shares issuable upon exercise of certain options held by Mr.&nbsp;Duncan, 1,240
shares owned by Mr.&nbsp;Duncan&#146;s wife, 1,040 shares that Mr.&nbsp;Duncan holds as custodian for minor
children, 5,760 shares that are held in trusts of which Mr.&nbsp;Duncan&#146;s wife is trustee, and
1,747,846 shares that are beneficially owned by Solidus Company (&#147;Solidus&#148;), a general
partnership of which Mr.&nbsp;Duncan is Managing Partner.</TD>
</TR>

<TR><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD width="1%" nowrap align="left">(3)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Includes 91,700 shares held by Solidus Partners, L.P., a limited partnership of which Solidus
is general partner. Solidus shares voting and dispositive power with respect to its shares
with Mr.&nbsp;Duncan, its Managing Partner, whose beneficial ownership in such shares is shown
above.</TD>
</TR>

<TR><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD width="1%" nowrap align="left">(4)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">KCM Investment Advisors (&#147;KCM&#148;) is a registered investment advisor. Information is based
solely on a Schedule&nbsp;13G/A filed with the Commission by KCM on February&nbsp;20, 2004.</TD>
</TR>

<TR><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD width="1%" nowrap align="left">(5)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Includes 360,000 shares issuable upon exercise of certain options held by Mr.&nbsp;Stout and 9,026
Employee Stock Ownership Plan (&#147;ESOP&#148;) shares allocated to Mr.&nbsp;Stout and held by the J.
Alexander&#146;s Corporation Employee Stock Ownership Trust (the &#147;Trust&#148;), as to which Mr.&nbsp;Stout
has sole voting power and shared dispositive power.</TD>
</TR>

<TR><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD width="1%" nowrap align="left">(6)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Dimensional Fund Advisors, Inc. (&#147;DFA&#148;) is a registered investment advisor. Information is
based solely on the Schedule&nbsp;13G/A filed with the Commission by DFA on February&nbsp;9, 2005.</TD>
</TR>

<TR><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD width="1%" nowrap align="left">(7)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Includes 13,000 shares issuable upon exercise of options held by Mr.&nbsp;Reed.</TD>
</TR>

<TR><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD width="1%" nowrap align="left">(8)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Includes 56,800 shares issuable upon exercise of certain options held by Mr.&nbsp;Lewis and 7,136
ESOP shares allocated to Mr.&nbsp;Lewis and held by the Trust, as to which Mr.&nbsp;Lewis has sole
voting power and shared dispositive power.</TD>
</TR>

<TR><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD width="1%" nowrap align="left">(9)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Includes 23,466 shares issuable upon the exercise of certain options held by Mr.&nbsp;Moore and
4,796 ESOP shares allocated to Mr.&nbsp;Moore and held by the Trust, as to which Mr.&nbsp;Moore has sole
voting power and shared dispositive power.</TD>
</TR>

<TR><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD width="1%" nowrap align="left">(10)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Includes 9,000 shares issuable upon exercise of certain options held by Mr.&nbsp;Fritts.</TD>
</TR>

<TR><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD width="1%" nowrap align="left">(11)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Includes 28,666 shares issuable upon the exercise of certain options held by Mr.&nbsp;Parkey and
3,089 ESOP shares allocated to Mr.&nbsp;Parkey and held by the Trust, as to which Mr.&nbsp;Parkey has
sole voting power and shared dispositive power.</TD>
</TR>

<TR><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD width="1%" nowrap align="left">(12)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Includes 499,932 shares issuable upon exercise of certain options held by the directors and
executive officers and 24,047 ESOP shares allocated to the executive officers and held by the
Trust, as to which such officers have sole voting power and shared dispositive power.</TD>
</TR>

</TABLE>


<P align="center" style="font-size: 10pt">3
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">






<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to a Stock Purchase and Standstill Agreement between Solidus, LLC (predecessor to
Solidus) and the Company dated March&nbsp;22, 1999, Solidus purchased 1,086,266 shares of Common Stock
for $3.75 per share, for an aggregate purchase price of $4,073,497.50. In addition, Solidus agreed
that (i)&nbsp;for a period of seven years, Solidus and its affiliates would not acquire or hold more
than 33% of the Company&#146;s Common Stock; (ii)&nbsp;for a period of seven years, Solidus and its
affiliates would not solicit proxies for a vote of the shareholders of the Company; (iii)&nbsp;for a
period of seven years, Solidus and its affiliates would not sell the Company&#146;s Common Stock, except
to the Company, a person, entity or group approved by the Company or to an affiliate of Solidus;
(iv)&nbsp;the above restrictions on Solidus&#146; ownership and ability to solicit proxies would terminate in
the event of certain tender offers or exchange offers, a notice filing with the Department of
Justice relating to the acquisition by a third party of more than 15% of the outstanding Common
Stock or with the Commission relating to the acquisition by a third party of more than 10% of the
outstanding Common Stock, the Company&#146;s proposing or approving a merger or other business
combination, or a change to a majority of the Company&#146;s Board of Directors over a two-year period;
and (v)&nbsp;Solidus would not exercise rights attributable to the 1,086,266 shares of Common Stock
purchased on March&nbsp;22, 1999, during the Company&#146;s rights offering in 1999.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition to the private sale to Solidus, on June&nbsp;21, 1999, the Company completed a rights
offering wherein shareholders of the Company purchased an additional 240,615 shares of common stock
at a price of $3.75 per share, which was the same price per share as stock sold in the private
sale.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In August&nbsp;2003, Solidus and the Company executed the First Amendment to Stock Purchase and
Standstill Agreement (&#147;First Amendment&#148;). Under the terms of the First Amendment, the Company
authorized Solidus to pledge the Common Stock of the Company owned by it as collateral security for
the payment and performance of Solidus&#146; obligations under a credit agreement with a bank. In the
event that Solidus defaults on its obligations to the bank, and such default results in the need to
liquidate the related collateral, the Company has a right of first refusal to purchase the pledged
stock.


<P align="center" style="font-size: 10pt">4
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<!-- link1 "PROPOSAL NO. 1: ELECTION OF DIRECTORS" -->
<DIV align="left"><A NAME="001"></A></DIV>

<P align="center" style="font-size: 10pt"><B>PROPOSAL NO. 1: ELECTION OF DIRECTORS</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Six directors are to be elected at the annual meeting for a term of one year and until their
successors shall be elected and qualified. Election of directors requires a plurality of the votes
cast in such election. It is intended that shares represented by the enclosed proxy will be voted
FOR the election of the nominees named in the table set forth below unless a contrary choice is
indicated. Each of the nominees, including each independent director, is presently a director of
the Company and was nominated by the Board. Management believes that all of the nominees will be
available and able to serve as directors, but if for any reason any should not be available or able
to serve, it is intended that such shares will be voted for such substitute nominees as may be
proposed by the Board of Directors of the Company. Certain information with respect to each of the
nominees set forth below.

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="20%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="75%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Name</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Background Information</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">E. Townes Duncan
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Mr. Duncan, 51, has been a director of the Company since May&nbsp;1989. Mr.&nbsp;Duncan
has been the Managing Partner of Solidus Company (formerly Solidus, LLC), a private investment
firm, since January&nbsp;1997. Mr.&nbsp;Duncan is also a director of Bright Horizons Family Solutions,
Inc., a childcare services company.</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Garland G. Fritts
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Mr. Fritts, 76, has been a director of the Company
since December&nbsp;1985. Since 1993, Mr.&nbsp;Fritts has been
a consultant for Fry Consultants, Inc., a management
consulting firm.</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Brenda B. Rector
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Ms. Rector, 57, has been a director since May&nbsp;2004.
From October&nbsp;1996 until March&nbsp;2004, Ms.&nbsp;Rector was
the Vice President, Controller and Chief Accounting
Officer of Province Healthcare Company, an owner and
operator of acute care hospitals in non-urban
markets.</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">J. Bradbury Reed
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Mr. Reed, 65, has been a director since May&nbsp;2000. Mr.&nbsp;Reed is a member in the
law firm of Bass, Berry &#038; Sims PLC and has served in various capacities for that firm since
1964. Bass, Berry &#038; Sims PLC has served as the Company&#146;s outside general counsel since the
Company&#146;s organization in 1971.</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Joseph N. Steakley
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Mr. Steakley, 50, has been a director since May
2004. He has served as Senior Vice President -
Internal Audit of HCA Inc., an owner and operator of
hospitals, since July&nbsp;1999. From November&nbsp;1997 to
July&nbsp;1999, Mr.&nbsp;Steakley was Vice President -
Internal Audit for HCA Inc.</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Lonnie J. Stout II
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Mr. Stout, 58, has been a director and President and
Chief Executive Officer of the Company since May
1986. Since July&nbsp;1990, Mr.&nbsp;Stout has also served as
Chairman of the Company. From 1982 to May&nbsp;1984, Mr.
Stout was a director of the Company, and served as
Executive Vice President and Chief Financial Officer
of the Company from October&nbsp;1981 to May&nbsp;1984.</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt">5
</DIV>

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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<!-- link1 "CORPORATE GOVERNANCE" -->
<DIV align="left"><A NAME="002"></A></DIV>

<P align="center" style="font-size: 10pt"><B>CORPORATE GOVERNANCE</B>



<P align="left" style="font-size: 10pt"><B>General</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company believes that good corporate governance is important to ensure that J. Alexander&#146;s
Corporation is managed for the long-term benefit of its shareholders. During the past year, the
Company has continued to review its corporate governance policies and practices and to compare them
to those suggested by various authorities on corporate governance and the practices of other public
companies. The Company has also continued to review the provisions of the Sarbanes-Oxley Act of
2002, the new and proposed rules of the Commission and the listing standards of the American Stock
Exchange (&#147;AMEX&#148;).


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#146;s Audit Committee charter can be accessed on the Company&#146;s website at
www.jalexanders.com and is included as Appendix&nbsp;A hereto.


<P align="left" style="font-size: 10pt"><B>Director Independence</B>


<P align="left" style="font-size: 10pt">The Board has determined that each of the following directors and nominees will qualify as an
&#147;independent director&#148; within the meaning of the AMEX listing standards.



<P align="center" style="font-size: 10pt">E. Townes Duncan<BR>
Garland G. Fritts<BR>
J. Bradbury Reed<BR>
Brenda B. Rector<BR>
Joseph N. Steakley



<P align="left" style="font-size: 10pt"><B>Board Member Meetings and Attendance</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company strongly encourages each member of the Board of Directors to attend the Annual
Meeting of Shareholders. All of the Company&#146;s directors attended the 2004 Annual Meeting of
Shareholders.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each of the incumbent directors of the Company attended at least 75% of the aggregate of (i)
the total number of meetings held during 2004 by the Board of Directors while he or she was a
director and (ii)&nbsp;the total number of meetings held during 2004 by all committees of the Board
while he or she was a member of such committees.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of Directors of the Company held six meetings in 2004.


<P align="left" style="font-size: 10pt"><B>Board Committee Composition</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Audit Committee</I>. The Board of Directors has an Audit Committee. The members of the Audit
Committee are currently Joseph N. Steakley (Chair), Garland G. Fritts and Brenda B. Rector, each of
whom is &#147;independent&#148; within the meaning of the AMEX listing standards and applicable Commission
regulations. In addition, the Board has determined that each of Brenda B. Rector and Joseph N.
Steakley is qualified as an &#147;audit committee financial expert&#148; within the meaning of Commission
regulations and is &#147;financially sophisticated&#148; within the meaning of the AMEX listing standards.
The Audit Committee, which held nine meetings during 2004, meets with the Company&#146;s independent
registered public accounting firm to review the Company&#146;s consolidated financial statements. It is
the function of this committee to ensure that the Company&#146;s financial statements accurately reflect
the Company&#146;s financial position and results of operations.


<P align="center" style="font-size: 10pt">6
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Compensation/Stock Option </I>Committee. The Board of Directors has a Compensation/Stock Option
Committee (the &#147;Compensation Committee&#148;). The Compensation Committee members are currently Brenda
B. Rector (Chair), E. Townes Duncan and Garland G. Fritts. The Compensation Committee is
responsible for the periodic review of management&#146;s compensation and administration of the
Company&#146;s equity incentive plan. The Compensation Committee held two meetings during 2004. The
Board has determined that each member of the Company&#146;s Compensation Committee is &#147;independent&#148;
within the meaning of the AMEX listing standards.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Nominating Committee. </I>The Company&#146;s Board of Directors currently has no standing nominating
committee, which the Board of Directors believes is appropriate, given the compact size of the
Board. The Board of Directors, including each independent director, participates in the nomination
process as described below.


<P align="left" style="font-size: 10pt"><B>Director Candidates</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Candidates for nomination to the Board of Directors, including those suggested by shareholders
in compliance with the Company&#146;s charter, bylaws and applicable law, will be submitted to the Board
of Directors with as much biographical information as is available and with a brief statement of
the candidates&#146; qualifications for Board membership.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;While the Board of Directors may consider whatever factors it deems appropriate in its
assessment of a candidate for board membership, candidates nominated to serve as directors will, at
a minimum, in the judgment of the independent directors:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left">&#149;&nbsp;&nbsp;</TD>
    <TD>be able to represent the interests of the Company and all of its shareholders and
not be disposed by affiliation or interest to favor any individual, group or class of
shareholders or other constituency;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left">&#149;&nbsp;&nbsp;</TD>
    <TD>possess relevant background, skills and abilities, and characteristics that fulfill
the needs of the Board at that time;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left">&#149;&nbsp;&nbsp;</TD>
    <TD>possess the background and demonstrated ability to contribute to the Board&#146;s
performance of its collective responsibilities, through senior executive management
experience, relevant professional or academic distinction, and/or a record of relevant
civic and community leadership;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left">&#149;&nbsp;&nbsp;</TD>
    <TD>have the highest ethical character and share the core values of the Company as
reflected in the Code of Business Conduct and Ethics;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left">&#149;&nbsp;&nbsp;</TD>
    <TD>have a reputation, both personal and professional, consistent with the image and
reputation of the Company;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left">&#149;&nbsp;&nbsp;</TD>
    <TD>have relevant expertise and experience, and be able to offer advice and guidance to
the chief executive officer based on that expertise and experience; and</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left">&#149;&nbsp;&nbsp;</TD>
    <TD>have the ability and the willingness to devote the necessary time and energy to
exercise sound business judgment.</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board will preliminarily assess the candidate&#146;s qualifications and suitability. If it is
the consensus of the independent directors that a candidate is likely to meet the criteria for
Board membership, the Board will advise the candidate of the Board&#146;s preliminary interest and, if
the candidate expresses sufficient interest will arrange interviews of the candidate with one or
more members of the Board and request such additional information from


<P align="center" style="font-size: 10pt">7
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="left" style="font-size: 10pt">the candidate as the Board deems appropriate. The independent directors will consider the
candidate&#146;s qualifications, the assessment of the individual&#146;s background, skills and abilities,
and whether such characteristics fulfill the needs of the Board at that time, confer and reach a
collective assessment as to the qualifications and suitability of the candidate for Board
membership.



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If a majority of the independent directors determine that the candidate is suitable and meets
the criteria for Board membership, the candidate will be invited to meet with senior management of
the Company, both to allow the candidate to obtain further information about the Company and to
give management a basis for input to the Board regarding the candidate. On the basis of its
assessment, and taking into consideration input from senior management, the Board will formally
consider whether to recommend the candidate&#146;s nomination for election to the Board of Directors.
Approval by a majority of the independent directors will be required to recommend the candidate&#146;s
nomination.


<P align="left" style="font-size: 10pt"><B>Code of Business Conduct and Ethics</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#146;s Board of Directors has adopted a Code of Business Conduct and Ethics applicable
to the members of its Board of Directors and officers, including the Chief Executive Officer and
Chief Financial Officer. The Company&#146;s Code of Business Conduct and Ethics may be accessed on its
website at <U>www.jalexanders.com</U> or a copy requested by writing to the following address: J.
Alexander&#146;s Corporation, Suite&nbsp;260, 3401 West End Avenue, Nashville Tennessee 37203. The Company
will make any legally required disclosures regarding amendments to, or waivers of, provisions of
the Code of Business Conduct and Ethics on its website.


<P align="left" style="font-size: 10pt"><B>Communications with Members of the Board</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shareholders interested in communicating directly with members of the Company&#146;s Board of
Directors may do so by writing to Board of Directors, c/o Corporate Secretary, J. Alexander&#146;s
Corporation, 3401 West End Avenue, Suite&nbsp;260, P.O. Box 24300, Nashville, Tennessee 37202.


<P align="center" style="font-size: 10pt">8
</DIV>

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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<!-- link1 "EXECUTIVE COMPENSATION" -->
<DIV align="left"><A NAME="003"></A></DIV>

<P align="center" style="font-size: 10pt"><B>EXECUTIVE COMPENSATION</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table provides information as to annual, long-term or other compensation during
fiscal years 2004, 2003 and 2002 for the Company&#146;s Chief Executive Officer and each of the other
executive officers of the Company who were serving as executive officers at January&nbsp;2, 2005 whose
salary and bonus exceeded $100,000 (collectively, the &#147;Named Officers&#148;).

<!-- link1 "SUMMARY COMPENSATION TABLE" -->
<DIV align="left"><A NAME="004"></A></DIV>

<P align="center" style="font-size: 10pt"><B>SUMMARY COMPENSATION TABLE</B>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="30%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="10" style="border-bottom: 1px solid #000000"><B>Annual Compensation</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000"><B>Long Term Compensation Awards</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Other Annual</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Securities</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>All Other</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center"><B>Name and Principal</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Compensation</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Restricted Stock</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Underlying</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Compensation</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Position</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Year</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Salary($)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Bonus($)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>($)(1)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Awards($)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Options(#)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>($)(4)</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Lonnie J. Stout II</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">325,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">60,938</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">25,395 </TD>
    <TD nowrap>(2)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">4,614 </TD>
    <TD nowrap>(5)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Chairman, President,</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2003</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">285,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">35,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">26,095</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,270</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Chief Executive</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2002</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">285,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">71,250</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">26,507</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,065</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Officer and Director</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">R. Gregory Lewis</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">165,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">30,938</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">17,995 </TD>
    <TD nowrap>(3)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">4,124 </TD>
    <TD nowrap>(6)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Vice-President, Chief</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2003</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">157,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18,098</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,037</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Financial Officer and</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2002</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">151,750</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">39,250</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17,408</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,950</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Secretary</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">J. Michael Moore</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">129,800</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24,338</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">18,514 </TD>
    <TD nowrap>(3)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">3,455 </TD>
    <TD nowrap>(7)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Vice-President,</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2003</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">119,800</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18,606</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,243</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Human Resources</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2002</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">115,833</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">29,950</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17,674</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,355</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">and Administration</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Mark A. Parkey</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">126,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23,625</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">17,894 </TD>
    <TD nowrap>(3)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">3,046 </TD>
    <TD nowrap>(8)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Vice-President and</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2003</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">117,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18,389</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,049</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Controller</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2002</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">110,292</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">29,250</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19,866</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,184</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P>
<HR size="1" width="18%" align="left" noshade color="#000000">

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top">
    <TD width="1%" nowrap align="left">(1)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Includes, to the extent applicable, an automobile allowance, premium cost of medical
insurance, cost of a tax preparation service, automobile expense reimbursements taxable to the
Named Officer and imputed interest under the 1999 Loan Program taxable to the Named Officer.</TD>
</TR>

<TR><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD width="1%" nowrap align="left">(2)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Includes an automobile allowance of $11,076 and $10,280 of imputed interest under the 1999
Loan Program taxable to Mr.&nbsp;Stout.</TD>
</TR>

<TR><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD width="1%" nowrap align="left">(3)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Includes an automobile allowance of $10,656.</TD>
</TR>

</TABLE>


<P align="center" style="font-size: 10pt">9
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">





<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top">
    <TD width="1%" nowrap align="left">(4)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">The ESOP shares included in this column for 2004 are valued at $7.40 per share, the closing
price of the Company&#146;s Common Stock on December&nbsp;31, 2004.</TD>
</TR>

<TR><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD width="1%" nowrap align="left">(5)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Includes the $756 premium cost of term life insurance maintained for the benefit of Mr.
Stout, $1,538 contributed by the Company to the Company&#146;s 401(k) Plan on behalf of Mr.&nbsp;Stout,
and 313 ESOP shares allocated to Mr.&nbsp;Stout.</TD>
</TR>

<TR><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD width="1%" nowrap align="left">(6)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Includes the $756 premium cost of term life insurance maintained for the benefit of Mr.
Lewis, $1,388 contributed by the Company to the Company&#146;s 401(k) Plan on behalf of Mr.&nbsp;Lewis
and 268 ESOP shares allocated to Mr.&nbsp;Lewis.</TD>
</TR>

<TR><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD width="1%" nowrap align="left">(7)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Includes the $654 premium cost of term life insurance maintained for the benefit of Mr.
Moore, $1,168 contributed by the Company to the Company&#146;s 401(k) Plan on behalf of Mr.&nbsp;Moore
and 221 ESOP shares allocated to Mr.&nbsp;Moore.</TD>
</TR>

<TR><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD width="1%" nowrap align="left">(8)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Includes the $635 premium cost of term life insurance maintained for the benefit of Mr.
Parkey, $900 contributed by the Company to the Company&#146;s 401(k) Plan on behalf of Mr.&nbsp;Parkey
and 215 ESOP shares allocated to Mr.&nbsp;Parkey.</TD>
</TR>

</TABLE>


<P align="center" style="font-size: 10pt">10
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">






<P align="left" style="font-size: 10pt"><B>Option Grants in Last Fiscal Year</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No stock options or stock appreciation rights were granted to the Named Officers in 2004.


<P align="left" style="font-size: 10pt"><B>Option Exercises and Year-End Value Table</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table provides information as to options exercised by the Named Officers during
fiscal 2004. None of the Named Officers has held or exercised separate SARs. In addition, this
table includes the number of shares covered by both exercisable and unexercisable stock options as
of January&nbsp;2, 2005. Also reported are the values for the &#147;in-the-money&#148; options, which represent
the positive spread between the exercise price of any such outstanding stock options and the
year-end price of the Common Stock.

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6"><B>Number of Securities</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6"><B>Value of Unexercised</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6"><B>Underlying Unexercised</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6"><B>In-the-Money Options</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Shares</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000"><B>Options At Fiscal Year End(#)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000"><B>At Fiscal Year End($)(1)</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Acquired on</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Value</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Name</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Exercise(#)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Realized($)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Exercisable</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Unexercisable</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Exercisable</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Unexercisable</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Lonnie J. Stout II</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">360,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">899,800</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">R. Gregory Lewis</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">56,800</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">260,600</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">J. Michael Moore</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23,466</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,334</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">106,098</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,002</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Mark A. Parkey</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">28,666</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,334</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">129,498</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,002</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P>
<HR size="1" width="18%" align="left" noshade color="#000000">

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top">
    <TD width="1%" nowrap align="left">(1)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Reflects the value of outstanding options based on the closing price of the Company&#146;s Common Stock on December&nbsp;31, 2004.</TD>
</TR>

</TABLE>



<P align="left" style="font-size: 10pt"><B>Salary Continuation Agreements</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Since 1978, the Company has entered into salary continuation agreements with eligible
employees (the &#147;Salary Continuation Agreements&#148;) which will remain in effect for 2005. The Salary
Continuation Agreements generally provide for a retirement benefit of 50% of the employee&#146;s salary
on the date of entering into the agreement with adjustments based on certain subsequent salary
increases. The retirement benefit is payable over 15&nbsp;years commencing at age 65. The Salary
Continuation Agreements also provide that in the event an employee dies while in the employ of the
Company after entering into a Salary Continuation Agreement but before retirement, his or her
beneficiaries, for a period of one year, will receive 100% of such employee&#146;s salary at the
applicable time set forth in the Salary Continuation Agreement. Thereafter, for a period of 10
years, or until such time as the employee would have attained age 65, whichever period is longer,
the beneficiaries will receive 50% of such salary yearly. All officers and certain other key
employees of the Company with three full years of service are eligible to enter into a Salary
Continuation Agreement. Some of the Salary Continuation Agreement obligations are funded by the
Company by the cash value of life insurance policies purchased by the Company and payable to the
Company on the death of the employee. The remaining Salary Continuation Agreements are self-funded
by the Company. An amount which approximates the cash value of the life insurance policy, or in
the cases in which the Company currently self funds the retirement benefit the estimated cash value
of the policy which would have been required to


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<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="left" style="font-size: 10pt">fund the retirement benefit, for each employee vests for the benefit of such employee at the rate
of 10% per year for each year of service, including the first three years of service required for
eligibility to enter into a Salary Continuation Agreement, and is payable to such employee upon
termination of service with the Company for any reason other than death or retirement at age 65.
Directors of the Company who are not also executive officers or employees are not parties to a
Salary Continuation Agreement.



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The annual benefits payable upon retirement at age 65 for each of Messrs.&nbsp;Stout and Lewis are
currently $138,750 and $74,000 , respectively. Currently, Mr.&nbsp;Moore would receive $59,900
and Mr.&nbsp;Parkey would receive annual benefits of $63,000 payable upon retirement at age 65. These
amounts may be adjusted periodically pursuant to the terms of the Salary Continuation Agreements.


<P align="left" style="font-size: 10pt"><B>Termination Benefits</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to severance benefits agreements with the Company, in the event that Mr.&nbsp;Stout or Mr.
Lewis is terminated or resigns after a change in responsibilities, then he will receive an amount
equal to 18&nbsp;months&#146; compensation. Based on current levels of compensation, such amounts would be
$510,000 for Mr.&nbsp;Stout and $257,400 for Mr.&nbsp;Lewis.


<P align="left" style="font-size: 10pt"><B>Compensation of Directors</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 2004, the Board increased the monthly fees and attendance fees paid to non-employee
directors. Currently each director who is not an employee of the Company receives a monthly fee of
$1,250 plus a fee of $1,500 for each attended meeting of the Board or any Committee of which he or
she is a member.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each director who is not also an employee of the Company is eligible for grants of
non-qualified stock options under the 2004 Equity Incentive Plan (the &#147;Equity Incentive Plan&#148;).
Generally, directors who are not employees of the Company have been awarded options to purchase
10,000 shares of Common Stock upon joining the Board and options to purchase 1,000 shares of Common
Stock for each succeeding year of service, with the exercise price equal to the fair market value
of the Common Stock on the date of grant. Pursuant to the terms of the Equity Incentive Plan, no
non-employee director is eligible for a grant of incentive stock options under the Equity Incentive
Plan.


<P align="left" style="font-size: 10pt"><B>Compensation Committee Report</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Decisions on compensation of the Company&#146;s executive officers are made by the Compensation
Committee of the Company&#146;s Board of Directors. Each member of the Compensation Committee is a
non-employee director and is independent as that term is defined in the current rules of the AMEX.
It is the responsibility of the Compensation Committee to determine whether in its judgment the
Company&#146;s executive compensation policies are reasonable and appropriate, meet their stated
objectives and effectively serve the best interests of the Company and its shareholders.


<P align="left" style="font-size: 10pt"><I>Compensation Philosophy and Policies for Executive Officers</I>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Compensation Committee believes that the primary objectives of the Company&#146;s executive
compensation policies should be:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left">&#149;&nbsp;&nbsp;</TD>
    <TD>to attract and retain talented executives by providing compensation that is,
overall, competitive with the compensation provided to executives at companies of
comparable size and position in the</TD>
</TR>

</TABLE>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<P><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left">&nbsp;&nbsp;&nbsp;</TD>
    <TD>restaurant industry, while maintaining compensation within levels that are
consistent with the Company&#146;s overall financial objectives and operating
performance;</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left">&#149;&nbsp;&nbsp;</TD>
    <TD>to provide the appropriate incentives for executive officers to work towards the
achievement of the Company&#146;s annual sales, operating and development targets; and</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left">&#149;&nbsp;&nbsp;</TD>
    <TD>to determine if it is appropriate for the Company to provide long-term incentive
compensation to its executive officers in the form of stock options or other
stock-based awards in order to align the interests of its executive officers more
closely with those of its shareholders and the long-term interests of the Company.</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Compensation Committee believes that the Company&#146;s executive compensation policies should
be reviewed each year following the time when the financial results of the prior year become final.
The policies are reviewed in light of their consistency with the Company&#146;s financial performance,
the success achieved in meeting its sales and operating performance targets, achieving its overall
strategic business plan objectives and its position within the restaurant industry. The
compensation of individual executive officers is reviewed annually by the Compensation Committee in
light of the executive compensation policies established for that year.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Compensation Committee sets the base compensation of the executive officers at a level
that it believes appropriate considering the overall strategic direction of the Company, its
position within the relative segment of the food service industry in which it operates and the
overall responsibilities of each executive officer. The Compensation Committee believes that in
addition to corporate performance, it is appropriate to consider in setting and reviewing executive
compensation the personal contributions the particular individual may make to the success of the
corporate enterprise. Such qualitative factors as demonstrated leadership skills, planning
initiatives, development and morale building skills, and other such related factors have been
deemed to be important qualitative factors to take into account when considering levels of
compensation.


<P align="left" style="font-size: 10pt"><I>Compensation of Executive Officers</I>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Compensation Committee believes that the compensation for each of the Named Officers
should consist of a base salary, the potential for an annual bonus and long-term stock-based
incentive compensation and has applied the policies described herein to fiscal 2004 compensation
for executive officers as described below.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Base Compensation</I>. Base salaries for the Named Officers are at fixed levels generally between
the 25th and 75th percentiles of salaries paid to senior managers with comparable qualifications,
experience and responsibility at other corporations engaged in the same or similar businesses as
the Company. The Compensation Committee subjectively determined, on the basis of discussions with
the Chief Executive Officer and its experience in business generally and with the Company
specifically, what it viewed to be appropriate levels of base compensation after taking into
consideration each executive&#146;s contributions and the level of performance of the Company overall.
As a result of this review, increases averaging approximately 10% in the base salaries for the
Named Officers for fiscal 2004 were made, with specific increases varying from 5.1% to 14.0%,
reflecting the Compensation Committee&#146;s subjective judgment as to individual contributions towards
meeting the Company&#146;s overall financial objectives and financial performance. The Compensation
Committee did not assign any relative weight to the quantitative and qualitative factors which it
applied subjectively in reaching its base compensation decisions.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Annual Incentive Compensation</I>. The principal factors in awarding annual bonuses to the
Company&#146;s executive officers for fiscal 2004 were their ability to increase same store sales,
improve corporate operating profits


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<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="left" style="font-size: 10pt">or maintain them at the appropriate levels for the sales achieved, and meet the Company&#146;s overall
strategic business plan objectives. The Compensation Committee also may consider other factors when
awarding annual bonuses, such as the executive&#146;s contribution to concept development, improvement
in financial performance and the impact the executive officers have on programs that enhance
shareholder value.



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Compensation Committee generally believes that an annual bonus award in the range of 15%
to 50% of the executive officer&#146;s annual base compensation is appropriate in light of the
relatively low to moderate base salary levels. During fiscal 2004, bonuses of 18.75% of each
executive officer&#146;s annual base compensation were awarded to the executive officers, with specific
bonuses ranging from $23,625 to $60,938, reflecting the Compensation Committee&#146;s subjective
judgment as to individual contributions to the Company&#146;s 2004 performance.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Long-Term Incentive Compensation</I>. During the Company&#146;s fiscal year the Compensation Committee
considers the advisability of granting the Company&#146;s senior executives long-term incentive
compensation in the form of awards under the Company&#146;s stock incentive plan. The Compensation
Committee believes that its past grants of stock options have successfully focused the Company&#146;s
management team on building profitability and enhancing shareholder value.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company currently has no set policy as to when stock options should be awarded. The
Compensation Committee believes that the Company should make it a part of its regular executive
compensation policies to consider granting annual awards of stock options to executive officers to
provide long-term incentives as part of each executive&#146;s annual compensation package. The
Compensation Committee also believes that any grant should be made on terms established at the time
of the annual review, and that the exercise price of stock options should be the fair market value
of the Company&#146;s Common Stock on the date of grant. Generally, the Compensation Committee&#146;s policy
is that stock options should vest gradually over a period of three or more years.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Compensation Committee believes that long-term stock-based incentive compensation should
be structured so as to more closely align the interests of the executives with those of the
Company&#146;s shareholders. The Compensation Committee determines the award of stock option grants to
the executive officers and takes into account the recommendations of the Chief Executive Officer
prior to approving annual awards of long-term stock-based incentive compensation to the other
executive officers.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 2004, the Compensation Committee approved and recommended to the Board the adoption of the
Company&#146;s 2004 Equity Incentive Plan, whereby 370,000 shares of common stock were authorized for
issuance pursuant to grants of stock options or restricted stock, stock appreciation rights, and
other stock-based awards and up to 762,046 shares that were then subject to awards under the 1994
Plan, when and if such awards are forfeited or terminated without delivery of shares under the 1994
Plan, will become available for grant under the 2004 Equity Incentive Plan. The Plan was approved
by the Board, submitted to shareholders for approval and approved by the shareholders on May&nbsp;28,
2004.


<P align="left" style="font-size: 10pt"><I>Loan Program</I>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 1999, the Company&#146;s Board of Directors established a loan program designed to enable
eligible employees to purchase shares of the Company&#146;s common stock. Under the program eligible
participants were permitted to borrow an amount equal to the full price of common stock purchased.
The program authorized $1&nbsp;million in loans to employees. The employee loans are payable on
December&nbsp;31, 2006, unless repaid sooner pursuant to terms of the loan program. Pursuant to the
terms of the loan program, participants received one share of Common Stock and one share of
restricted stock under the Company&#146;s 1994 Employee Stock Incentive Plan for every 20 shares
purchased pursuant to the loan program. The restricted stock vests in 20% increments on the second
through sixth anniversaries of the date of issuance. The Compensation Committee believes that the
loan program,


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<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="left" style="font-size: 10pt">which facilitated employee purchases of Common Stock, more closely aligns employee interests with
shareholder interests.



<P align="left" style="font-size: 10pt"><I>Compensation of Chief Executive Officer</I>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Compensation Committee believes that the Chief Executive Officer&#146;s compensation is
consistent with its general policies concerning executive compensation and is appropriate in light
of the Company&#146;s financial objectives and performance. Awards of long-term incentive compensation
to the Chief Executive Officer are considered concurrently with awards to other executive officers
and follow the same general policies as such other long-term incentive awards. Of the options
previously granted to Mr.&nbsp;Stout for the purchase of 360,000 shares of Common Stock, options for
180,000 of those shares were originally granted at an exercise price equal to the market price on
the date of grant which exercise price increased 15% annually to amounts specified in an option
agreement. The Compensation Committee fixed the exercise price in May&nbsp;2004 as described below, at
the exercise price on the date of the amendment.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Compliance with Internal Revenue Code Section&nbsp;162(m</I>).


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;162(m) of the Internal Revenue Code of 1986, as amended (the &#147;Code&#148;), enacted in 1993,
generally prohibits public companies from deducting the Chief Executive Officer&#146;s and four other
most highly compensated executive officers&#146; compensation, to the extent such compensation exceeds
$1&nbsp;million for any individual officer. Performance-based compensation is not subject to the
deduction limit if certain requirements are met. Since the compensation of each of the Company&#146;s
executive officers is significantly less than $1&nbsp;million, the Company has not addressed the steps
that it would take to structure the performance-based portion of the compensation of its executive
officers in a manner that would comply with the statute.


<P align="left" style="font-size: 10pt; margin-left: 50%">Respectfully submitted,


<P align="left" style="font-size: 10pt; margin-left: 50%">Brenda B. Rector (Chair)<BR>
E. Townes Duncan<BR>
Garland G. Fritts


<P align="left" style="font-size: 10pt"><B>Report on Stock Option Amendments</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 2004, the Company reconsidered the accounting treatment for a stock option awarded to its
Chief Executive Officer in 1999. As a result, the option was accounted for as a variable award,
thereby requiring that the Company recognize non-cash compensation expense in its previously issued
fiscal 2003 financial statements.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company noted that the option has been disclosed in previous annual proxy statements.
Provisions of the option called for the exercise price, which was equal to the fair market value of
the Company&#146;s Common Stock on the date of the award, to increase by a stated amount on each
anniversary date of the award if the option had not yet been exercised. The Company believed at
the date of the grant, and had continued to believe after that time, that the option grant would be
accorded treatment as a fixed plan award (meaning that no compensation expense would be recognized
with respect to that award) because both the number of shares and exercise prices at which the
option could be exercised throughout its life were known. Furthermore, the escalating exercise
price of this award was less favorable to the Chief Executive Officer than options typically
granted to other members of management which require no compensation expense to be recognized.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company decided to review the accounting for the option after the issue was raised by the
Company&#146;s new independent registered public accounting firm, KPMG LLP, in connection with its
review of the Company&#146;s


<P align="center" style="font-size: 10pt">15
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<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="left" style="font-size: 10pt">2004 first quarter financial statements. Following the 2004 first quarter review, both KPMG LLP
and the Company&#146;s former independent registered public accounting firm indicated that the option
should be accounted for as a variable award. The Company considered various courses of action with
respect to the option grant and on May&nbsp;25, 2004, the Compensation Committee amended the option to
fix the exercise price at $3.94, the then current exercise price of the option.



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As a result, the grant was accounted for as a fixed plan award after that date, and no
additional compensation expense will be recognized with respect to this option grant.

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="1%">&nbsp;</TD>
    <TD width="44%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD><!-- VRule -->
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD><!-- VRule -->
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD><!-- VRule -->
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD><!-- VRule -->
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD><!-- VRule -->
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD><!-- VRule -->
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>

    <TD width="1%">&nbsp;</TD>
</TR><TR style="font-size: 1px" valign="bottom">
    <TD nowrap align="left" colspan="29" style="border-bottom: 3px solid #000000">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">    <TD width="1%" style="border-left: 3px solid #000000">&nbsp;</TD>

    <TD nowrap align="center" colspan="27" style="border-bottom: 1px solid #000000"><B>10-Year Option/SAR Repricings</B></TD>
    <TD width="1%" style="border-right: 3px solid #000000">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">    <TD width="1%" style="border-left: 3px solid #000000">&nbsp;</TD>

    <TD>&nbsp;</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Number of</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Market Price of</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Length of Original</B></TD>
    <TD width="1%" style="border-right: 3px solid #000000">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">    <TD width="1%" style="border-left: 3px solid #000000">&nbsp;</TD>

    <TD>&nbsp;</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Securities</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Common Stock at</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Exercise Price at</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Option Term</B></TD>
    <TD width="1%" style="border-right: 3px solid #000000">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">    <TD width="1%" style="border-left: 3px solid #000000">&nbsp;</TD>

    <TD>&nbsp;</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Underlying Options</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Time of Amendment</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Time of Amendment</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>New Exercise Price</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Remaining</B></TD>
    <TD width="1%" style="border-right: 3px solid #000000">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">    <TD width="1%" style="border-left: 3px solid #000000">&nbsp;</TD>

    <TD nowrap align="left"><B>Name</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Date</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Amended</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>($)</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>($)</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>($)</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>at Date of Amendment</B></TD>
    <TD width="1%" style="border-right: 3px solid #000000">&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD width="1%" style="border-left: 3px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
                        <TD valign="top" style="border-top: 2px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">Lonnie J. Stout II,
Chairman, President
and Chief Executive
Officer
</DIV></TD>
    <TD style="border-right: 2px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 2px solid #000000">5/25/04
</TD>
    <TD style="border-right: 2px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD nowrap align="right" valign="top" style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD align="right" valign="top" style="border-top: 2px solid #000000">180,000</TD>
    <TD nowrap valign="top" style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-right: 2px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD nowrap align="right" valign="top" style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD align="right" valign="top" style="border-top: 2px solid #000000">7.10</TD>
    <TD nowrap valign="top" style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-right: 2px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD nowrap align="right" valign="top" style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD align="right" valign="top" style="border-top: 2px solid #000000">3.94</TD>
    <TD nowrap valign="top" style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-right: 2px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD nowrap align="right" valign="top" style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD align="right" valign="top" style="border-top: 2px solid #000000">3.94</TD>
    <TD nowrap valign="top" style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-right: 2px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 2px solid #000000">5&nbsp;years, 6&nbsp;months</TD>
    <TD width="1%" style="border-right: 3px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
</TR>
<TR style="font-size: 1px" valign="bottom">
    <TD nowrap align="left" colspan="29" style="border-top: 3px solid #000000">&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The only other adjustment to option exercise prices in the past ten years occurred in 1998,
when the Board of Directors approved an exchange of some option grants to employees under the
Company&#146;s 1994 Employee Stock Incentive Plan and 1985 Stock Option Plan. All employees other than
Lonnie J. Stout II, President and Chief Executive Officer (who asked not to be considered for the
exchange offer) were eligible to surrender their outstanding grants in exchange for new grants with
a new 3-year vesting period, new exercise prices and, for management employees, reduced number of
shares issuable upon exercise. No directors were eligible to participate. The new options were
granted at an exercise price of $2.75 per share, the closing sale price of the Common Stock on
September&nbsp;30, 1998 as reported on the New York Stock Exchange. For management employees, including
the executive officers listed below, the number of shares of Common Stock that may be purchased
when the new options are exercised is 80% of the number of shares issuable under the surrendered
options. The new options vested in one-third increments on the first, second and third
anniversaries of the date of grant.


<P align="center" style="font-size: 10pt">16
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth certain information concerning the exchange.

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="1%">&nbsp;</TD>
    <TD width="62%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD><!-- VRule -->
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD><!-- VRule -->
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD><!-- VRule -->
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD><!-- VRule -->
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>

    <TD width="1%">&nbsp;</TD>
</TR><TR style="font-size: 1px" valign="bottom">
    <TD nowrap align="left" colspan="21" style="border-bottom: 3px solid #000000">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">    <TD width="1%" style="border-left: 3px solid #000000">&nbsp;</TD>

    <TD nowrap align="center" colspan="19" style="border-bottom: 1px solid #000000"><B>Ten Year Option Exchange</B></TD>
    <TD width="1%" style="border-right: 3px solid #000000">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">    <TD width="1%" style="border-left: 3px solid #000000">&nbsp;</TD>

    <TD>&nbsp;</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Number of</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Market Price of</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Number of</B></TD>
    <TD width="1%" style="border-right: 3px solid #000000">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">    <TD width="1%" style="border-left: 3px solid #000000">&nbsp;</TD>

    <TD>&nbsp;</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Securities</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Stock at Time of</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Securities</B></TD>
    <TD width="1%" style="border-right: 3px solid #000000">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">    <TD width="1%" style="border-left: 3px solid #000000">&nbsp;</TD>

    <TD>&nbsp;</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Underlying New</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Exchange</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Underlying Old</B></TD>
    <TD width="1%" style="border-right: 3px solid #000000">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">    <TD width="1%" style="border-left: 3px solid #000000">&nbsp;</TD>

    <TD>&nbsp;</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Options Issued</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>(New Exercise Price)</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Options Exchanged</B></TD>
    <TD width="1%" style="border-right: 3px solid #000000">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">    <TD width="1%" style="border-left: 3px solid #000000">&nbsp;</TD>

    <TD nowrap align="left"><B>Name</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Date</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>(#)(1)</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>($)</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>(#)</B></TD>
    <TD width="1%" style="border-right: 3px solid #000000">&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD width="1%" style="border-left: 3px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
                    <TD valign="top" style="border-top: 2px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">R Gregory Lewis,
Vice President,
Chief Financial
Officer and
Secretary
</DIV></TD>
    <TD style="border-right: 2px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 2px solid #000000">9/30/98
</TD>
    <TD style="border-right: 2px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD nowrap align="right" valign="top" style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD align="right" valign="top" style="border-top: 2px solid #000000">36,800</TD>
    <TD nowrap valign="top" style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-right: 2px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD nowrap align="right" valign="top" style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD align="right" valign="top" style="border-top: 2px solid #000000">2.75</TD>
    <TD nowrap valign="top" style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-right: 2px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD nowrap align="right" valign="top" style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD align="right" valign="top" style="border-top: 2px solid #000000">46,000</TD>
    <TD nowrap valign="top" style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD width="1%" style="border-right: 3px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD width="1%" style="border-left: 3px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
    <TD valign="top" style="border-top: 2px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">J. Michael Moore,
Vice President,
Human Resources and
Administration
</DIV></TD>
    <TD style="border-right: 2px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 2px solid #000000">9/30/98
</TD>
    <TD style="border-right: 2px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD nowrap align="right" valign="top" style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD align="right" valign="top" style="border-top: 2px solid #000000">10,800</TD>
    <TD nowrap valign="top" style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-right: 2px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD nowrap align="right" valign="top" style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD align="right" valign="top" style="border-top: 2px solid #000000">2.75</TD>
    <TD nowrap valign="top" style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-right: 2px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD nowrap align="right" valign="top" style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD align="right" valign="top" style="border-top: 2px solid #000000">13,500</TD>
    <TD nowrap valign="top" style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD width="1%" style="border-right: 3px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD width="1%" style="border-left: 3px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
    <TD valign="top" style="border-top: 2px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">Mark A. Parkey,
Vice President and
Controller
</DIV></TD>
    <TD style="border-right: 2px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 2px solid #000000">9/30/98
</TD>
    <TD style="border-right: 2px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD nowrap align="right" valign="top" style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD align="right" valign="top" style="border-top: 2px solid #000000">16,000</TD>
    <TD nowrap valign="top" style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-right: 2px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD nowrap align="right" valign="top" style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD align="right" valign="top" style="border-top: 2px solid #000000">2.75</TD>
    <TD nowrap valign="top" style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-right: 2px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD nowrap align="right" valign="top" style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD align="right" valign="top" style="border-top: 2px solid #000000">20,000</TD>
    <TD nowrap valign="top" style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD width="1%" style="border-right: 3px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
</TR>
<TR style="font-size: 1px" valign="bottom">
    <TD nowrap align="left" colspan="21" style="border-top: 3px solid #000000">&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>


<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top">
    <TD width="1%" nowrap align="left">(1)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Represents 80% of the number of shares of Common Stock issuable upon exercise of surrendered
options.</TD>
</TR>

</TABLE>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board believed that permitting the exchange for new options with an exercise price at the
then current market price of the Common Stock was in the best interests of the Company and its
shareholders. In the view of the Board, the decline in the market price of the Common Stock
substantially impaired the effectiveness of the surrendered options as incentives to employees&#146;
performance. It was also determined by the Board that exchanging old options for the new options
would renew the incentive for employees of the Company to acquire an equity interest in the
Company, which the Board believed better aligns the long-term interests of management with those of
the shareholders. Further, the Board believed that the commencement of the new vesting period
would provide further incentive to employees to remain with the Company.


<P align="left" style="font-size: 10pt; margin-left: 50%">Respectfully submitted,


<P align="left" style="font-size: 10pt; margin-left: 50%">Brenda B. Rector (Chair)<BR>
E. Townes Duncan<BR>
Garland G. Fritts


<P align="center" style="font-size: 10pt">17
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="font-size: 10pt"><B>Performance Graph</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following graph compares the five-year cumulative returns of $100 invested on January&nbsp;2,
2000 in (a)&nbsp;the Company, (b)&nbsp;the CoreData Restaurant Group Industry Index (&#147;CoreData Group Index&#148;),
(c)&nbsp;the Standard &#038; Poor&#146;s 500 Index (&#147;S&#038;P 500 Index&#148;), and (d)&nbsp;the American Stock Exchange Market
Index (&#147;AMEX Market Index&#148;) assuming the reinvestment of all dividends:


<P align="center" style="font-size: 10pt"><B>COMPARE 5-YEAR CUMULATIVE
TOTAL RETURN<BR>
AMONG J. ALEXANDER&#146;S CORPORATION, COREDATA GROUP<BR>
INDEX, AMEX MARKET INDEX AND S&#38;P 500 INDEX</B>

<p align="center"><IMG src="g93860g9386060.gif">





<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
<TD width="46%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD><!-- VRule -->
<TD width="1%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD><!-- VRule -->
<TD width="1%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD><!-- VRule -->
<TD width="1%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD><!-- VRule -->
<TD width="1%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD><!-- VRule -->
<TD width="1%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD><!-- VRule -->
<TD width="1%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 1px" valign="bottom">
<TD nowrap align="left" colspan="31" style="border-bottom: 1px solid #000000">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
<TD>&nbsp;</TD>
<TD style="border-right: 1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD nowrap align="center" colspan="2"><B>1/02/00</B></TD>
<TD>&nbsp;</TD>
<TD style="border-right: 1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD nowrap align="center" colspan="2"><B>12/31/00</B></TD>
<TD>&nbsp;</TD>
<TD style="border-right: 1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD nowrap align="center" colspan="2"><B>12/30/01</B></TD>
<TD>&nbsp;</TD>
<TD style="border-right: 1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD nowrap align="center" colspan="2"><B>12/29/02</B></TD>
<TD>&nbsp;</TD>
<TD style="border-right: 1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD nowrap align="center" colspan="2"><B>12/28/03</B></TD>
<TD>&nbsp;</TD>
<TD style="border-right: 1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD nowrap align="center" colspan="2"><B>1/02/05</B></TD>
<TD>&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
<TD colspan="1" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
<TD align="left" style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
<TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
<TD colspan="3" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
<TD align="left" style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
<TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
<TD colspan="3" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
<TD align="left" style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
<TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
<TD colspan="3" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
<TD align="left" style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
<TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
<TD colspan="3" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
<TD align="left" style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
<TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
<TD colspan="3" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
<TD align="left" style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
<TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
<TD colspan="3" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;J.
ALEXANDER&#146;S CORP.</DIV></TD>
<TD style="border-right: 1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD>&nbsp;</TD>
<TD align="right">100.00</TD>
<TD>&nbsp;</TD>
<TD style="border-right: 1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD>&nbsp;</TD>
<TD align="right">74.02</TD>
<TD>&nbsp;</TD>
<TD style="border-right: 1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD>&nbsp;</TD>
<TD align="right">70.40</TD>
<TD>&nbsp;</TD>
<TD style="border-right: 1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD>&nbsp;</TD>
<TD align="right">86.40</TD>
<TD>&nbsp;</TD>
<TD style="border-right: 1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD>&nbsp;</TD>
<TD align="right">224.00</TD>
<TD>&nbsp;</TD>
<TD style="border-right: 1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD>&nbsp;</TD>
<TD align="right">236.80</TD>
<TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
<TD colspan="1" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
<TD align="left" style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
<TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
<TD colspan="3" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
<TD align="left" style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
<TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
<TD colspan="3" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
<TD align="left" style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
<TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
<TD colspan="3" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
<TD align="left" style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
<TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
<TD colspan="3" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
<TD align="left" style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
<TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
<TD colspan="3" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
<TD align="left" style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
<TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
<TD colspan="3" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;COREDATA
GROUP INDEX</DIV></TD>
<TD style="border-right: 1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD>&nbsp;</TD>
<TD align="right">100.00</TD>
<TD>&nbsp;</TD>
<TD style="border-right: 1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD>&nbsp;</TD>
<TD align="right">95.04</TD>
<TD>&nbsp;</TD>
<TD style="border-right: 1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD>&nbsp;</TD>
<TD align="right">96.38</TD>
<TD>&nbsp;</TD>
<TD style="border-right: 1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD>&nbsp;</TD>
<TD align="right">76.94</TD>
<TD>&nbsp;</TD>
<TD style="border-right: 1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD>&nbsp;</TD>
<TD align="right">105.93</TD>
<TD>&nbsp;</TD>
<TD style="border-right: 1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD>&nbsp;</TD>
<TD align="right">129.37</TD>
<TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
<TD colspan="1" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
<TD align="left" style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
<TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
<TD colspan="3" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
<TD align="left" style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
<TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
<TD colspan="3" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
<TD align="left" style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
<TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
<TD colspan="3" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
<TD align="left" style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
<TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
<TD colspan="3" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
<TD align="left" style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
<TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
<TD colspan="3" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
<TD align="left" style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
<TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
<TD colspan="3" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;AMEX
MARKET INDEX</DIV></TD>
<TD style="border-right: 1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD>&nbsp;</TD>
<TD align="right">100.00</TD>
<TD>&nbsp;</TD>
<TD style="border-right: 1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD>&nbsp;</TD>
<TD align="right">98.77</TD>
<TD>&nbsp;</TD>
<TD style="border-right: 1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD>&nbsp;</TD>
<TD align="right">94.22</TD>
<TD>&nbsp;</TD>
<TD style="border-right: 1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD>&nbsp;</TD>
<TD align="right">90.46</TD>
<TD>&nbsp;</TD>
<TD style="border-right: 1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD>&nbsp;</TD>
<TD align="right">123.12</TD>
<TD>&nbsp;</TD>
<TD style="border-right: 1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD>&nbsp;</TD>
<TD align="right">140.99</TD>
<TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
<TD colspan="1" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
<TD align="left" style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
<TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
<TD colspan="3" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
<TD align="left" style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
<TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
<TD colspan="3" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
<TD align="left" style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
<TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
<TD colspan="3" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
<TD align="left" style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
<TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
<TD colspan="3" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
<TD align="left" style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
<TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
<TD colspan="3" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
<TD align="left" style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
<TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
<TD colspan="3" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;S&#38;P 500 INDEX</DIV></TD>
<TD style="border-right: 1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD>&nbsp;</TD>
<TD align="right">100.00</TD>
<TD>&nbsp;</TD>
<TD style="border-right: 1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD>&nbsp;</TD>
<TD align="right">90.89</TD>
<TD>&nbsp;</TD>
<TD style="border-right: 1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD>&nbsp;</TD>
<TD align="right">80.09</TD>
<TD>&nbsp;</TD>
<TD style="border-right: 1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD>&nbsp;</TD>
<TD align="right">62.39</TD>
<TD>&nbsp;</TD>
<TD style="border-right: 1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD>&nbsp;</TD>
<TD align="right">80.29</TD>
<TD>&nbsp;</TD>
<TD style="border-right: 1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD>&nbsp;</TD>
<TD align="right">89.02</TD>
<TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
<TD colspan="1" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
<TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
<TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
<TD colspan="3" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
<TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
<TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
<TD colspan="3" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
<TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
<TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
<TD colspan="3" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
<TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
<TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
<TD colspan="3" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
<TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
<TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
<TD colspan="3" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
<TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
<TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
<TD colspan="3" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>










<P align="center" style="font-size: 10pt">18
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<!-- link1 "AUDIT COMMITTEE REPORT" -->
<DIV align="left"><A NAME="005"></A></DIV>

<P align="center" style="font-size: 10pt"><B>AUDIT COMMITTEE REPORT</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Audit Committee of the Board of Directors is comprised of three non-employee directors and
operates under a written charter. The Restated Audit Committee Charter is posted on the Company&#146;s
website at www.jalexanders.com and is also included as Appendix&nbsp;A hereto. The Audit Committee is
comprised of Joseph N. Steakley (Chairman), Brenda B. Rector and Garland G. Fritts, each of whom is
independent under the rules of the American Stock Exchange and applicable Securities and Exchange
Commission regulations. The Board of Directors has determined that each of Joseph N. Steakley and
Brenda B. Rector is an &#147;audit committee financial expert&#148; as defined by the Securities and Exchange
Commission, and that each of them is &#147;independent&#148; as that term is used in item 7(d)(3)(iv) of
Schedule&nbsp;14A of the Securities Exchange Act. During 2004, the Audit Committee met nine times.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The primary purpose of the Audit Committee is to assist the Board of Directors in fulfilling
its responsibility to oversee (i)&nbsp;the integrity of the financial statements of the Company, (ii)
the Company&#146;s compliance with legal and regulatory requirements, (iii)&nbsp;the independent registered
public accounting firm&#146;s qualifications and independence, and (iv)&nbsp;the performance of the Company&#146;s
independent registered public accounting firm. The Audit Committee is directly responsible for the
appointment, compensation and oversight of the work of the independent registered public accounting
firm. The independent registered public accounting firm reports directly to the Audit Committee.
Management has the primary responsibility for the financial statements and the reporting process,
including internal control over financial reporting. The Company&#146;s independent registered public
accounting firm is responsible for planning and carrying out proper annual audits and quarterly
reviews of the Company&#146;s financial statements in accordance with standards established by the
Public Company Accounting Oversight Board (United States) and expressing an opinion on the
conformity of the Company&#146;s audited financial statements with U.S. generally accepted accounting
principles.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the performance of its oversight function, the Audit Committee has reviewed and discussed
the audited financial statements with management and the independent registered public accounting
firm. The Audit Committee has discussed with the independent registered public accounting firm the
matters required to be discussed by Statement on Auditing Standards No.&nbsp;61 (Communication with
Audit Committees), as amended by Statement on Auditing Standards No.&nbsp;90 (Audit Committee
Communications). In addition, the Audit Committee has received from the independent registered
public accounting firm the written disclosures required by Independence Standards Board No.&nbsp;1
(Independence Discussions with Audit Committees) and discussed with them its independence from the
Company and its management. The Audit Committee has considered whether the independent registered
public accounting firm&#146;s provision of non-audit services to the Company is compatible with the
independent registered public accounting firm&#146;s independence.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Audit Committee discussed with the Company&#146;s independent registered public accounting firm
the overall scope and plans for its audit. The Audit Committee meets with the independent
registered public accounting firm, with and without management present, to discuss the results of
its audits, the evaluations of the Company&#146;s internal control and the overall quality of financial reporting.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In reliance on the reviews and discussions referred to above, the Audit Committee recommended
to the Board of Directors that the audited financial statements be included in the Company&#146;s Annual
Report on Form 10-K for the year ended January&nbsp;2, 2005, for filing with the Securities and Exchange
Commission.


<P align="left" style="font-size: 10pt; margin-left: 50%">Respectfully submitted,<BR>
Joseph N. Steakley (Chair)<BR>
Garland G. Fritts<BR>
Brenda B. Rector


<P align="center" style="font-size: 10pt">19
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="left" style="font-size: 10pt">The foregoing report of the Audit Committee shall not be deemed incorporated by reference by any
general statement incorporating by reference the Proxy Statement into any filing under the
Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that the
Company specifically incorporates this information by reference, and shall not otherwise be deemed
filed under such acts.


<!-- link1 "CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS" -->
<DIV align="left"><A NAME="006"></A></DIV>

<P align="center" style="font-size: 10pt"><B>CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E.&nbsp;Townes Duncan, a director of the Company, is a minority owner of and manages the
investments of Solidus Company, the Company&#146;s largest shareholder. Pursuant to a Stock Purchase and
Standstill Agreement between Solidus, LLC (the predecessor to Solidus) and the Company dated March
22, 1999, Solidus purchased 1,086,266 shares of Common Stock for $3.75 per share, for an aggregate
purchase price of $4,073,497.50. In addition, Solidus agreed that (i)&nbsp;for a period of seven years,
Solidus and its affiliates would not acquire or hold more than 33% of the Company&#146;s Common Stock;
(ii)&nbsp;for a period of seven years, Solidus and its affiliates would not solicit proxies for a vote
of the shareholders of the Company; (iii)&nbsp;for a period of seven years, Solidus and its affiliates
would not sell the Company&#146;s Common Stock, except to the Company, a person, entity or group
approved by the Company or to an affiliate of Solidus; (iv)&nbsp;the above restrictions on Solidus&#146;
ownership and ability to solicit proxies would terminate in the event of certain tender offers or
exchange offers, a notice filing with the Department of Justice relating to the acquisition by a
third party of more than 15% of the outstanding Common Stock or with the Commission relating to the
acquisition by a third party of more than 10% of the outstanding Common Stock, the Company&#146;s
proposing or approving a merger or other business combination, or a change to a majority of the
Company&#146;s Board of Directors over a two-year period; and (v)&nbsp;Solidus would not exercise rights
attributable to the 1,086,266 shares of Common Stock purchased on March&nbsp;22, 1999, during the
Company&#146;s rights offering in 1999.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In August&nbsp;2003, Solidus and the Company executed the First Amendment to Stock Purchase and
Standstill Agreement (&#147;First Amendment&#148;). Under the terms of the First Amendment, the Company
authorized Solidus to pledge the Common Stock of the Company owned by it as collateral security for
the payment and performance of Solidus&#146; obligations under a credit agreement with a bank. In the
event that Solidus defaults on its obligations to the bank, and such default results in the need to
liquidate the related collateral, the bank is required to give the Company written notice of the
number of shares it intends to sell and the price at which such shares are to be sold. The Company
has the exclusive right within the first 30&nbsp;days subsequent to receipt of such written notice to
purchase all or any portion of the shares subject to sale and, should the Company decline to
purchase any of the applicable shares, the bank may sell such shares over the ensuing 50&nbsp;days on
terms no more favorable than the terms stated in the written notice referred to above.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 1999, the Company&#146;s Board of Directors established a loan program designed to enable
eligible employees to purchase shares of the Company&#146;s Common Stock. Under the terms of the loan
program, all full-time employees as well as part-time employees who had at least five years of
employment with the Company were eligible to borrow amounts ranging from a minimum of $10,000 to a
maximum of 100% of their annual salary. Borrowings in excess of the maximum were allowed upon
approval by the Compensation Committee or the officers of the Company, as applicable. The
aggregate amount of loans authorized was $1&nbsp;million.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the terms of the loan program, participants received one share of bonus Common
Stock and one share of restricted stock issued pursuant to the Company&#146;s 1994 Employee Stock
Incentive Plan for every 20 shares purchased pursuant to the loan program. The shares of
restricted stock vest at a rate of 20% on each of the second through the sixth anniversaries of
February&nbsp;18, 2000.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following officers borrowed amounts under the 1999 loan program in excess of $60,000. Mr.
Stout borrowed $424,005 to purchase 128,971 shares of Common Stock. He received 6,449 shares of
bonus stock and


<P align="center" style="font-size: 10pt">20
</DIV>

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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="left" style="font-size: 10pt">6,449 shares of restricted stock. Mr.&nbsp;Moore borrowed $76,397 to purchase 23,238 shares. He
received 1,162 shares of bonus stock and 1,162 shares of restricted stock. In addition, Mr.&nbsp;Moore
received an additional loan in the amount of $1,283. The market price of the Common Stock was
$3.625 per share at the time of the award of the shares of the bonus stock and the shares of
restricted stock. Currently, Mr.&nbsp;Stout and Mr.&nbsp;Moore owe $373,849 and $57,111, respectively, to
the Company.



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All loans made under the loan program bear interest at an annual rate of 3%, payable
quarterly, and are due and payable on December&nbsp;31, 2006, at which time the remaining unpaid
principal amount and unpaid interest will become due and payable. In the event a participant
receives from the Company bonus compensation, 30% of any such bonus is to be applied to the
outstanding principal balance of the loan. Further, a participant&#146;s loan may become due and
payable upon termination of a participant&#146;s employment or failure to make any payment when due, as
well as under other circumstances set forth in the loan program documents. The interest rate and
payment terms are adjusted to terms comparable to market rates and terms in the event a participant
sells or pledges the shares purchased pursuant to the loan program (including shares of bonus stock
and restricted stock awarded in connection with the program) without the Company&#146;s prior consent.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Mr.&nbsp;Reed is a member of the law firm of Bass, Berry &#038; Sims PLC. This law firm has served as
the Company&#146;s outside legal counsel since the Company&#146;s inception in 1971.

<!-- link1 "SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS" -->
<DIV align="left"><A NAME="007"></A></DIV>

<P align="center" style="font-size: 10pt"><B>SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table summarizes information concerning the Company&#146;s equity compensation plans
at January&nbsp;2, 2005:

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="70%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Number of Shares</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Remaining Available</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">for Future Issuance</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Number of Shares to</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Under Equity</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">be Issued upon</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Weighted Average</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Compensation Plans</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Exercise of</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Exercise Price of</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">(Excluding Shares</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Outstanding Options</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Outstanding Options</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Reflected in First</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Plan Category</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">and Warrants</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">and Warrants</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Column)</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Equity compensation
plans approved by
shareholders</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">725,527</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">4.31</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">402,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Equity compensation
plans not approved
by shareholders</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">N/A</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">N/A</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">N/A</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">725,527</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">4.31</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">402,000</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<!-- link1 "COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION" -->
<DIV align="left"><A NAME="008"></A></DIV>

<P align="center" style="font-size: 10pt"><B>COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During fiscal 2004 until May&nbsp;28, 2004, the Compensation Committee of the Board of Directors
was composed of E. Townes Duncan and Garland G. Fritts, and after such date is composed of Brenda
B. Rector, Chair, E. Townes Duncan and Garland G. Fritts. None of these persons has at any time
been an officer or employee of the Company or any of its subsidiaries. In addition, there are no
relationships among the Company&#146;s executive officers, members of the Compensation Committee or
entities whose executives serve on the Board of Directors that require disclosure under applicable
Commission regulations.


<P align="center" style="font-size: 10pt">21
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<!-- link1 "SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE" -->
<DIV align="left"><A NAME="009"></A></DIV>

<P align="center" style="font-size: 10pt"><B>SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;16(a) of the Exchange Act requires the Company&#146;s executive officers and directors, and
persons who own more than 10% of a registered class of the Company&#146;s equity securities, to file
reports of ownership and changes in ownership with the Commission and AMEX. Executive officers,
directors and greater than 10% shareholders are required by regulation of the Commission to furnish
the Company with copies of all Section 16(a) forms they file.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Based solely on a review of the Forms 3, 4 and 5 and amendments thereto and certain written
representations furnished to the Company, the Company believes that during the fiscal year ended
January&nbsp;2, 2005, its executive officers and directors complied with all applicable filing
requirements.

<!-- link1 "RELATIONSHIP WITH INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM" -->
<DIV align="left"><A NAME="010"></A></DIV>

<P align="center" style="font-size: 10pt"><B>RELATIONSHIP WITH INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;KPMG LLP (&#147;KPMG&#148;) has been appointed to serve as the Company&#146;s independent registered public
accounting firm for the year ending January&nbsp;1, 2006. As reported on a Current Report on Form 8-K
filed with the Commission, on April&nbsp;20, 2004, KPMG was appointed to serve as the Company&#146;s
independent registered public accounting firm for the year ended January&nbsp;2, 2005 and Ernst &#038; Young
LLP (&#147;Ernst &#038; Young&#148;) was dismissed as the Company&#146;s independent registered public accounting firm.
The decision to change independent registered public accounting firm was made by the Audit
Committee. The Audit Committee expressed its satisfaction with the services of Ernst &#038; Young, which
had served as the Company&#146;s independent registered public accounting firm since the Company&#146;s
inception.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Ernst &#038; Young&#146;s reports on the Company&#146;s consolidated financial statements for the fiscal
years ended December&nbsp;28, 2003 and December&nbsp;29, 2002 did not contain an adverse opinion or
disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope or
accounting principles.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During the fiscal years ended December&nbsp;28, 2003 and December&nbsp;29, 2002 and through the date of
Ernst &#038; Young&#146;s dismissal, there were no disagreements with Ernst &#038; Young on any matter of
accounting principles or practices, financial statement disclosure or auditing scope or procedure
which, if not resolved to Ernst &#038; Young&#146;s satisfaction, would have caused them to make reference to
the subject matter in connection with their report on the Company&#146;s consolidated financial
statements for such years; and there were no reportable events as listed in Item&nbsp;304(a)(1)(v) of
Regulation&nbsp;S-K.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During the years ended December&nbsp;28, 2003 and December&nbsp;29, 2002 and through the date of Ernst &#038;
Young&#146;s dismissal, the Company did not consult KPMG regarding any of the matters or events set
forth in Items 304(a)(2)(i) and (ii)&nbsp;of Regulation&nbsp;S-K.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company has been informed that representatives of KPMG plan to attend the Annual Meeting.
Such representatives will have the opportunity to make a statement if they desire to do so and will
be available to respond to shareholders&#146; questions.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Audit Fees</I>. The aggregate fees billed to the Company by KPMG during 2004 for professional
services rendered for the audit of the Company&#146;s annual financial statements, for the reviews of
the financial statements included in the quarterly reports on Form 10-Q and services that are
normally provided by the independent registered public accounting firm in connection with statutory
and regulatory filings totaled $202,500. The aggregate fees billed to the Company by Ernst &#038; Young
during 2003 for professional services rendered for the audit


<P align="center" style="font-size: 10pt">22
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="left" style="font-size: 10pt">of the Company&#146;s annual financial statements, for the reviews of the financial statements included
in the quarterly reports on Form 10-Q and services that are normally provided by the independent
registered public accounting firm in connection with statutory and regulatory filings totaled
$135,000. In addition, Ernst and Young billed the Company $20,000 in 2004 related to professional
services rendered in connection with the reissuance of their report in May&nbsp;2004 on the Company&#146;s
previously issued 2003 annual financial statements and the Company&#146;s change in registered public
accounting firm.



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Audit-Related Fees. </I>The aggregate fees billed to the Company by KPMG for professional
services related to employee benefit plans totaled $18,000 in 2004. The aggregate fees billed to
the Company by Ernst &#038; Young for accounting consultation services, services related to employee
benefit plans and the issuance of letters related to liquor permits totaled $29,900 in 2003.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Tax Fees</I>. No tax-related services were provided to the Company by KPMG in 2004. The aggregate
fees billed to the Company by Ernst &#038; Young for professional services rendered for tax return
preparation and tax planning were $71,985 in 2003.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>All Other Fees</I>. No other services were provided to the Company by KPMG in 2004. The aggregate
fees billed by Ernst &#038; Young for products or services other than those described above totaled
$1,500 in 2003.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All audit related services, tax services and other services for 2003 and 2004 were
pre-approved by the Audit Committee, except for de minimis fees approved by our Audit Committee
chair and disclosed to and ratified by the Audit Committee pursuant to the Committee&#146;s pre-approval
policy for non-audit services. The Audit Committee concluded that the provision of such services
by Ernst &#038; Young and KPMG was compatible with the maintenance of each of such firm&#146;s independence
in the conduct of its auditing function.

<!-- link1 "DEADLINE FOR SUBMISSION OF SHAREHOLDER PROPOSALS TO BE<BR> PRESENTED AT THE 2006 ANNUAL MEETING OF SHAREHOLDERS" -->
<DIV align="left"><A NAME="011"></A></DIV>

<P align="center" style="font-size: 10pt"><B>DEADLINE FOR SUBMISSION OF SHAREHOLDER PROPOSALS TO BE<BR>
PRESENTED AT THE 2006 ANNUAL MEETING OF SHAREHOLDERS</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any proposal intended to be presented for action at the 2006 Annual Meeting of Shareholders by
any shareholder of the Company must be received by the Secretary of the Company not later than
December&nbsp;31, 2005, in order for such proposal to be considered for inclusion in the Company&#146;s Proxy
Statement and proxy relating to its 2006 Annual Meeting of Shareholders. Nothing in this paragraph
shall be deemed to require the Company to include any shareholder proposal that does not meet all
the Commission&#146;s requirements for inclusion in effect at the time.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For other shareholder proposals to be timely (but not considered for inclusion in the
Company&#146;s Proxy Statement), a shareholder&#146;s notice must be received by the Secretary of the Company
not less than 75&nbsp;days nor more than 90&nbsp;days prior to April&nbsp;29, 2006. For proposals that are not
timely filed, the Company retains discretion to vote proxies it receives. For proposals that are
timely filed, the Company retains discretion to vote proxies it receives provided (1)&nbsp;it includes
in the Proxy Statement advice on the nature of the proposal and how the Company intends to exercise
its voting discretion and (2)&nbsp;the proponent does not issue a proxy statement.

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<DIV align="left"><A NAME="012"></A></DIV>

<P align="center" style="font-size: 10pt"><B>METHOD OF COUNTING VOTES</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unless a contrary choice is indicated, all duly executed proxies will be voted in accordance
with the instructions set forth on the proxy card. A broker non-vote occurs when a broker holding
shares registered in street name is permitted to vote, in the broker&#146;s discretion, on routine
matters without receiving instructions from the client, but is not permitted to vote without
instructions on non-routine matters, and the broker returns a proxy card with no vote (the
&#147;non-vote&#148;) on the non-routine matter. Under the rules and regulations of the primary trading
markets applicable to most brokers, the election of directors is a routine matter on which a broker
has the discretion


<P align="center" style="font-size: 10pt">23
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="left" style="font-size: 10pt">to vote if instructions are not received from the client in a timely manner. Abstentions and
broker non-votes will be counted as present for purposes of determining the existence of a quorum.
Directors will be elected by a plurality of the votes cast in the election by the holders of the
Common Stock represented and entitled to vote at the Annual Meeting. Abstentions and broker
non-votes will not be counted as votes for or against any director nominee. Any other matters that
may properly come before the meeting or any adjournment thereof shall be approved by the
affirmative vote of a majority of the votes cast by holders of Common Stock represented and
entitled to vote at the Annual Meeting, and abstentions and &#147;non-votes&#148; will have no effect on the
outcome of the vote.


<!-- link1 "MISCELLANEOUS" -->
<DIV align="left"><A NAME="013"></A></DIV>

<P align="center" style="font-size: 10pt"><B>MISCELLANEOUS</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In certain instances, one copy of the Company&#146;s Annual Report or Proxy Statement may be
delivered to two or more shareholders who share an address. The Company will deliver promptly upon
written or oral request a separate copy of the annual report or Proxy Statement, to a shareholder
at a shared address to which a single copy of the documents was delivered. Conversely,
shareholders sharing an address who are receiving multiple copies of annual reports or Proxy
Statements may request delivery of a single copy.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Requests should be addressed to:


<P align="left" style="font-size: 10pt; margin-left: 50%">R. Gregory Lewis<BR>
Secretary<BR>
J. Alexander&#146;s Corporation<BR>
3401 West End Avenue, Suite&nbsp;260<BR>
P. O. Box 24300<BR>
Nashville, Tennessee 37202<BR>
(615)&nbsp;269-1900


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A copy of the Company&#146;s Annual Report is being mailed to shareholders concurrently with the
mailing of this Proxy Statement. It is important that proxies be returned promptly to avoid
unnecessary expense. Therefore, shareholders who do not expect to attend in person are urged,
regardless of the number of shares of stock owned, to date, sign and return the enclosed proxy
promptly.

<P align="left" style="font-size: 10pt"><B>A COPY OF THE COMPANY&#146;S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED JANUARY 2, 2005 MAY BE
OBTAINED, WITHOUT CHARGE, BY ANY SHAREHOLDER TO WHOM THIS PROXY STATEMENT IS SENT, UPON WRITTEN
REQUEST TO R. GREGORY LEWIS, SECRETARY, J. ALEXANDER&#146;S CORPORATION, P.O. BOX 24300, NASHVILLE,
TENNESSEE 37202.</B>



<P align="left" style="font-size: 10pt">Date: April&nbsp;29, 2005



<P align="center" style="font-size: 10pt">24
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<!-- link1 "APPENDIX A" -->
<DIV align="left"><A NAME="014"></A></DIV>

<P align="center" style="font-size: 10pt"><B>APPENDIX A</B>



<P align="center" style="font-size: 10pt"><B>J. ALEXANDER&#146;S CORPORATION<BR>
RESTATED AUDIT COMMITTEE CHARTER</B>



<P align="left" style="font-size: 10pt"><B><I>Organization</I></B>


<P align="left" style="font-size: 10pt">This charter governs the operations of the audit committee (the &#147;committee&#148;) of J. Alexander&#146;s
Corporation (the &#147;Company&#148;). The committee shall review and reassess the charter at least annually
and obtain the approval of the board of directors for any changes. The committee shall be
appointed by the board of directors (the &#147;Board&#148;) and shall be comprised of at least three
directors, and the committee&#146;s members will meet the independence, experience and other
requirements of the American Stock Exchange (&#147;AMEX&#148;), Section&nbsp;10A(m)(3) of the Securities Exchange
Act of 1934 (the &#147;Exchange Act&#148;) and rules and regulations of the Securities and Exchange
Commission (&#147;SEC Rules&#148;).


<P align="left" style="font-size: 10pt">The Board will appoint annually the members of the committee and shall seek the Board&#146;s
determination as to whether the committee has an &#147;audit committee financial expert&#148; as defined by
SEC Rules and whether such expert is &#147;independent&#148; from management as defined in Schedule&nbsp;14A of
the SEC Rules. Each member shall be able to read and understand fundamental financial statements,
including the Company&#146;s balance sheet, income statement and cash flow statement. Additionally, at
least one member must have accounting or related financial management expertise as determined by
the Board in its business judgment.



<P align="left" style="font-size: 10pt"><B><I>Meetings And Procedures</I></B>


<P align="left" style="font-size: 10pt">The committee shall meet as often as it determines, but not less frequently than quarterly. The
committee may request any officer or employee of the Company or the Company&#146;s outside counsel or
independent auditor, or any other persons whose presence the committee believes to be necessary or
appropriate, to attend a meeting of the committee or to meet with any members of, or advisors to,
the committee.


<P align="left" style="font-size: 10pt">The committee may retain any independent counsel, experts or advisors (accounting, financial or
otherwise) that the committee believes to be necessary or appropriate. The committee may also
utilize the services of the Company&#146;s regular counsel or other advisors to the Company. The
Company shall provide for appropriate funding, as determined by the committee, for payment of
compensation to the independent auditor for the purpose of rendering or issuing an audit report, or
performing other audit, review or attest services for the Company; compensation to any advisors
employed by the committee; and ordinary administrative expenses of the committee that are necessary
or appropriate in carrying out its duties.


<P align="left" style="font-size: 10pt">In discharging its duties and responsibilities, the committee is authorized to investigate any
matter within the scope of its duties and responsibilities or as otherwise delegated by the Board,
with full access to all books, records and personnel of the Company.



<P align="center" style="font-size: 10pt">
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<P align="left" style="font-size: 10pt"><B><I>Statement of Policy</I></B>


<P align="left" style="font-size: 10pt">The audit committee shall provide assistance to the board of directors in fulfilling their
oversight responsibility to the shareholders, potential shareholders, the investment community, and
others relating to the Company&#146;s financial statements and the financial reporting process, the
systems of internal accounting and financial controls, the annual independent audit of the
Company&#146;s financial statements, and the legal compliance and ethics programs as established by
management and the board. In so doing, it is the responsibility of the committee to maintain free
and open communication between the committee, its independent auditor, and management of the
Company.



<P align="left" style="font-size: 10pt"><B><I>Responsibilities and Processes</I></B>


<P align="left" style="font-size: 10pt">The primary responsibility of the committee is to oversee the financial reporting process of the
Company and the audits of the financial statements of the Company. Management is responsible for
preparing the Company&#146;s financial statements, and the independent auditor is responsible for
auditing those financial statements. The committee recognizes that the Company&#146;s financial
management, as well as the independent auditor, have more knowledge and more detailed information
regarding the Company and its financial reports than do committee members; consequently, in
carrying out its duties and responsibilities, the committee, including any person designated as the
audit committee financial expert, is not providing any expert or special assurance as to accuracy
or completeness of the Company&#146;s financial statements or any professional certification as to the
independent auditor&#146;s work, and is not conducting an audit or investigation of the financial
statements nor determining that the financial statements are true and complete or have been
prepared in accordance with generally accepted accounting principles (&#147;GAAP&#148;) and SEC Rules.
Furthermore, the committee in carrying out its responsibilities believes its policies and
procedures should remain flexible, in order to best react to changing conditions and circumstances.
The committee should take the appropriate actions to set the overall corporate &#147;tone&#148; for quality
financial reporting, sound business risk practices, and ethical behavior. In addition, the
committee shall make regular reports to the Board and shall prepare the report required by the SEC
Rules to be included in the Company&#146;s annual proxy statement.


<P align="left" style="font-size: 10pt">The following shall be the principal recurring processes of the committee in carrying out its
oversight responsibilities. The processes are set forth as a guide with the understanding that the
committee may supplement them as appropriate.



<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&#149;&nbsp;&nbsp;</TD>
    <TD>The committee shall have the sole authority to appoint or replace
the independent auditor. The committee shall be directly
responsible for the compensation and oversight of the work of the
independent auditor (including resolution of disagreements between
management and the independent auditor regarding financial
reporting) for the purpose of preparing or issuing an audit report
or related work or performing other audit, review or attest
services for the Company. The independent auditor shall report
directly to the committee.</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&#149;&nbsp;&nbsp;</TD>
    <TD>The committee shall pre-approve all auditing services and
permitted non-audit services (including the fees and terms
thereof) to be performed for the Company by its independent
auditor, subject to the de minimus exceptions for non-audit
services in accordance with Section&nbsp;10A(i)(1)(B) of the Exchange
Act which are approved by the committee prior to the completion of
the audit. Approval by the committee of a non-audit service shall
be disclosed in the reports filed by the Company with the SEC or
otherwise as required by law and SEC Rules. Committee
pre-approval of audit and non-audit services will not be required
if the engagement for the services is entered into pursuant to
pre-approval policies and procedures established by the committee
regarding the Company&#146;s engagement of the independent auditor,
provided the policies and procedures are detailed as to the
particular services, the committee is informed of each service
provided and such policies and</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt">
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<P><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;&nbsp;&nbsp;</TD>
    <TD>procedures do not include delegation of the committee&#146;s responsibilities under the Exchange Act
to the Company&#146;s management. The committee may delegate to one or more designated committee
members the authority to grant pre-approvals of audit and permitted non-audit services, provided
that any decisions to pre-approve shall be presented to the full committee at its next scheduled
meeting.</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&#149;&nbsp;&nbsp;</TD>
    <TD>The committee shall discuss with the independent auditor the
overall scope and plans for its audits, including the adequacy of
staffing and compensation. Also, the committee shall discuss with
management and the independent auditor the adequacy and
effectiveness of the accounting and financial controls and the
Company&#146;s major financial risk exposures (including the Company&#146;s
system to monitor and manage such exposures), and its policies
with respect to risk assessment and risk management, including
business risk, and legal and ethical compliance programs.
Further, the committee shall meet with the independent auditor,
with and without management present, to discuss the results of its
examinations.</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&#149;&nbsp;&nbsp;</TD>
    <TD>The committee shall review and discuss with management and the
independent auditor the annual audited and quarterly unaudited
financial statements, and the Company&#146;s disclosures under
&#147;Management&#146;s Discussion and Analysis of Financial Condition and
Results of Operation&#148; provided on Form 10-Q and Form 10-K. The
review and discussion of the financial statements and the matters
covered in the independent auditor&#146;s report, if applicable, shall
occur prior to the public release of such financial statements and
the review and discussion of the related disclosure, including the
&#147;Management&#146;s Discussion and Analysis of Financial Condition and
Results of Operation&#148;, shall occur prior to the filing of the Form
10-Q or Form 10-K. The committee shall review and discuss with
management and the independent auditor material related party
transactions as defined in the Statement of Financial Accounting
Standards No.&nbsp;57 and other accounting and regulatory
pronouncements. The committee also shall review and discuss with
the independent auditor the matters required to be discussed by
Statement of Auditing Standards No.&nbsp;61, as may be modified or
supplemented. Based on such review and discussion, and based on
the disclosures received from, and discussions with, the
independent auditor regarding its independence as provided for
below, the committee shall consider whether to recommend to the
Board that the audited financial statements be included in the
Company&#146;s Annual Report on Form 10-K.</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&#149;&nbsp;&nbsp;</TD>
    <TD>The committee shall review and discuss with the independent
auditor prior to the filing of the Annual Report on Form 10-K the
report that such auditor is required to make to the committee
regarding: (A)&nbsp;all accounting policies and practices to be used
that the independent auditor identifies as critical; (B)&nbsp;all
alternative treatments within GAAP for policies and practices
related to material items that have been discussed among
management and the independent auditor, including the
ramifications of the use of such alternative disclosures and
treatments, and the treatment preferred by the independent
auditor; and (C)&nbsp;all other material written communications between
the independent auditor and management of the Company, such as any
management letter, management representation letter, reports on
observations and recommendations on internal controls, independent
auditor&#146;s engagement letter, independent auditor&#146;s independence
letter and schedule of unadjusted audit differences, if any.</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&#149;&nbsp;&nbsp;</TD>
    <TD>The committee shall discuss with management and the independent
auditor: (A)&nbsp;major issues regarding accounting principles and
financial statement presentations, including any significant
changes in the Company&#146;s selection or application of accounting
principles, any major issues as to the adequacy of the Company&#146;s
internal controls and any special steps adopted in light of
material control deficiencies; and (B)&nbsp;analyses prepared by
management and/or the independent auditor setting forth
significant financial reporting issues and judgments made in
connection with the preparation of the Company&#146;s financial
statements. The committee shall discuss</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt">
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<P><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;&nbsp;&nbsp;</TD>
    <TD>with management and the independent auditor the effect of regulatory and accounting initiatives,
as well as off-balance sheet structures, on the Company&#146;s financial statements.</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&#149;&nbsp;&nbsp;</TD>
    <TD>The committee shall discuss earnings press releases, including the
use of &#147;pro forma&#148; or &#147;adjusted&#148; non-GAAP information. The
committee shall also discuss generally the financial information
and earnings guidance which has been or will be provided to
analysts and rating agencies.</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&#149;&nbsp;&nbsp;</TD>
    <TD>The committee shall regularly review with the independent auditor
any difficulties the independent auditor encountered during the
course of the audit work, including any restrictions on the scope
of activities or access to requested information or any
significant disagreements with management and management&#146;s
responses to such matters. In this connection, among the items
that the committee may review with the independent auditor are:
(A)&nbsp;any unadjusted audit differences; (B)&nbsp;any communications
between the audit team and the independent auditor&#146;s national
office respecting auditing or accounting issues presented by the
engagement; and (C)&nbsp;any &#147;management&#148; or &#147;internal control&#148; letter
issued or proposed to be issued by the independent auditor to the
Company.</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&#149;&nbsp;&nbsp;</TD>
    <TD>The committee shall:</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left">&#150;&nbsp;&nbsp;</TD>
    <TD>evaluate the independent auditor&#146;s qualifications, performance and
independence, including the review and evaluation of the lead partner of the audit
engagement team, taking into account the opinions of management and present its
conclusions to the Board;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left">&#150;&nbsp;&nbsp;</TD>
    <TD>ensure the rotation of the lead audit partner of the independent auditor and
audit engagement team partners as required by SEC Rules and consider whether there
should be regular rotation of the audit firm itself;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left">&#150;&nbsp;&nbsp;</TD>
    <TD>receive from the independent auditor annually a formal written statement
delineating all relationships between the independent auditor and the Company
consistent with Independence Standards Board Standard No.&nbsp;1, as may be modified or
supplemented by such other standards as may be set by law or regulation or the AMEX
Company Guide or the Public Company Accounting Oversight Board;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left">&#150;&nbsp;&nbsp;</TD>
    <TD>discuss with the independent auditor in an active dialogue any such disclosed
relationships or services and their impact on the independent auditor&#146;s objectivity and
independence and present to the Board its conclusion with respect to the independence
of the independent auditor;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left">&#150;&nbsp;&nbsp;</TD>
    <TD>obtain and review, at least annually, a report by the independent auditor
describing the auditing firm&#146;s internal quality control procedures and any material
issues raised by its most recent internal quality control review or peer review, or by
any inquiry or investigation by governmental or professional authority, within the
preceding five years, respecting one or more independent audits carried out by the
auditing firm and any steps taken to deal with any such issues; and</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left">&#150;&nbsp;&nbsp;</TD>
    <TD>establish hiring policies regarding employees and former employees of the
Company&#146;s independent auditor.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt">
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<P><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&#149;&nbsp;&nbsp;</TD>
    <TD>The committee shall establish procedures for the receipt,
retention and treatment of complaints regarding accounting,
internal accounting controls, or auditing matters and for the
confidential, anonymous submission by employees of concerns
regarding questionable accounting or auditing matters.</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&#149;&nbsp;&nbsp;</TD>
    <TD>The committee shall receive reports from the principal executive
or financial officers of the Company regarding their evaluation of
the effectiveness of the Company&#146;s disclosure controls and
procedures and the Company&#146;s internal control over financial
reporting; regarding all significant deficiencies in the design or
operation of internal control over financial reporting which could
adversely affect the Company&#146;s ability to record, process,
summarize or report financial data and whether they have
identified for the independent auditor any material weakness in
internal controls; regarding any fraud, whether or not material,
that involves management or other employees who have a significant
role in the Company&#146;s internal control over financial reporting;
and regarding whether there were significant changes in internal
control over financial reporting or in other factors that could
significantly affect internal control over financial reporting
subsequent to the date of their evaluation, including corrective
actions with regard to significant deficiencies or material
weaknesses.</TD>
</TR>

</TABLE>



<P align="center" style="font-size: 10pt">
</DIV>


<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">

</DIV>

<DIV align="center">
<B><FONT size="2">J. ALEXANDER&#146;S CORPORATION</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">EMPLOYEE STOCK OWNERSHIP PLAN PARTICIPANT
VOTING INSTRUCTION FORM</FONT></B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">This Voting Instruction Form is tendered to
direct SunTrust Bank, Nashville, N.A. (the &#147;Trustee&#148;),
as Trustee of the J.&nbsp;Alexander&#146;s Corporation Employee
Stock Ownership Plan (&#147;ESOP&#148;), as to the manner in
which all allocated shares in the ESOP account of the
undersigned (the &#147;Voting Shares&#148;) shall be voted at
the Annual Meeting of Shareholders (the &#147;Annual
Meeting&#148;) to be held at Loews Vanderbilt Hotel, 2100 West
End Avenue, Nashville, Tennessee 37203 on Friday, May&nbsp;27,
2005, at 10:00 a.m., local time, and any adjournments or
postponements thereof.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The undersigned hereby directs the Trustee to
vote all Voting Shares of the undersigned as shown below on this
Voting Instruction Form at the Annual Meeting.
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(1)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Election of Directors:
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2"><FONT face="wingdings">&#111;</FONT><B>&nbsp;</B></FONT></TD>
    <TD align="left">
    <B><FONT size="2">FOR</FONT></B><FONT size="2"> all of the
    following nominees (except as indicated to the contrary below):
    </FONT></TD>
</TR>

</TABLE>

<DIV align="left">
<FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;T.
Duncan, G. Fritts, B. Rector, B. Reed, J. Steakley and L. Stout.
</FONT>
</DIV>

<P align="left">
<FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To
withhold authority to vote for any individual nominee, please
print name or names below:
</FONT>

<DIV align="left">
<HR size="1" width="100%" align="left" noshade>
</DIV>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#111;</FONT>&nbsp; </FONT></TD>
    <TD align="left">
    <B><FONT size="2">WITHHOLD AUTHORITY
    </FONT></B><FONT size="2">to vote for all nominees
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(2)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">In the Trustee&#146;s discretion, the Trustee is
    entitled to act on any other matter which may properly come
    before said meeting or any adjournment thereof.
    </FONT></TD>
</TR>

</TABLE>

<P align="center">
<I><FONT size="2">(Continued and to be signed on reverse
side)</FONT></I>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<I><FONT size="2">(Continued from other side)</FONT></I>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;
<B><FONT size="2">IMPORTANT: Please date and sign this Voting
Instruction Form </FONT></B><FONT size="2">and return it to the
Trustee of the J. Alexander&#146;s Corporation Employee Stock
Ownership Plan, SunTrust Bank, Nashville, N.A., P.O.
Box&nbsp;305110, Nashville, Tennessee&nbsp;37230-9979 by
May&nbsp;23, 2005.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;
<FONT size="2">A stamped and addressed envelope is enclosed for
your convenience. <B>Your Voting Instruction Form must be
received by the Trustee by May&nbsp;23, 2005.</B>
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;
<FONT size="2">Your shares will be voted by the Trustee in
accordance with your instructions. If no choice is specified,
your shares will be voted <B>FOR </B>the nominees in the
election of directors.
</FONT>

<P align="center">
<B><FONT size="2">PLEASE SIGN, DATE AND RETURN
PROMPTLY</FONT></B>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="52%"></TD>
    <TD width="48%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <HR size="1" align="left" noshade></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <HR size="1" align="left" noshade></TD>
</TR>

</TABLE>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="50%"></TD>
    <TD width="50%"></TD>
</TR>

<TR valign="top">
    <TD align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Date:&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;, 2005</FONT></TD>
</TR>

</TABLE>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="52%"></TD>
    <TD width="48%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="right">
    <HR size="1" align="right" noshade></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">Please sign exactly as your name appears at left.
    If registered in the names of two or more persons, each should
    sign. Executors, administrators, trustees, guardians, attorneys,
    and corporate officers should show their full titles.
    </FONT></TD>
</TR>

</TABLE>

<DIV align="left">
<HR size="1" width="100%" align="left" noshade>
</DIV>

<DIV align="center">
<FONT size="2">If your address has changed, please PRINT your
new address on this line.
</FONT>
</DIV>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<FONT size="2"> <B>PROXY</B>
</FONT>
</DIV>

<DIV align="center">
<B><FONT size="2">J. ALEXANDER&#146;S CORPORATION</FONT></B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">Proxy solicited by the Board of Directors for
the Annual Meeting of Shareholders to be held on Friday, May 27,
2005.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The undersigned hereby appoints Lonnie J. Stout
II and R. Gregory Lewis, and each of them, as proxies, with full
power of substitution, to vote all shares of the undersigned as
shown below on this proxy at the Annual Meeting of Shareholders
of J.&nbsp;Alexander&#146;s Corporation to be held at Loews
Vanderbilt Hotel, 2100 West End Avenue, Nashville, Tennessee
37203 on Friday, May&nbsp;27, 2005, at 10:00 a.m., local time,
and any adjournments or postponements thereof.
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(1)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Election of Directors:
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2"><FONT face="wingdings">&#111;</FONT><B>&nbsp;</B></FONT></TD>
    <TD align="left">
    <B><FONT size="2">FOR</FONT></B><FONT size="2"> all of the
    following nominees (except as indicated to the contrary below):
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;T.
Duncan, G. Fritts, B. Rector, B. Reed, J. Steakley and L. Stout.
</FONT>

<P align="left">
<FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To
withhold authority to vote for any individual nominee, please
print name or names below:
</FONT>

<DIV align="left">
<HR size="1" width="100%" align="left" noshade>
</DIV>

<P align="left">
<FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#111;</FONT>&nbsp;<B>WITHHOLD
AUTHORITY </B>to vote for all nominees
</FONT>

<P align="left">
<FONT size="2">(2)&nbsp;In their discretion on any other matter
which may properly come before said meeting or any adjournment
thereof.
</FONT>

<P align="center">
<B><FONT size="2">IMPORTANT: </FONT></B><FONT size="2">Please
date and sign this proxy on the reverse side.
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Your shares will be voted in accordance with your
instructions. If no choice is specified, shares will be voted
<B>FOR</B> the nominees in the election of directors.
</FONT>

<P align="center">
<B><FONT size="2">PLEASE SIGN HERE AND RETURN PROMPTLY</FONT></B>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="52%"></TD>
    <TD width="48%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <HR size="1" align="left" noshade></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <HR size="1" align="left" noshade></TD>
</TR>

</TABLE>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="50%"></TD>
    <TD width="50%"></TD>
</TR>

<TR valign="top">
    <TD align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Date:&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;, 2005</FONT></TD>
</TR>

</TABLE>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="52%"></TD>
    <TD width="48%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="right">
    <HR size="1" align="right" noshade></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">Please sign exactly as your name appears at left.
    If registered in the names of two or more persons, each should
    sign. Executors, administrators, trustees, guardians, attorneys,
    and corporate officers should show their full titles.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<HR size="1" width="100%" align="left" noshade>

<DIV align="center">
<FONT size="2">If you have changed your address, please PRINT
your new address on this line.
</FONT>
</DIV>
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`
end
</TEXT>
</DOCUMENT>
</SUBMISSION>
