UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 14A
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Cracker Barrel Old Country Store, Inc. (Name of Registrant as Specified In Its Charter)
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Investor Contact: Cracker Barrel Old Country Store, Inc. Lawrence E. Hyatt, Senior Vice President and Chief Financial Officer, 615-235-4432 or MacKenzie Partners, Inc. Mark Harnett, 212-929-5877 or Media Contact: Cracker Barrel Old Country Store, Inc. Julie K. Davis, Senior Director, Corporate Communications, 615-443-9266 or Kekst and Company Ruth Pachman, 212-521-4891
Cracker Barrel Files Updated Presentation on Biglari Holdings Proxy Contest
Underscores initial indicators of success under new leadership
Urges shareholders to reject Biglari’s self-nomination to the Board and vote FOR Cracker Barrel’s nominees
LEBANON, Tenn., November 29, 2011--(BUSINESS WIRE)—Cracker Barrel Old Country Store, Inc. (“Cracker Barrel” or the “Company”) (Nasdaq: CBRL) today filed an updated version of its investor presentation in its proxy contest with Biglari Holdings Inc. The new presentation highlights the progress Cracker Barrel has made under new leadership, and outlines in additional detail why it believes Sardar Biglari is wrong for Cracker Barrel and why shareholders should NOT support him in his attempt to gain a seat on the Company’s Board of Directors.
The Company’s updated presentation can be found at the following link: http://investor.crackerbarrel.com/proxy_contest.cfm
The presentation emphasizes that Cracker Barrel:
• Stock has outperformed the market and peers over the long term;
• Has a strategy in place for its next phase of growth under new CEO Sandy Cochran that is delivering results;
• Has significantly renewed the Board and management with experienced, engaged, energetic leaders, and
• Continues to strive for operational excellence and create value for shareholders.
It further sets forth the Company’s views on how Mr. Biglari: • Has previously used a proxy fight to gain control without paying a premium to shareholders;
• Has a history of extraordinary turnover on boards after he joins;
• Raises business and legal conflicts of interest issues as the CEO of a restaurant company that the Company believes competes with Cracker
Barrel;
• Has engaged in what the Company views as poor corporate governance and self-interested transactions, and
• Has raised ideas for Cracker Barrel that are not appropriate at this time.
Cracker Barrel urges its investors to vote the WHITE card in favor of the Company’s Board nominees.
About Cracker Barrel Cracker Barrel Old Country Store restaurants provide a friendly home-away-from-home in their old country stores and restaurants. Guests are cared for like family while relaxing and enjoying real home-style food and shopping that’s surprisingly unique, genuinely fun and reminiscent of America’s country heritage…all at a fair price. The restaurant serves up delicious, home-style country food such as meatloaf and homemade chicken n’ dumplins as well as its signature biscuits using an old family recipe. The authentic old country retail store is fun to shop and offers unique gifts and self-indulgences.
Headquartered in Lebanon, Tennessee, Cracker Barrel Old Country Store, Inc. (Nasdaq: CBRL) was established in 1969 and operates 608 company-owned locations in 42 states. Every Cracker Barrel unit is open seven days a week with hours Sunday through Thursday, 6 a.m. — 10 p.m., and Friday and Saturday, 6 a.m. - 11 p.m. For more information, visit: crackerbarrel.com.
Important Additional Information Cracker Barrel, its directors and certain of its executive officers may be deemed to be participants in the solicitation of proxies from Cracker Barrel shareholders in connection with the matters to be considered at Cracker Barrel’s 2011 Annual Meeting. On November 8, 2011, Cracker Barrel filed a definitive proxy statement (as it may be amended, the “Proxy Statement”) with the U.S. Securities and Exchange Commission (the “SEC”) in connection with any such solicitation of proxies from Cracker Barrel shareholders. INVESTORS AND SHAREHOLDERS ARE STRONGLY ENCOURAGED TO READ THE PROXY STATEMENT AND ACCOMPANYING PROXY CARD AND OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE AS THEY WILL CONTAIN IMPORTANT INFORMATION. Detailed information regarding the identity of potential participants, and their direct or indirect interests, by security holdings or otherwise, is set forth in the Proxy Statement, including Annex A thereto. Shareholders can obtain the Proxy Statement, any amendments or supplements to the Proxy Statement and other documents filed by Cracker Barrel with the SEC for no charge at the SEC’s website at www.sec.gov. Copies will also be available at no charge at the Investor Relations section of our corporate website at www.crackerbarrel.com. Cracker Barrel Old Country Store, Inc. (the “Company”) used the following presentation in meetings with Institutional Shareholder Services Inc. beginning on November 29, 2011. This presentation was also posted to the “Biglari Proxy Contest” section of the Company’s Investor Relations website, investor.crackerbarrel.com.
November 2011
Additional Information dCirsaccuksesre dB ainrr etlh iOs lpdr eCsoenutnattriyo nS taorere f,o Irnwca. r(d—-lothoek iCngo mstpaatenmy e)n utsrg tehsa tc aiuntviolnv ein r icsoknss, iudnercienrgta icnutrireesn ta ntrde nodths earn fda cetaorrnsi nthgast gmuaidya cnacues de iasctluoasle dre isnu ltthsi sa npdr epsernftoartmioann.c Ee xocfe tphte f oCro smpepcainfiyc thoi sdtiofrfiecra ml iantfeoriramllayt iforno,m m tahtotesres Mexopre sdsetda ioler di minpfloiremd aitni otnh ios nd irsisckus,s iuonnc. eArtlali nfotirews,a radn-dlo ootkhienrg f ainctfoorrsm iast iporno visid perdo vinid tehde pCuorsmupanant yto’s tfhieli nsagfse whaitrhb otrh ee sStaebcluirsihtieeds uand eEr xthche aPnrgive aCteo Smemcuirsistiioesn ,L pitriegsast iroelne aRseesfo arnmd Aotcht eor fc 1o9m9m5.unications. ITmhpe olretgaanlt iasdsduiet ioofn walh ienthfoerrm thaetiroe nis competition between the Company and Steak n Shake has not been determined by a court of law. Cracker Barrel’,s i t2s0 d1i1r eActnonrsu aaln Md ceeerttianign. oOf ni tNs oexveecmubtievre 8 o, f2fi0c1er1s, mCarayc kber dBeeamrreeld f itloe db ea pdaerftiincitpiavnet sp rionx tyh es tsaotelmicietnat i(oans oitf mpraoyx ibees afmroemn dCedra,c tkheer —BaPrrreolx syh aSrteahtoemldenrst i)n w ciothn ntehcet iUon.S w. iSthec tuhreit imesa tatnerds Etox cbhea ncognesidered at PCRomOXmYis sSioTnA (TthEeM —ENSETC A )N iDn cAoCnnCeOctMionP AwNitYh IaNnGy sPuRchO sXoYli cCitAatRioDn oAfN pDro xOiTesH fEroRm D COrCacUkeMr EBNarTreSl sFhILarEehDo lWdeIrTsH. * TINHVEE SSETCO RCSA RAENFDU SLHLYA RAENHDO ILND TEHRESI RA REEN TSITRREOTNYG WLYH EENN CTHOEUYR ABGEECDO MTOE RAEVAADIL TAHBELE fAoSrt hT iHnE tYhe WPrIoLxLy CSOtaNteTmAeInNt, IiMncPluOdRinTgA ANnTn eIxN FAO tRheMreAtoT. ISOhNar.e*h Doledtearisle cda nin ofobrtmaiant itohne rPergoaxrdyi nSgta ttheme iednetn, taintyy oafm peontdemnteianlt sp aorrt iscuippapnletsm, eanntds tthoe tihr ed iPreroctx oyr Sintadteirmecetn itn atenrde sotsth, ebry d soeccuumrietyn ths oflidleidn gbsy o Cr roatchkeerrw Bisaer,r eils wseith 2the SEC for no charge at the SEC’s website at www.sec.gov. Copies will also be available at no charge at the Investor Relations section of our corporate website at www.crackerbarrel.com.
Agenda II.. OCvrearcvkieerw Barrel’s Track IVII.. Onthgeori nPgr oTxrya nMsfaotrtmerastion of the Company 3V. Why We Believe Biglari is Wrong for Cracker Barrel
4Executive Summary
Key Facts to Consider in Your Recommendation SCtroack ehr aBs aoruretlperformed the market and peers over the long term Has sai gstnriaftiecgayn tilny prelnaceew feodr tnheex bt opahrads ea nodf mgraonwatghe munednetr wnietwh eCxEpeOri ethnacte dis, denelgiavgeeridn,g e nreesruglettsic leaders SCaorndtairn uBeisg ltaor istrive for operational excellence and create value for shareholders Has ap rheivsitooursyl yo fu tsuerdn opvroexr yin f ibgohatr dtos gafatienr hcoe njtorionls w Aitsh oCuEt Op aoyfi nag r eas tparuermaniut mco mtop sahnayr ethhoaltd weres believe competes with Cracker Barrel, Biglari raises business and legal conflicts of interest issues Has engaged in what 5we view as poor corporate governance and self-interested transactions Has raised ideas for Cracker Barrel that are not appropriate at this time
Gaining Momentum SWine cbee blieecvoem fiirnsgt qCuEaOrte ar nrdes aunltnso vuanlciidnagte h CerE sOp eSciafnicd yplans, comparable sales traffic, comparable restaurant sales, and comparable retail sales have improved sequentially each month through the quarter F1sutl lQ-yueaarrt egru EidPaSn coef r$ev1i.s0e3d cuopmwpaarrde dto t o$ 4F.i1r0st— C$a4ll. 2c5o nfrsoemns u$s4 .o0f5 $—0.$940.20 before proxy expenses R“Mesuecahrc bhe rtetaecr-ttihoanns- erexipnefcotrecde” 1w eF Qre1 o rne sthuelt sri gsuhpt ptroarctk o aunr dability to raise full year guidance o“Wutlei neexdp etcot bCeBarR frLu isth.”ares to outperform peers based on theWe think the nascent turnaround should be a vote of confidence in new CEO Sandra Cochran, as we argue the first fruits of CBRL s turnaround plan “SWteep hbeenl iAevned tehrseo mn,o Mnthilllyesra Tmaeb-askto, r2e 1s-aNleosv a-2c0ce1l1erations in 1Q12 were in part driven by initiatives undertaken late in the summer to emphasize value in both divisions, and we are encouraged that future sales Binriatida tLivuedsi ncgotmonm, uKneiycaBtea necx iCstaipnigta pl rMicearkets, 22-Nov-2011 i“m…pcroomvepms ehnatv ien citoinattiivneuse,d d teom sohgorwap sheiqc uterenntidasl simuppproorvteinmgent November…Cracker Barrel is well positioned to leverage the power of its brand… We are maintaining our Outperform rating on Cracker Barrel given SJeofuf rOcem: oChoumndpraon,y W fiellilnsg sF aarngdo pSuebcluirciatlileys ,a v2a2i-lNabolve- 2e0q1u1ity research. Permission to use quotations neither sought nor obtained 61 Jeff Omohundro, Wells Fargo Securities, 7-Nov-2011.
BWieg lBareil iaervgeu eBs itghlatr iw’se S suhgoguelsdt isotnosp Aopree nNinogt Anepwpr osptoriraetse aAndt Tshhoisu lTdi monel…y buy back shares. We believe that this strategy is wrong We bhealviee vdee vooutre din av essitgmniefnitc ainnt naemwo ustnotr eosf htiams eg eton earnataeldy zaitntgra cthtiev etr aredteu-ronfsf bfoert woeuern c anpeiwta ls tionrvee isntmveesntmt ent and returning cash to shareholders We rceotuuprnle c saesnhs aibnlde isntvoeres tg irno wthteh Cwoitmh praentuyr nin o tfh cea pfoitraml toof sdhiavriedheonlddse rasnd share repurchase B$6i5g lmarii lhliaosn a slshoa rseu rgegpeusrtcehda steh acta pw ea leloxwpleodre C oBwRneLd troe aolb etasitnat ebest terms on our new credit facility –lowering cost of debt and allowing for cost savings through merger of holding company TUhltei mcoastte loyf, cwape iwtaill li no ptheera pteu bwliitch d ceobmt mpaarrakbeltes aidsj uloswteedr ltehvaenr aigne aw shaeleth-leera sweeb alcekas (ee sopr ebcuiayl lrye awl heesnta tceoupled with additional transaction costs) 7We operate with attractive leverage at a low cost, and we believe our real estate strategy facilitates our ability to deliver the greatest value to our shareholders
…And We Have a Focused Plan But Remain Open to New Ideas We caoren tfioncuues etdo oevna tlhuea tsei xad sdtirtaitoengaicl apvrieonruiteise st oth darti vCeE lOon Sg atnedrmy Cshoacrherhaonl dhears voaulutleined to drive significant shareholder value pWrihoirliet iwzee kreym faoincu osp aerne atso new ideas, the ideas Mr. Biglari raises are not new –management and the board have discussed these ideas, and others not suggested by Mr. Biglari, over the past several years but must 8While international expansion and licensing of retail and food products sound exotic, they won’t produce the immediate “return on effort” that the six priorities will in terms of impact on the system
NWeew’r eC OEpOe na ptpoo Ninetwed I dine aSs eFprtoemb Aerny Source WAded leids t4en n teow o duirr eschtaorresh otold tehres board in the past 6 months 9However, based on his track record, potential conflict of interest and his interactions with our board to date, we believe Mr. Biglari would not be a constructive addition to our board
1I.0 Overview
3H0i sYtoerayr,s HDeerliitvaegrei n&g Supcceersiosr Returns PMleaansaignegm Peenot palned® t hCer eBatoianrgd Vofa lDueirectors have led the growth and evolution of Cracker Barrel Old Country Store into one of the top restaurant companies in America CNroavc k1e9r8 B1arrel MIPaOg.a zMinoen eliysts Aasm oenrei coaf’s 1g9ro9w0th chains FRaamnkileyd D#1ining Rcheasitna ubryant & MtopaIgnasztiintue,t ihoenlsd stiutclec eesvseirvye year gthive eanw (a1r9d yweaasrs) MAuikge 2 W00o0o Tdhooduayse 608 locations Dnaemc e1d9 9P8resident in 42 states aAcnqnuoisuinticoens of RJuencea p2i0ta0l7ization to caacphiteavle s atrpupcrtoupreriate AMnanrcohu n2c0e0s6 Ldiovgeasnti’tsu Rreo oafdhouseLogan’s Roadhouse 6T0o8d alyocations 1in9 8412 Ast a3t0es Year Record of Success 2011 1N1ote: Indexed Performance 5-Nov-1981 to 30-Sep-2011, excludes dividends
2C3r-aJcukne-r2 B01ar1rel Proceeds With Planned Succession While Biglari Nominates Himself 2B6i-gAlaurgi -d2e0m11an Bdsi gBlaorai rvde srbeatlsly f orer jhecimts sbeolfa radn ds ePat. oCfofeorley 2113-Juln--22001111 NBoHm Diniastcilnogs eCs o9m.7m%i tOtewe ninetresrhviipews Biglari and Cooley in San Antonio 1-SAeupg--22001111 BCiogmlapria nyo mofifneartse sB higimlarsie ltfo t on aBmoea rtdwo unaffiliated board members 2M3a-Mrcha rJcuhn-2e0 J1u1l yC ABuRgLu sNt oSmepitneamtibnegr Committee Meets to Consider New Board Members P17e-tJeursnoen-2 J0o1i1n sC Booleamrdan H. B27r-aJdufloyr-d2 0Jo1i1n sJ aBmoeasr dW. 91-Aug-2011 WSainldliraam B W. C. ochran Named CEO Effective 12-Sep-2011 Two long-term Board members announce they will not stand for re-election 1M2cCarten Joins Board
BExopaerdri eonf cDedir eBcotoarsd Eolfe Dctierde cStoerlse citsi vTeh Be iRogigrahpt hTyeam 1M9i9c9hael A. Woodhouse, CExEeOcu otifv teh eC Chaoimrmpaann yo ff rtohme C2o0m10p aunnyti ls i2n0c1e 1September 12, 2011. Served as Chairman of the Board from 2004 until 2011, as Executive Chairman President and CEO of the Company from 2001 until 2010 and as 2S0a1n1dra B. Cochran, President & CEO 2B0e0c9am ase CPrEeOsi doefn tB aonodk sC-AE-OM oinll iSoenp, tIenmc.b e(Nr 1A2S, D2A01Q1: fBolAloMwMin)g, ha elre asderivnigc eb oaso kC rreatcakieler rB inar rtehle’ ss oPurethsiedaesntetr nan Ud nCitOedO S, taa tpeosst she assumed in November 2010 after serving as CFO. Previously served from 2004 until 1R9o8b6ert V. Dale, Lead Director JParmeseids eWnt. oBf rWadifnodrdy 2H0i1ll1 Pet Food Company from March 1995 until its sale in July 1998; director of Genesco, Inc. (NYSE: GCO) 2000 to Present MDeaanna gaenmd eRnatl.p Phr eOvwioeuns lPyr osfeersvseodr afso rP trhees iPderanct taicned oCf EMOa noafg Uemnietnedt aGt lVasasn dCeorbrpilotr aUtinoinv,e ras ictoyn’ss oOlwideanti oGnr aodfu gatlea sSs cfhaoborilc aotfors in the United States and Canada, from 1999 to 2001. Previously served from 1992 to I1n9d9u9s tarsie Ps rIensci.dent and CEO of AFG MRiacnhaagrdin Jg. PDaortbnkeirn o2f0 t0h5e Tampa, Florida office of Ernst & Young, LLP from 1987 until June 2005 FCohuanrldeesd E C. oJorpnoersa t1e9 8C1ommunications, Inc., an investor/shareholder communications and public relations firm where he presently serves as Chairman and CEO CBh.Fai.r m(Jaacnk a) nLdo CwEerOy 1o9f 7L1oJac Companies Inc. He is also a practicing attorney CWhialliiramma nW o.f MDicaCmaortnednR 2o0c1k1 Hospitality Company (NYSE: DRH), a lodging-focused Real Estate Investment Trust that he founded in 2004 and took public in 2005. From 2001 through 2003, was the President wofo trhlde Marriott Services Group of Marriott International, Inc. Prior to that position, served as President and CEO of HMSHost Corporation which operates restaurants and retail stores in travel venues around the SMeanritohra PMar.t nMeri tacnhde lSl e1n9i9o3r Vice President at Fleishman-Hillard, Inc., an international communications consulting and public relations firm from 1987 until July 2005 PCroelseimdeannt /HC.E POe toefr sHoonl l2i0s1 E1nterprises, LLC, the human resources consulting firm he founded in 2004 following his service for Wal-Mart Stores, Inc. as Chief People Officer from 1994-2004 PArnedsriedae nMt a. nWd eCisEsO 2 0o0f3 Retail Consulting, Inc. Served as President of dELiA*s Corp., a multichannel retailer to teenage girls and young women, from May 2001 to October 2002 1N3ote: Two board members who are not standing for re-election are not listed
LCertatcekr etro B Saarrdela rM Baidgel aar iG, o2o2d-A Fuagi-t2h0 S11et:tlement Offer that Biglari Refused “U…nidne ra nth eaftf oorftf etro, bwee cwonosutlrdu citmivme,e tdhiaet eBlyo aardd a utoth oourirz Bedo amrde two om makuet uthalel ys eatgtlreemede nint doefpfeern tdheant tw dei rdecistocurss suenda fofinl iAatuedg uwsti t1h aBnidg lAarui gHuostl d1i0n.g”s or any other restaurant company, to be recommended by Biglari Holdings “aWndh aepnp wroev esdp obkye tohne ACuragcuksetr 10, 2011, you indicated that you would be willing to provide us with your proposed director nominees in connection with this offer…” 1—4Michael Woodhouse
1II5. Cracker Barrel ‘s history of Success
The Cracker Barrel Concept C•Oowunntsr ya nSdt oorpese racteros s6s0 482 O sltdates •HPloenaessint gv aPlueoeple®—genuine hospitality •OGlodo-dfa csohuionnteryd ccooouknitnry’ store 1•W6 elcome break for travelers
TMraedniut iHonaasl EMvoenlvue dO ftfoe rMs aintain Relevance and Reach N“Hewom Me-eSntuy lOe”f fCeroinugnstr yA pCpoeoalk itno’ Lighter Users WSuhnorliesseo Smaem Mploerrnin’ Sampler SFiaxn cGyr aFiinx inn’’s Meatloaf Dinner CGhrainckoelan Pna’ nDcaukme pBlirneaskfast Choiucnkteryn Dn’inner Plate 1V7egetable Salad
Retail is Integral to the GCuraecskt ewr aBitairnregl aErexaperience GRiofctsk efrosr ounn dthere $fr2o0nt porch CRreagcikoenra lB paroredlu bcrtasnded foods 1E8xclusive music
#W1i nFnaimngil yC oDnicneipntg RReessutlatusr ain tT aonpd ITnodpu sHtroyn Rorasn ikni nFgosod Quality, Cleanliness, Service, Menu Variety, Atmosphere, Reputation, and Likely to Recommend “-NBaetsito nB’rse aRkefsatsatu” raamnto (nCgo Fnsaummileyr DPicnkins g2 0C1h1a iNnsational Survey) T- oZpa goaft ’tsh e2 0F1u0l l&-S e2r0v1ic1e CRoenstsauumraenrt sS uinrv Ceyassual and Family Dining R- Canoknesdu mase rt hBe rTanodp M“Featmricilsy P Droingirnamg”— CTheacinh nfoomr 1ic9, CInocn. secutive Years in Restaurant & Institutions “Choice in Chains” Annual Consumer Survey M—oRset sRtaVur-aFnrtise n&dl yIn Sstiitt-uDtioownns MReasgtaazuirnaent in America for 10 Consecutive Years B- Teshte NGaotioodn aSla Rme sCtalurbant Chain in Readers ‘ Choice awards G—oPlda cAkawgaerdd T–r aCvoeul rIinesr iMderagazine ‘s Favorite Group Friendly Restaurant 1—9NTA Tour Operators
Peoewrse rafunld CMoanrckeeptt OHvaesr OLuotnpge rTfoerme…d Last 150 Y Yeaerasrs 1In6d0e%xe 1d4 P0r%ic e120% 100% 80% 60% 40% 20% (15.0.3)%)% (18.7)% DSeapil-y2 0f0ro6m J u2l9-2-S00ep7- 2M00ay6- 2to0 0380 -MSeapr--22000191 Jan-2010 Nov-2010 Sep-2011 2In8d0e%xe 2d5 P0r%ic e220% 190% 160% 130% 100% 70% 40% DSeapil-y2 0f1ro1m M 2a8y--S2e0p0-32 0J0an1- 2to0 0350 -Seepp--22000161 May-2008 Jan-2010 Sep-2011 SCoraucrkce:r Blaorroeml Rbeersgt aausr aonft 3P0e-eSresp S-2&0P11 500 Index 2N0ote: Peer group includes Biglari Holdings, Brinker, Cheesecake Factory, Darden, PF Chang s, Ruby Tuesday, and Texas Roadhouse
2….0A %nd Five-Year Total Shareholder Return Exceeds Peers 12.86 % (21.69)% P(2e.e4r) %Median: (2.4)% (243.1.7)%)% SCoraucrkce:r SB&arPre lR Besigealarcrih HInoslidgihntg,s 3 B0-rSinekpe-r2 0C1h1e.e sTeoctaakle R Deaturdrnen i sP d.Fef.i nCehda nasg:’ s“ TRhueb Ty oTtaule sRdeatyu rTne cxoans cFepactsto arrye Ranenstuaaulriaznedts rRatoesa dohfo ruestuern reflecting monthly price appreciation plus reinvestment of monthly dividends 2an1d the compounding effect of dividends paid on reinvested dividends.”
Traffic Is Only One Component of Same Store Sales Growth 1C0r0ac.0k e%r Barrel Same Store Sales Indexed to 2004 1023.01 % 1032.27 % 1021.34 % FY20054 FY20076 FY20098 SFtYea2k0 1n0’ Shake Same Store Sales Indexed to 2004 1020.90 % 9160.09. 7% % 930.70 % F10Y02.80 0%4 FY20065 FY20087 FY201009 2S2ource: Public Filings
COumr Sualamtiev eS tCoorem Spaalreasb lGe rSowamthe OSutotpree rSfoarlmess IKndneaxp,p F-TYra2c0k0™6 = C 1a0su0al Dining 1B0a0s.e0 Year 1010.27 19090.5.3 9110.01.5 FY076 FY098 FY110 KCnraacpkpe-rT Braacrkre™l Casual Dining Index* 2N3ote: Knapp-Track™ Casual Dining Index same store sales figure is an approximation based on the weekly averages. Biglari Holdings does not participate based in Knapp-Track™
EWseti mHaavteed A Lcahtieesvt eTd wa eMlveo rMe Aontttrhasc tRivOe IRCeturn on Invested Capital 81.56. 5% % 145.82 % 124.58 % 51.18. 8% % BCirgaclakreir HBoalrdreinl gs BDrairndkeenr RInetsetranuartainotnsal PC.hFe.e sCehcaakneg ’Fsactory RTeuxbays TRuoeasddhaoyuse NSoouterc: eR: OCIaCp ictaall cIuQla atendd alsa tNesOt PavAaTil aobvlee rp 1u-byleiacrl ya-vfielreadg eC ionmvepsatneyd Fcaipniatnacl.i aCl BStRatLe mNeOnPtsA aTs oadf j3u0s-tSede pf-o2r0 $121.8mm in one-time charges. Invested Capital calculated as Book Value of Total Debt plus Book Value of 2T4otal Equity. Debt figures exclude interest rate swap liability as not considered invested capital
2II5I. Ongoing Transformation of the Company
1C2E 3O 4S 5an 6dy Cochran Brings Experience, Energy and a Plan to Grow Traffic, Sales, Profits and Shareholder Value RNefwin meda rmkeetniun ga nmde pssriacgiinngg 2E6nhanced restaurant operating platform Innovative tactics driving retail sales growth Focused cost reduction Balanced approach to capital allocation
1CBRL Strategic Initiatives RNeiwn fMorcaerk Aetuinthge nMtiecs sVaagliuneg NMeawrk eatdivnegr tsipsienngd ftiorm increase media coverage •Advertising to build traffic •Newly-redesigned website & social media initiative R2 efined Menu and Pricing Increase gVuaersiet tvyi s&it sEveryday Affordability 3Promotional strategy of limited-time offers New offerings at more accessible price points SEunshtaanicneadb lRy eIsmtapurroavnet Othpee Grautiensgt EPxlaptefroiremnce 2R7efinement of restaurant operating platform Increased focus on guest experience has driven sequential improvement in guest satisfaction
CBRL Strategic Initiatives I4nnovative Tactics Driving Retail Sales Growth •DEemlivpehra sVizaelu uen &iq uCeo annnde cptriopnr iWetiatrhy tihtem Bsr asnudch as Cracker Barrel branded food, regional offerings, and new exclusive doll line •Highlight affordability with strong price points and prominent locations for giftable 5offerings RFoecduuscetido nCost •ONffeswet sCysotmemm oexdpiteyc tPedre stosu rreeduce labor cost 10-20bps •Controlling food waste, supplies, maintenance and transportation expenses •$10mm annual savings from staff reductions B6 alanced Approach to Capital Allocation •EInnhvaensctme eSnhtasr eihno nldewer sVtoalrue egrowth that are accretive to shareholder value 2•S8teady return of capital including 13.6% increase in quarterly dividend & $65mm share repurchase authorization New $750mm credit facility
AWnhaalty sAt nCaloymstms Aenrtea rSyaying “WMea nbaegleiemveen mt uanpa-tgoe-mtheen-ct,h alellde nbgye ”new President, CEO Sandy Cochran and Chairman Mike Woodhouse, remain intently focused to recapture the strong operating trends which catapulted CBRL shares to almost “trWipele a orev epra rtthiec uplasrlty d eencacdoeu…rag -eRd obbye rtth De esrerqinugentotina,l Mmorngtahnly K iemegparonv; e1m4-eSnet pa-s2 0w1e1 head into the key holiday sales period… Our outperform rating on Cracker Barrel reflects our view of the company’s improvement -iJneitfifa Otivmeos”hundro, Wells Fargo Securities; N7-eNwo vC-2E0O1 1Sandra Cochran has addressed the Company’s critics effectively by developing a credible plan to build traffic and grow margin. —Stephen Anderson, Miller Tabak; 13-Sep-2011 —“WBer ydaon n Eotl leioxtp,e Rcta mymanoyn ds hJaarmeheosl;d 1e5rs- Stoep s-u2p0p1o1rt [Biglari’s] bid.” t“hIne atibmileitsy p taos tm [Bakieg ldarai mhaasti]c t apkoesnit iovne mchuacnhg essm ianl ltehr ec ocommppananieys’ st hbaut swineerses v meroyd peol oarsl yh em haansa gined p. rIino rt hcoomsep iannsiteasn.c —es, -hReo fboeurtn dD ererrliantigvteolny, lMowo-rhgaanng Kinege gfaruni;t Ntoa smhvaiklele s Tomenen epsosseiatniv, e1 c4h-Sanegpe-2s.0 1I 1don’t think Biglari has 2S9ource: Publicly available equity research reports and the Nashville Tennessean, permission to use quotations neither sought nor obtained
3IV0. Other Proxy Matters
Shareholder-Friendly Rights Plan Keeps Biglari From Creeping Control SAhdaorpetheodl dienr rfersipenodnlsye ptoro Bviisgiloanris :Holdings’ clearance under the Hart-Scott-Rodino Act to acquire up to 49.99% of the Company’s common stock (-“ Rquigalhitfsy ipnlga no fwfeorusl”d) not be triggered by acquisitions pursuant to all-cash, fully financed tender offers that remain open for a minimum of 60 business days —Rights epxlapnir eis i f oschuasreedh oolnd ecrrse edpoi nngo ta caqpupirsoivtieo rnisg hatbso pvlea n1 0a%t D aencde mwboeurl d2 0n1o1t daentneur aal nmoene-tcionegrcive cash offer for all shares B—igIfl asrhi’asr eAhorglduemrse natp pthroavt et,h eri gRhitgsh wtso Pulladn e wxpaisr eN iont SNeepcteesmsabreyr I2s0 B14elied by His Own Words in “BInig fluarlif iHllionlgd itnhgast’ o2b0j1ec0t iLveet,t ewr eF wroimll rTeqhue iCreh faaivrmoraanb:le investment opportunities, preferably controlling interests in businesses with diverse operating and financial traits.” 3“W1 e are control investors…”
Cracker Barrel Rights Plan Compares Favorably to ISS Recommended Attributes SChraacrekheor lBdear rrealt iRfiicgahtitos nP: lLaness than 3 months following adoption LMimanidtatioornys r eodne mFupttuioren :R Aeduetmomptaitoicn sr:e dNeom dpetiaodn-h wanitdh,i nsl o3w m-hoannthds o or fs aim qiularl ifeyaintugr eosffer Therrmes:h o3l dy:e a1r0s %if (aspapmroev tehdr ebsyh oslhda raesh Tolednenresssee Business Combination Act that precludes mergers for 5 years) *RAatsi osneat lfeo:r tDhe tienr IcSreSe p2i0n1g1 a Ucq.uSi.s iPtironx yo fV cootnintrgo lG wuiidtheoliunte sp rSemumiumma rbyy investor with history of doing so. SIShSar eRheoclodmerm Reantdifeidc aAtitotnri:b Wuteitsh*in 12 months of adoption LSihmariethatoilodnesr orend eFmutputrieo nR: eIdf ebmopartdio rnesf:u sneos dtoea rde-dheaenmd, 3s lmowon-hthans da foter rs aimnniolaurn fceeamtuernest of a qualifying offer, 10% of shareholders may call special meeting to approve redemption or act by written consent Therrmes:h oNlod :m Goernee trhalalny 32 0y%ea,r sb uift a4p.p9r%ov feodr bNyO sLh arrieghhotsld pelrasns 3R2ationale: Should be thoroughly explained
TWhhey 1 a0 %10 %thr eRsihgohltds iPs lnanar rTohwrelysh toalrdg?eted at a party seeking to make a creeping acquisition of control without paying a premium -it does not interfere with takeover bids CBriagclakreir hBasa rrae lh ihsatso ray sotrfo mnga kgionvge arn carneceep ipnrgo faicleq uthisaitt iwono uolfd cnoontt rdoelt eart aS tteaakke onv eSrh baikde: 2N0o% s toafg gsheraerdeh booldaredrs can call special meetings UMnedrgere rtsh e/ bTuesninneesssse ec oBmubsiinnaetsiso nCso mabyin baeti oapnp Arocvt,e da nbyy bai dsdimerp wleh mo awjoanrittsy tvoo lteeave open possibility of a merger at appropriate change-of-control premium would not cross 10% whether or not company had a 10% Trihgeh tqsu pallaifny,i ndgu eo tfofe rf ipvreo-yveiasri osnt arteuitnofroyr cbeasr the narrowness of the rights plan: rAeqllu ciraesmh,e nfut ltlhya-fti nwaonucledd ftuerntdheerr odfeflearys coopnesnu fmorm 6a0t ibouns)iness days could be immediately consummated-even more “chewable” than ISS guidelines would recommend (i.e., no additional 10% special meeting iBnotetrteosmts loinf eC: rAac k1e0r% B tahrrels haonldd iitss tshhea rreighhotl dtehrrse sthoo alpdp froorv Ce raa cskheorr tB-taerrmel .r iWghet sb pelliaenv eth iatt ids enteorts iBn itghlea rbi efsrto min tae rcersetesp oinf gC araccqkueirs iBtiaornre lo fo r1 9it.s9 %sh a(roerh 4o9ld.9er%s )t oth haat vceo uBlidg lpaurit ohnim th ien Bano aervde, na nsdtr othnagte ri tp ioss itni otnh et ob etsatke 3co3ntrol of the Board next year.
CMraancakgeer mBeanrrte lP’sa icde nBtarasle dc oomn pLeonnsagt iToenr mob Vjeacltuivee Cs:reation ARleiwgnar dex peecruftoirvmesa’n icneterests with interests of shareholders CABttrRacLt banasde rseatalainri etsa laendte db oenxuesceust iavrees in line with peers: Boasneu seasla grieense graelnlyer atlalryg ettaerdg eatte d5 0atth 6 p0etrhc epnetricleen otifl ep eoefr pgereoru gproup ISnt r2o0n1g1 p, a7y9-%fo ro-pf eCrfEorOm caonmcep pehnislaotsionp hayn:d 72% of other officer compensation was “at risk” based upon Company performance TOhpee rCatoinmgp Ienncsoamtioen t hCreosmhomldit tpereo vuisdese st haep pforollporwiaitne gB moaertdri cdsi stcor edtieotenr manidn ep crootmecptesn tsaaxt idoend luecvteiblsi:lity IYmeparr-oovveemr-eyneta ri nim RpOroICve m(loentg -itne rImnc oinmceen ftriovme pOlapne)rations (annual incentive plan) Inm FprYov2e0m11e,n t hien CToomtapl aSnhya rpeahiodl danern uRaelt ubronn u(lsoensg t-ote nrmam inedce enxtievceu tpivlaen o)fficers equal to 91% of target, which was 45% of the maximum potential bonus 3M4anagement Incentives Are Aligned with Shareholder Interests
Plan to Collapse Holding Company Will Save Money HCoralcdkinerg BCaorrmelp Oanlyd wCaosu notrriyg iSnatollrye f(oi.rem. eHdo ilnd i1n9g9 C8 otmo poavneyrs)e we iCllB bOe CmSe ragnedd pwoittehn thiael lwy hforl loyt hoewr nbeuds ionpeesrsaetsin agc qcuoimrepdany subsidiary, CBOCS, Inc. WAlhthyo nuogwh ?t hTeh He oplrdeviniogu Cs ocmredpiatn yfa chialsit yo wdnide dn oatn dal loopwer athteids motehregre br,u hsionwesesveesr,, itth en onwew o ncrleyd oitw fnacsi laintyd doopesra, tmesa CkiBngO CthSese cost savings possible RHeoaldliizneg t acxo manpda noyt hfeorr msaavti nngos lofn gaperp rnoexciemssaatreyl,y i$ts2 melimm ipneart iyoena rwill allow us to: FSaimcipliltiaftye tmheo rceo repffoircaiteen ts tcrauschtu mreanagement 3W5e believe merging the two companies is in the best interest of shareholders
3V6. Why We Believe Biglari is Wrong for Cracker Barrel
Why We Believe Biglari Is Wrong for Cracker Barrel SGlaaisnheedd ionpiteiraalt iboonaarld irnevpersetsmenetnat iaotn Satte Sakte ‘ank S‘nh aSkhea –k ef oacnuds ethde onn tloyo okn c sohnotrrot-lt eorvmer time without paying a premium, with most Board members exiting the Board after he joined it Proposed dexucael scsliavses coofm sptoecnks aatti oBni gpllaarni fHoor lhdiimngsse lffor acquisitions – has delayed special meeting twice, and now “on hold” PRreetsuernncse l iotntl eo ucra sBh otaor ds hwaroeuhlodl dcerersate a potential conflict of interest – he is the CEO of a restaurant company that we believe competes with Cracker Barrel 3H7is approach with our board to date has been confrontational and cagey – not constructive to a corporate board
Biglari’s Rhetoric Changes Over Time and Cannot be Relied On OTaldrg Cetountry Store 1O3r-iJguinna-2l 0A1n1n 1o3uDnc:e d“T Ihnet eRnteipoonrsting Persons intend to evaluate their investment in the 2S3h-aSreesp -o2n0 1a1 c:o “n…tinwueo utos lbda Csihs.a”irman Michael Woodhouse that we have purchased stock for investment purposes only.” 170-A-Nuogv-2-200065 1 133DD: :“ T“Thhe eR Repepoortritningg P Peresrosonns sh ianvtee nadcq tuoi reevda ltuhaetier Sthhea rbeuss oinf etshse pIrsossupeer cftosr oinf vthees tImsseunetr., Tahs ew Relelp aosr titnsg p Preesresnotn sa nedv afluutautree tihnetiern itniovnes.t”ment in the Shares on a continual basis. A17c-tAuaulg A-2c0t0io7n 1s 3TDa:k e“nT h/ eR Reseuplotrting Persons acquired the Securities for investment purposes.” 263-AJuung--22001111:: PFeirlseodn sH DSRem taon adceqdu Bireo aurpd tsoe a4t9s .f9o9r% h iomf sCelBf RanLd sPh.a Creosoley 81-Sept--22001111:: LBaournrcohweded P $ro8x3y.2 F migihlltion through subsidiary to up-stream a cash dividend to Biglari Holdings 171-JDuenc--22000076:: FPreiresnodnlsy ’Lsa aunnncohuedn cPesr oaxcyq uFisigithiot n by 1S-uDne Cc-a2p0i0t5al: (PBeHrs ownass B niogtl airniv aoplpvoedin)ted to the Board of Directors A22g-rOeecmt-2e0n0t 9w: iWth eSsterank S‘niz Szlhinak aennounces Merger 71-2M-Aaur-g2-020080:7 :B Pigelrasroin esl eBctiegdla troi ftihrset Breoqaurde sotsf Dboiraercdt osresats for himself and Cooley 8-Apurg--22001008:: CBoimglparain ayp rpeonianmteedd CBEigOlari Holdings 3S8ource: Public filings
PHuorwch Dasiedd Bthigrolaurgi hT:ake Control of Steak ‘n Shake? - WLieosnt eFrnu nSdizzlin - CP.o oCloeyo’lsey -C 2a0ll, 0O0p0t isohnasr:es through Lion Fund B- 5IG61L,A00R0I sHhOarLesD tIhNroGuSg hIN WCe.stern Sizzlin 75-.M8%a rO-2w00n8ership PBriogxlayr iC woinntsest B8-iAgluagr-i2 a0p0p8ointed CEO R8-eAnparm-2e0d1 B0iglari Holdings 6B.i8g%la2ri only controlled 1T7o-dAauyg: -O20w0n7ership of 15.1%3 and CEO BShigalraer iP driicsec:l o$s3e0s9 5.0.80%1 ownership in ownership in Steak ‘n Shake 1N9o-mJuinn-a2t0es0 8himself and Cooley to the Board JBuilg-2la0r0i 8appointed Chairman of the Board 2T2w-Oo cetx-2ec0u0t9ive team members resign SAhnanroeu Pnrciecse M(3e0r-gSeerp w-2i0th1 1W) $es2t9e6rn.3 S9izzlin “Bfoigr lianriv eosrtimgiennatl lpyu crlpaoimseesd” that he had acquired shares TInosoteka dco hnet:rol SBoeucarcme:e PCuhbaliircm fainli nagnsd CEO Merged with Western Sizzlin Renamed Biglari Holdings 21 AStso cpke rp Briicgel aardij’us sStecdh efdour lree v1e3rDse/ Asp fliilti ntog boen c3o-mFepba-r2ab0l1e0 t.o current market price. 39 As per Biglari’s proxy filing on 1-Jul-2011.
ABfitgelra rBi iEgnlatreir sJ…oi n…edE txhies tWinegs tBerona rSdi zMzleimn’b Berosa Lrde a(0v2e-Dec-05) PNaauml eC R. eSscihgonrerd R? oNgearm De .R Seascigkned ? AJolnaens C Yoowrkaret SJteasnsele My L. .H Barorzinemgtaonn, Jr. Tihtoums Was .M G.r eHenoen1tz NasA Pat Vezertzis NAaftmere BRiegslaigrin eJdo i?n eNda tmhee SRteesaikg n‘ned S ?hake Board (07-Mar-08) GFreeodf fRreiys kB Ealdlwotatrid S Wtev. eWn iMlh.e lSmchmidt RJouhtnh WJ. .P Rerysaonn2 CNuArr eWntayne L. Kelley DBirgelcatroi rHoldings Board Today2 SNaarmdaer SCihnacier mRoanle oAf gthe eB •a cDkigreroctuonrd of Western Sizzlin’ B20i0g8la r3i4 Board, CEO since 2005 s•i nDcier e2c0to0r5 of Western Sizzlin’ PVhicilel iCp htahier mBaona rodf &• ACdavpiistoalr ys iDnciree c2t0o0r 0of Biglari C20o0o8l e6y7 Independent • Biglari’s professor Disreticntogru iUshneivde Prsriotyfe,s Psorar sosfel •B Suseirnveesds aAs dam Diinriescttroart iofn KWeensnteertnh S20iz1z0li nIn’ dCepoerpn.dent 66 2007 to 2010 oCno orepaelr eDstiarteec ttorra n•s aHcitsio lnasw practice concentrates M• Canhaagnecmelelonrt ,a nUdn iPvreorfseistyso or fof RInudtehp ePnedresnotn M20i0ch2i gDainr-eFctloinr t65 • Served as President of Board Dofe Dveilroepctmoresn to fS Wtraoterkgfioesrc, eInc. 1S oTuirtcues: GPruebelniec sFeirlvinedg son the WSC Board until the Company merged with SNS. 420 John Ryan served on the Board of BH until his death earlier this year.
BWieg lAarrie’ sN Goot vtheren Oanncley ROenceosr dW ish oP oTohrink …“…altthheoreu gdho eosu nr octu rarpepneta cr htaoi rbme aann yan dde CsiEreO t o[ Bapigplraercii]a etes pooru bsee dr eocpepentinvees sto a ontdh etrra pnospinatrse nocfy v, itehwe oopnp tohsei tbeo haards boef edni rtehcet ocrass eth. aTnh ceu brroeanrtd Shtaesa kn o‘nt bSeheank aec ctihvaeilrym iannv’so lpvoesdi tiino nd…eveloping the vision and strategy of the -bWusaiynnees sL, .b Kute lrlaetyh,e rF hoarsm beere Sn tienafko r‘mn eSdh aakbeo uCt EitO b; e2la2t-eMdlayr.-”2009 ‘“nT hSeh auknea ndiemspoiutse vhoist er e[ltaot itvrealnys fmoromd eSst eoawk n‘ner sShhiapk set ainkteo.” Biglari Holdings] came after Biglari, the board chairman, managed to push out every board member unwilling to give him dictatorial authority over Steak 6-I-nFdeiba-n2a0p1o0lis Business Journal; 4N1ote: Permission to use quotes was neither sought nor obtained
(B$i ginla Mri iSlltioopnpse)d Investing in Growth at Steak’n Shake… FSYte a2k0 ‘0 8n FSYha k2e0 0L9a tFesYt T20w1e0lv Fe YM 2o0n1th1s Capex / Sales Over Time 9Q.11 Q%2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 68.61 % 35.31 % 1.07 % 01.94 % 1.17 % 1.28 % 1.3 % 1.1 % 7L.a5t e%st Twelve Months Capex / Sales 5M.3e d%ian = 3.0 % 23.82 % 3.2 % B1.i8g l%ar i2 C.5r a%ck e2r. 2B %arrel Darden Texas Cheesecake P.F. Chang’s Brinker Ruby Tuesday SHoouldrcien:g sC Rapeisttaalu IrQan ats Rofo 3ad0h-Soeups-e2 F01ac1tory 4N2ote: Red Line denotes when Biglari obtained a Board seat (Apr-2008). Fiscal Year end is September 30
C…oAmnpde nFsoactuiosned P oanck Hagies Ovwenrv Cieowmpensation Biglari ’Hs oplrdoipnogsse dp rcoovmidpeedn shaitmio nw aitth 25% of the gain in book value over the annual hurdle rate of 5% with no cap TIfh tihse i s$ 3i0n0 amddmit iboono kto v hailsu e$ 9in0c0rkea asnedn u1a0l %ba, sBe isgallaarriy would receive ~$4mm BFoigllloawri irnegc eaidvveder s$e1 .s2h amreihlloilodne rp aronrda tIeSdS i nrecsepnotinvsee ,p aByimgleanrit ruenvdiseer dt hhiiss pplraonp foosra tlh ien cfirresats iqnuga rttheer ihtu wrdalse irna tpe ltaoc e6 (%4Q a nodf iFnYst a1l1li)ng an annual cap at $10mm “P…ubolince Rofe atchtei osnweetest compensation arrangements I’ve ever seen at a public company.” “RTihche aprday G iisb tbooon sr,i cThh feo rM soutclhe yl iFttoleo lg;r oMwatyh ”2010 “- TKheen c Surkraernbte csky,s tMeman, aagsi npgro Ppoarstende,r ,i sA rliddeicbualroanu sC bayp iittasle;l fA aungd-,2 0ad1d0itionally, runs contrary to the ethos Mr. Biglari claimed to have when nominating himself for election to the Board of Steak ‘n Shake. s“iTmhep ldye ucinswioinll ibnyg tthoe tBakoea rad sotaf nBd iagglaariin sHt oMldri.n Bgsi g(lBarHi”) to accept such a generous and easily manipulated compensation system, demonstrates they either fail to understand the nuances of the proposal or they are S- oNuFrcI eS: hBaHre hAolndneura Ll eMtteer ttion gB Pigrolaxryi; SMtaatye m20en1t0 4N3ote: Permission to use quotes was neither sought nor obtained
B…igAlnardi ’Ms Daiunatla iCnilnasgs CSotonctrko lP Droepsopsiatel His Minority Ownership UBnigdlearr it hise aptrtoepmopstailn Cg ltaos sc rBea tseh ar edsu a=l 1cl/a5s sE coof nsotomcikc, awnhdi c1h/1 w00o uVldo teinnagb Rlei ghhimts to consolidate voting rights in BH to himself Cloauslsd Ben shtaonccke whoisu lvdo tbien gh icso cnutroreln acnyd f orer dfuuctue rve oatciqnugi spiotiwoenrs of future shareholders of Biglari Holdings 4B4ut given shareholder challenges to these proposals, these actions are “on hold”
We Believe Sardar Biglari Has a Business Conflict We sceoemk pteot ea twtriatcht mresatnayu rraenst aturraafnfitc caownacyep ftrsom these other restaurant concepts WCrea cbkeelri eBvea rwrehl’ast bBoiagrlda rpir oledaurncts rfergoumla orluyr cboonasrdid ceorsu lpdr ibcien agp, pplrioedu actt Santeda km’ne nSuh dakeveelopment, promotions, advertising, store locations, growth and expansion, and strategic plans 4W5e believe Biglari’s proposed board service also raises antitrust concerns under the Clayton Act
SWtea Bk’enl iSevhea kCer aacrek eCr oBmarpretli taonrds BFurella kSfearsvtice, Family Dining Format DLuinnncehr GSiemogilraarp hMiceanlu O Ivteemrlasp Almcoehrioclainca B Bervaenrdages MAvider a–g He iCghhe Sckingle Digits 4M6id – High Single Digits
OIllluds Ctraotuivnetr yM Sentour eItem Similarities MSkoimllemt aB’sre Pakafnacsatk1es VCehgicektaebnl’en Salad CNAEWKE CSO ‘NU NETGRGYS sBkirlelaektfast SGoRuIrLceL:E CDr aCckHeIrC BKaErrNel Saraclhaidve and Steak’s Shake wbsite 4N7ot currently offered.
Whaict hB Bigilgalrair iS Daiod YBoefuo rBeelieve? “BSetfeoarke nC rSahckakere Bofafrerresl irtasi speadt rcoonnsf lfiucltl -osfe rivnitceere dsti:ning with counter and dining room seating, as well as drive-thru and carry-out service.” – Biglari Holdings Form 10-K for the fiscal year ended September 29, 2010 B(eemfoprhea lsaius nacdhdiendg) proxy fight: SIno uArpceri:l Sacnhde dMualey IoI fo 2f 0B11ig, lBarig Hlaoril dHinoglsd’i nDgesf isnoiltdiv oe vPero 9x9y% of the almost $10 million Cracker Barrel share position it had accumulated since February. BSteaftoerme elanut nocnh iSncgh pedrouxley 1f4igAh,t :filed on November 9, 2011 LBairgrlya rHi yparottm oinse Jsu hlye w13o,u 2ld0 1s1upport Mike Woodhouse as Chairman if Biglari and Cooley are appointed to the Board without a proxy fight – Telephone conversation between Sardar Biglari, Mike Woodhouse and “BWefeo raer el acuonncthroinl gi npvreosxtyo rfsi g…ht”: — Biglari Holdings’ 2010 Letter from the Chairman (emphasis added) WBihgalta rBi iHgolalrdii nSgasy sf iNleos wfor regulatory approval in August 2011 to acquire up to 49.99% of CBRL shares “ASftear kC nra Sckheark Be aisrr eal nreaaisrleyd 5c0o0n fulincitt offa sitn-tfeoroedst :chain that primarily sells burgers and shakes.” – Letter from Sardar Biglari to CBRL shareholders, November 14, 2011 (emphasis added) “AI fhtearv lea umnacdhei nag cpormoxmyi tfmigehntt: to own Cracler Barrel stock for the long term…” – Letter from Sardar Biglari to CBRL shareholders, November 14, 2011 (emphasis added) “AWfte rb lealuienvceh itnhge pBroaxryd ’fsi gdhetc:ision [to appoint Mr. AWfoteord lhaouunsceh iansg E pxreocxuyti vfieg hCth: airman] is simply bad governance and bad business.” – Letter from Sardar Biglari to CBRL shareholders, November 14, 2011 “NIna mtueraeltliyn,g sI ,w woeu ltdo lsde eCkh aadirdmitaionn Mal ibchoaaerdl Wseoatosd ihfo tuhsee [tbhoaatr dw]e m heamveb perusr cshtoasneedw satlol cikd efaosr oinr vtaekstem aecntito pnus rtphoaste asr eo ncloyu.n” t—er tPo rsehssa rreehloealdsee ri sinsuteerde sbtsy” B—ig lLaerit tHero flrdoimng Ss,a rSdeapr tBemigblearr i2 t3o, C20B1R1L ( esmhaprheahsoilsd aedrsd,e Nd)ovember 14, 428011 (emphasis added)
Biglari’s Curious Choice of Benchmarks BInu ht itsh eNreo vies mnob esri n1g4l ele “ttSe&r, PB iRgelasrtia ucroamntp Ianredse xC”r a-tchkee ri nBdaerxre hl’es utosetos ails sthhaer eSh&olPd e5r 0r0et uRrens taou trhane t“ iSn&dePx Restaurant Index” Thies Sp&eePr s5e0t 0i sR celsetaarulyra nto tI nadne xap cpormopprriiastes c onmlyp afriivseo nc ogmivpeann itehsa:t Mallc D5 ocnoamldp’asn Sietsa rabrue clkasrg, eY cUaMp a! nBdr a4n odus,t Dofa r5d eanre, ganlodb Calh qipuoictkle service TBhige lSar&i cPu r6i0o0u sRlye scthaousrea nnto Itn tdoe xu sien ctlhued eSs& 1P6 6sm00a lRl-ecsatpa urerasntatu irnadnet xcompanies, including Cracker Barrel and Biglari Holdings CWuhmy udliadt iBvei gTloartia lu Sseh athreeh Sol&dePr 5R0e0tu Rrnestaurant index instead of the S&P 600 Restaurant index? C1 rYacekaer r3 B Yaerraerl (51 9Y.e7a)r% 7 6Y3e.5ar% 1 01 0Y.2e a%r 26.7% 111.0% S&P 6500 Restaurant Index( 42.24.)9% % 3 07.02.%3%(7 .160)3%.5 1 %1. 72%02 9.90 .%1% 333.7% 6C0B0R RLe sOtauutrpaenrtf oIrnmdeaxnce vs S&P(15.3)% 33.2% 17.8 % 15.1% 20.9% 4S9ource: S&P Research Insight as of 30-Sep-2011
5B0iglari Slashed Capital Expenditures, But Paid to Put His Picture in Every Restaurant
FKreoym M Cersascakgeer Barrel’s Board •W We eb ealriee vae sStraorndgar cBomigplaarniy i sa nwdr oan lge afdoerr oiunr tshhea irnehdoulsdtreyrs • OWuer hcauvrree ndte lbivoearredd ist raoctnigv erleys uilntvs oolvedr taimt Ce,r aacnkde rh Bavaer rtehl ea nstdr actoegnyti ntou ocuosnltyi nsuee ktso tdor icvre aptee rvfoarlmueance • We believe Biglari sis p dlaeydbicoaotekd o tfo c Breiegplianrgi –c onnottr othl ea nbde spto ionrt ecroersptso roaft ea lglo Cverarnckanerc eB warirlell hsahramre hCorladcekresr Barrel and its shareholders 5V1ote the WHITE Proxy Card