Cracker Barrel Old Country Store, Inc. · NASDAQ:CBRL
Cracker Barrel Old Country Store — Proxy Contest (December 2011)
49 slides from Cracker Barrel Old Country Store's proxy contest presentation, Dec 7, 2011
Slide 1: Schedule 14A Definitive Additional Materials
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 14A Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 (Amendment No. ) Filed by the Registrant x Filed by a party other than the Registrant ¨ Check the appropriate box: ¨ Preliminary Proxy
Slide 2: Schedule 14A filing fee information
(4) Proposed maximum aggregate value of transaction: (5) Total fee paid: ¨ Fee paid previously with preliminary materials. ¨ Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the p
Slide 3: Presentation used in investor meetings from December 7, 2011
Cracker Barrel Old Country Store, Inc. (the “Company”) used the following presentation in meetings with investors beginning on December 7, 2011.
Slide 4: Shareholder Outreach Presentation, December 2011
December 2011 CBRL Final Shareholder Outreach Presentation FINAL_12.6.2011.pdf
Slide 5: Additional information and forward-looking statements
Additional matters materially More 1995. The Important Cracker considered and ENCOURAGED ENTIRETY direct supplements Investor CBRLExchange legal detailed or Final discussed Barrel Barrel, Relations indirect issue additional from Information atWHEN Shareholder toCracker information Commission Old of
Slide 6: Agenda
I. Overview Agenda II. CBRLCracker FinalBarrel’s Shareholder TrackOutreach Record ofPresentation Success III.FINAL_12.6.2011.pdf Ongoing Transformation 3 of the Company IV. Why We Believe Biglari is Wrong for Cracker Barrel V. Other Proxy Matters
Slide 7: I. Overview
I. Overview CBRL Final Shareholder Outreach Presentation FINAL_12.6.2011.pdf 4
Slide 8: Key Facts
KeyCEO Cracker Stock Continues Sardar As Has significantly apreviously engaged raised what Facts strategy history has Biglari Barrel ofwe outperformed to ideas a Consider strive in restaurant believe ofinused what “extraordinary” for place renewed for Cracker proxy to weoperational for be company th
Slide 9: Gaining Momentum
Gaining •November, for $45. “The Thanksgiving sustained “…comps maintaining valuation…” Source: CBRL We Since 1st Full-year “Much that Impressively, Quarter believe company Final becoming to Company Momentum better-than-expected”1 sales continue. have guidance most our Shareholder recent EPS Jeff Da
Slide 10: Stock performance since strategic priorities announced
Stock 22-Nov: 130% same 12-13-Sep: 120% 12.3% 1-Nov: 8% priorities 9-Sep-2011 90% Daily Source: Note: the CBRLBox, store from S&P Price quarter Shares Final Price CBRL Bloomberg CBRL O’Charley’s, and sales 600 09-Sep-2011 Sandy Performance 23-Sep-2011 Shareholder 110% why results Have files Restaura
Slide 11: Biglari suggestions are not appropriate
•We – CBRL Biglari The We Ultimately, Believe believe have couple invest operate cost Final argues has of devoted our Biglari’s in Shareholder sensible also we capital with the investment that will suggested Company attractive awe in significant Suggestions store operate the should Outreach growth p
Slide 12: Six strategic priorities remain the focus
•…And years – the CBRL We While While system are continue but Final We we international focused must Have remain Shareholder to prioritize evaluate aonFocused open the expansion six to key Outreach additional new strategic Plan focus ideas, and But areas Presentation avenues licensing priorities Rem
Slide 13: We listen to shareholders: new directors added
We’re New Added We However, CBRL listen CEO Open Final 4 new to based appointed our to Shareholder directors New shareholders on his Ideas intrack toSeptember Outreach the From record, board Any Presentation in potential Source the pastconflict 6 FINAL_12.6.2011.pdf monthsof interest and his10intera
Slide 14: Experienced Board of Directors
Experienced Board Michael the Sandra after Robert James of NEW Richard Charles founding B.F. William 2001 restaurants consulting Coleman Officer May Note: CBRL United Company (Jack) serving 2001 through Two (NASDAQ: Industries W. of Final V. B. from E. J. W. A. Directors H. Corporate Bradford Dale,
Slide 15: Timeline of Biglari interactions with the Board
Cracker 23-Jun-2011 13-Jun-2011 Company in March 23-March-2011 17-June-2011 Committee Peterson CBRL San Antonio Final June Barrel Bradford offers Named July Shareholder 26-Aug-2011 21-Jul-2011 27-July-2011 Proceeds 1-Aug-2011 Biglari August McCarten CEO1-Sep-2011 September With Effective Outreach 1-
Slide 16: Cracker Barrel made good faith settlement offer
Cracker Letter “…in “Under Biglari “When —Michael CBRL an to Final Holdings we that Barrel Sardar effort spoke Woodhouse offer, Shareholder to Made Biglari, and on be weAugust constructive, approved awould Good 22-Aug-2011: Outreach 10, immediately Faith by 2011, the the Presentation Settlement Boar
Slide 17: II. Cracker Barrel's Track Record of Success
II. Cracker CBRL FinalBarrel’s Shareholder History Outreach of Success Presentation FINAL_12.6.2011.pdf 14
Slide 18: History, Heritage and Success
History, 30 Management Pleasing Nov Cracker one Logan’s 1981 Note: CBRL Years of 1981 AIndexed Restaurant Final 30 Barrel Heritage Roadhouse People® Delivering 1990 Year Shareholder and Performance Ranked Aug Record & the & Creating Success the Superior America’s 2000 Board #1 of award Outreach Succ
Slide 19: The Cracker Barrel concept
•The CBRL Welcome Owns Pleasing Honest Good Old-fashioned Cracker Final country and value People®—genuine break operates Shareholder Barrel cookin’ country forConcept 608 travelers store Old Outreach Country hospitality Presentation Stores across FINAL_12.6.2011.pdf 42 states 16
Slide 20: Menu evolution to maintain relevance
Menu Has Traditional Sunrise Fancy Chicken CBRL Fixin’s Final Sampler n’Evolved Dumplins Menu Shareholder SixWholesome Offers Grain to Chicken Maintain n’ New Outreach Meatloaf Mornin’ Menu n’Relevance Country Presentation Dinner Offerings Sampler Dinner and Granola “Home-Style” Reach FINAL_12.6.201
Slide 21: Retail is integral to the guest experience
•Retail CBRL GuestisFinal Rockers Gifts Regional Cracker Exclusive for waiting Integral Barrel on under products music Shareholder thearea branded $20 front to theporch Cracker Outreach foods Barrel Presentation Experience FINAL_12.6.2011.pdf 18
Slide 22: Winning awards and rankings
Winning #1 -Nation’s Picks Top Ranked —Restaurants -Most Best —Packaged Gold —NTA CBRL The Zagat Consumer Family of Breakfast National Award RV-Friendly Good 2011 Final the sTour asConcept 2010 Restaurant Dining Full-Service the National Sam Brand Travel –Shareholder Operators Restaurant Courier Top
Slide 23: Cracker Barrel has outperformed over long term
Powerful Last 140% 220% 190% 14.4% Price 160% (4.2)% 20% 70% 40% 9.2% 100% Daily Cracker Source: Note: Restaurants, Burgers, CBRL 540% 64.9% from Selected 250% 120% 88.5% Years Final Bloomberg Barrel Ruby Concept 01-Dec-2006 Shareholder (11.0)%Price Biglari Last 100% Tuesday, Restaurant Selected 10
Slide 24: Five-year total shareholder return exceeds peers
…And 6.2 4.3 0.5 (0.0)% Peer Cracker (22.6)% (2.6)% (2.2)% Source: dividends CBRL%Median: Final Five-Year (0.2)% S&P Barrel andShareholder Research (0.2)% the Biglari Total compounding Holdings Insight, Shareholder Outreach 30-Nov-2011. effect Brinker Presentation Return ofCheesecake dividends Excee
Slide 25: Biglari's curious choice of benchmarks
Biglari’s •Cracker Cumulative 1 114.4 (5.3)% 600 Source: CBRL This The Why In But Biglari Year his Restaurant there S&P % peer did 3Final Outperformance 48.8 November S&P Barrel Year (2.5)% curiously Curious Biglari 500 600 is set Total %Shareholder Research no 5is 26.2 and Restaurant Index Year 10.
Slide 26: Same store sales outperform casual dining index
Our Same Cumulative Base 100.7 100.0 FY06 91.1 Cracker Note: CBRL Year Knapp-Track™ 101.2 100.3 FY07 Final Barrel Store Comparable 100.5 FY08 Shareholder Knapp-Track™ Sales 99.5 FY09Casual Growth Same FY10 Outreach Dining Outperforms Store FY11 Casual Presentation Sales Index Dining Index, same Knap
Slide 27: Higher return on invested capital than peers
We % Estimated 16.0 15.3 14.8 12.7 12.2 8.6 5.8 Cracker Source: Note: Value CBRLHave %ROIC of Final 15.2 Capital Barrel Total Achieved Latest % calculated Shareholder Equity. Biglari IQTwelve and a More Debt Holdings as latest Months Outreach NOPAT Attractive figures available Brinker ROIC over Pres
Slide 28: III. Ongoing Transformation of the Company
III. Ongoing CBRL Final Shareholder Transformation Outreach of the Presentation Company FINAL_12.6.2011.pdf 25
Slide 29: Strategic initiatives: marketing, value and guest experience
1 Promotional Messaging Reinforce •2 New Increase Everyday Enhanced 3 Operating Sustainably CBRL Marketing Newly-redesigned New Increase • Advertising Refined Restaurant Marketing offerings advertising Strategic Final Variety Affordability Authentic Menu guest • Refinement Increased Improve spend Sh
Slide 30: Strategic initiatives: retail, cost, capital allocation
4 Investments Retail Growth With Focused 5 Reduction Offset •Pressure Balanced Approach 6 Shareholder CBRL Emphasize New Tactics • Steady Controlling the Sales Commodity system Strategic Final •Cost •Brand Driving Highlight accretive to $10mm return maintenance line Value Shareholder unique 10-20bps
Slide 31: What analysts are saying
What Analyst “Good “We FY2012… through 29-Nov-2011 “New Company’s —Bryan 13-Sep-2011 “In Biglari -Robert Source: CBRLtimes are Analysts CEO Final start has Derrington, Publicly Q1 Commentary particularly Elliot, past We the critics Sandra and to Shareholder 15-Sep-2011 7-Nov-2011 [Biglari FY2012” Ar
Slide 32: IV. Why We Believe Biglari is Wrong for Cracker Barrel
IV. Why CBRL Final We Shareholder Believe Biglari Outreach is Wrong Presentation for Cracker FINAL_12.6.2011.pdf Barrel 29
Slide 33: Why Biglari is wrong for Cracker Barrel
Why our Gained Slashed Proposed Returns Presence with CBRL We Final initial operational little board Believe on excessive dualour Shareholder cash board class toBoard Biglari date tocompensation investment of representation shareholders has stock would Is Outreach been Wrong atcreate Biglari at conf
Slide 34: Biglari's actions versus stated intentions over time
Biglari’s Target Filed Woodhouse Reporting Oct-2009: •to Source: CBRL 13-Jun-2011 23-Sep-2011: 8-Sept-2011: 7-Aug-2006 10-Nov-2005 17-Aug-2007 8-Aug-2008: 8-Apr-2010: the HSR Board Original Final Public Rhetoric Persons Western tothat Shareholder ofacquire 13D: Company 13D: Biglari Borrowed filings
Slide 35: How Biglari Holdings took control of Steak n Shake
How BIGLARI 7-Mar-2008 through: Call -Fund Steak Nominates Source: 1 3 CBRL Western Lion P. Cooley’s 20,000 561,000 As Stock Cooley Options: per Did Share ‘n Fund Final price Public Shake shares Biglari’s Proxy Biglari Sizzlin shares HOLDINGS wife Instead 15.1%3 Price: 6.8%2 8-Aug-2008 Shareholder a
Slide 36: Biglari nominees and board turnover
Biglari …Existing Sardar Stanley of ctor Thomas •lin’ trates After (07-Mar-08) Name Wilhelm Geoffrey John Ruth Source: 1 2 CBRL Director Biglari’s Served His Titus 2010 John Biglari Corp. University, W. J. law Biglari on Resigned Final Chairman Ryan 66 Greene Enters… Person L. Public M. Ryan2 as rea
Slide 37: Poor governance record at Steak n Shake
We Are “…there …although strategy -Wayne “The over -Indianapolis Journal; Note: CBRL Steak unanimous Permission Final Not L. of 6-Feb-2010 does Kelley, the ‘n our the Shareholder Business Shake not business, current Only vote to appear Former use despite Ones [to chairman quotes but Outreach to tran
Slide 38: Steak n Shake sales and capex under Biglari
($ in%Millions) 9.1 8.1 Steak Sales 1.7 7.5 Median 6.1 3.7 3.2 Latest Capex Biglari Source: Note: CBRL Over ‘n Red 1.7 3.1 Twelve /Final Stopped Cracker Capital = Sales Shake % 3.1 Line Time Shareholder 1.8 % 2.2 Months FY 6.6 denotes Barrel IQ Investing % 3.3 %2008 as % 1.2 1.8 %of Latest 3.0 Darde
Slide 39: Biglari's proposed compensation package
…And Compensation Biglari of increased – “The •manipulated the Biglari” FY Source: Note: CBRL Biglari’s Following Biglari This Ifthe Board first 11) the current Permission gain is Final Focused Holdings —NFI $300mm BH quarter received in10%, of proposed in addition Annual adverse Shareholder compens
Slide 40: Dual class stock proposal
…And Biglari’s •Could CBRL Biglari But given enhance Final Maintaining is Dual attempting shareholder Shareholder Class his voting Control Stock tochallenges create Outreach control Proposal Despite a dual and Presentation toHis these reduce class Minority proposals, ofvoting stock, FINAL_12.6.2011.
Slide 41: Biglari's business conflict of interest
•We CBRL We Cracker Believe compete seek believe Final Barrel’s toSardar Shareholder attract what Biglari’s withboard Biglari Biglari many restaurant proposed regularly Outreach restaurant learns Hastraffic aboard from Business considers Presentation concepts away our service board Conflict from pri
Slide 42: Cracker Barrel and Steak n Shake are competitors
We Believe Full Americana CBRL Service, FinalBrand Cracker Shareholder Family ??????Alcoholic Barrel Dining Outreach and Format Steak Presentation Beverages ??????Breakfast ‘n Shake??????Mid are FINAL_12.6.2011.pdf Competitors ??????Lunch – High Single ??????Dinner 39 Mid – High ??????Similar Single
Slide 43: Illustrative menu item similarities
Illustrative Skillet Momma’s Chicken Source: CBRL Final Breakfast1 Cracker ‘nPancakes Menu Vegetable Shareholder Barrel ItemSalad Similarities archive Outreach andPresentation Steak ‘n Shake FINAL_12.6.2011.pdf website 1 Not currently 40 offered.
Slide 44: What Biglari said before the proxy fight
Which What chain 10-K In 99% (emphasis simply •shareholders, “We Letter Biglari 2011 from CBRL Before April are of Sardar to for Biglari with from Final Biglari bad promises Holdings the acquire and control Cracker launching the added) counter almost Board the Biglari May Shareholder fiscal Said Nov
Slide 45: Biglari slashed capital expenditures at Steak n Shake
Biglari Final CBRL Slashed Shareholder Capital Expenditures, Outreach Presentation But Paid toFINAL_12.6.2011.pdf Put His Picture in Every 42 Restaurant
Slide 46: V. Other Proxy Matters
V. Other CBRL Final Proxy Shareholder Matters Outreach Presentation FINAL_12.6.2011.pdf 43
Slide 47: Shareholder-friendly adopted rights plan
Shareholder-Friendly Adopted – Biglari’s “In are “We CBRL Rights If control fulfilling shareholders Final plan expire Argument in investors…” response Shareholder that would is iffocused approve, objective, shareholders that not toRights Biglari the on be Outreach rights triggered creeping Rights we
Slide 48: Management compensation aligned with shareholders
•– The Management CBRL Cracker CBRL Strong Operating In Align Attract Achievement Year-over-year Reward Base Bonuses In Improvement FY2011, 2011, Compensation Final salaries executives’ base pay-for-performance and Barrel’s performance 79% generally Income Shareholder retain the salaries Paid Incent
Slide 49: Key message: vote WHITE proxy card
Key •We Vote CBRL We Our believe Message the are have believe current Final WHITE a delivered strong Sardar Shareholder Biglari Biglari’s board From Proxy company Biglari is Cracker strong isactively playbook dedicated Card Outreach isand results Barrel’s wrong involved aofto leader over creeping Pr
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