DEFA14A

 

 

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.    )

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Cracker Barrel Old Country Store, Inc.
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Cracker Barrel Old Country Store, Inc. (the “Company”) used the following investor presentation in meetings with investors beginning on October 16, 2012. This investor presentation was also posted to the “Proxy Contest” section of the Company’s Investor Relations website, investor.crakerbarrel.com.

On
the
Right
Track,
Generating
Exceptional
Performance
Fall 2012
THIS
BOARD
FOR
IS
W
HY
W
E
B
ELIEVE
S
ARDAR
B
IGLARI    
W
RONG

1
IMPORTANT ADDITIONAL INFORMATION
Cracker Barrel Old Country Store, Inc. (“the Company”) urges caution in considering current trends and earnings guidance disclosed in
this presentation.  Except for specific historical information, matters discussed in this presentation are forward looking statements that
involve risks, uncertainties and other factors that may cause actual results and performance of the Company to differ materially from
those expressed or implied in this discussion. All forward-looking information is provided pursuant to the safe harbor established
under the Private Securities Litigation Reform Act of 1995.
More detailed information on risks, uncertainties, and other factors is provided in the Company’s filings with the Securities and
Exchange Commission, press releases and other communications. 
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 2012 Annual Meeting. On October 4,
2012, 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.

Table of Contents
2
I.
Executive Summary
II.
Delivering on our Six Priorities
III.
Driving Best-in-Class Results
IV.
Why We Believe Sardar Biglari is Wrong for This Board
Appendix

I. Executive Summary

4
Improve same store sales
and traffic trends
Accelerating same store sales
growth in last three quarters with Q4
traffic up 1.4%
Cut costs and leverage fixed
costs to enhance profitability
FY 2012 operating margin growth of
50 bps
Reconfigure the Board with
new members bringing a
fresh perspective
7
new
board
members
,
including
a
new
independent
Chairman
Fill in key management
positions to enhance
functional capabilities
Revitalized
leadership
–
five
senior
executives new to Cracker Barrel or
serving in new positions since
January 2011
Develop a long-term plan to
maintain operating
momentum
Same store sales outperforming
casual dining peers in Knapp-
Track
for
three
consecutive
quarters
WHAT WE HAVE ACCOMPLISHED IN THE PAST YEAR
Delivering on the Company’s Promises
(1)
Changes to board since 20-Jun-2011.
(2)
As announced on 6-Aug-2012, to be effective following Michael A. Woodhouse’s retirement in early November 2012.
1
2
™

5
CBRL STOCK PRICE HAS INCREASED SIGNIFICANTLY
Since Announcement of Our Strategic Priorities We Have Delivered
Outstanding Shareholder Returns
Source:  Bloomberg, public filings, Company press releases, and IBES
Note: 12-Sep-2011; is closing price the day prior to announcement of Strategic Priorities on 13-Sep-2011.  Please see Appendix for reconciliation of
GAAP basis operating results to adjusted non-GAAP operating results.
(1)  Figure used for comparability to IBES estimates is GAAP basis, earnings per diluted share of $1.47. When adjusted for the impact of the extra week
in FY’
12 and certain charges in the current and prior year, adjusted earnings per diluted share were $1.20.
$30
$40
$50
$60
$70
Sep-2011
Nov-2011
Jan-2012
Mar-2012
May-2012
Jul-2012
Sep-2012
Daily from 12-Sep-2011 to 28-Sep-2012
$39.86
$67.11
26-Apr-2012
CBRL hosts Analyst and
Investor Day reviewing
strategic initiatives
21-Feb-2012
CBRL reports 2Q12 EPS of
$1.20 excl. proxy costs, 5.3%
higher than analyst expectations
13-Sep-2011
New CEO Sandy
Cochran announces
strategic priorities
22-Nov-2011
CBRL reports 1Q12 EPS
of $1.09 excl. proxy costs,
4.8% higher than analyst
expectations
20-Dec-2011
A majority of
shareholders vote for
CBRL's slate of directors
22-May-2012
CBRL reports 3Q12 EPS of
$0.86 excl. proxy costs, 16.2%
higher than analyst
expectations
19-Sep-2012
CBRL reports 4Q12 EPS
1
of $1.47, 13.1% higher
than analyst expectations
68.4% INCREASE

6
Since December 2011 Proxy Vote
2
Since Announcement of Our Strategic Priorities
1
CBRL HAS SIGNIFICANTLY OUTPERFORMED ITS PEERS
No Matter What Benchmark You Use, CBRL Has Outperformed
Source:  Bloomberg
Note:
Peer
set
includes
BH,
BOBE,
EAT,
CAKE,
DRI,
DENN,
RT,
TXRH.
S&P
Restaurant
Index
includes
the
restaurant
companies
in
the
S&P
500
Index:
CMG,
DRI,
MCD,
Cracker Barrel
Peer Set
S&P 500 Restaurant Index
S&P 600 Restaurant Index
S&P 1500 Restaurant Index
S&P 500 Index
90%
100%
110%
120%
130%
140%
150%
160%
170%
Daily from 12-Sep-2011 to 28-Sep-2012
68.4%
35.1%
34.8%
24.0%
17.8%
15.4%
Sep-2011
Dec-2011
Mar-2012
Jun-2012
Sep-2012
90%
100%
110%
120%
130%
140%
Daily from 20-Dec-2011 to 28-Sep-2012
36.4%
25.8%
21.9%
16.1%
3.1%
1.0%
Sep-2012
Jul-2012
Apr-2012
Feb-2012
Dec-2011
SBUX, YUM.  S&P 600 Restaurant Index includes the restaurant companies in the S&P 600 Index:  BJRI, BH, BWLD, CEC, CBRL, DIN, JACK, PZZA, PEET, RRGB, RT,
RUTH, SONC, TXRH.  S&P 1,500 Restaurant Index includes the restaurant companies in the S&P 1,500 Index:  BJRI, BH, BOBE, EAT, BWLD, CEC, CAKE, CMG, CBRL,
DRI, DIN, JACK, MCD, PNRA, PZZA, PEET, RRGB, RT, RUTH, SONC, SBUX, TXRH, WEN, YUM.
(1)
12-Sep-2011; is closing price the day prior to announcement of Strategic Priorities on 13-Sep-2011.
(2)
20-Dec-2011; date of CBRL’s 2011 Annual General Meeting, proxies voted.

7
OUR SHAREHOLDERS HAVE BENEFITED FROM OUR
PERFORMANCE AND RETURN OF CAPITAL POLICIES
($ in millions)
Source:  Public filings and Bloomberg
Note: 12-Sep-2011; is closing price the day prior to announcement of Strategic Priorities on 13-Sep-2011.
$ 663.5
$22.4
$915.8
$14.9
$1,616.6
CBRL Equity
Market Cap.
Total
Shareholder
Value
12-Sep-2011
Increase in
CBRL Equity
Market Cap.
28-Sep-2012
Increase in
CBRL Equity
Market Cap.
= $700.7
FY 2012
Dividends Paid
FY 2012
Shares Repurchased
28-Sep-2012

8
WE BELIEVE THIS VALUE CREATION RESULTS FROM
SUCCESSFUL EXECUTION OF OUR STRATEGIC PRIORITIES
Source:  Public filings
Note:  Announcement of Strategic Priorities on 13-Sep-2011.
Q4 2011
Q1 2012
Q2 2012
Q3 2012
Q4 2012
Comparable Restaurant
Traffic
(4.2)%
(3.8)%
1.1 %
0.6 %
1.4 %
Average Check
2.8 %
2.2 %
2.4 %
2.5 %
2.4 %
Comparable Restaurant
Sales
(1.4)%
(1.6)%
3.5 %
3.1 %
3.8 %
Comparable Retail Sales
(0.7) %
(1.3)%
3.4 %
0.3 %
3.1%
Our Customers Have Responded to Focus on Menu, Marketing, and Execution
Announcement
of Our Strategic
Priorities

9
WHY WE ARE HERE…AGAIN
Despite losing by a significant margin in last year's proxy fight, Sardar Biglari remains
inexplicably insistent in his campaign against Cracker Barrel.  Why do we say
“inexplicably?”
Because of all we accomplished over the past year
What would Biglari have done differently?
–
We don’t know –
he hasn’t raised specific new ideas or suggestions to
management
or
the
Board,
despite
having
many
opportunities
to
do
so
We
believe
Sardar
Biglari
has
a
conflict
of
interest,
a
history
of
“creeping
control”
that
is not in the best interest of shareholders, and a questionable track record on
corporate governance
Despite being offered two independent seats (for the second year), he turned the
offer down
–
Biglari refuses to consider any settlement offer unless he is personally appointed to
the Board
–
Our shareholders determined he was not right for the Board last year
•
We agreed and believe he is not right for the Board this year either
This discussion should be about the business and who’s got it on the right path

II. Delivering on our Six Priorities

11
New marketing messaging
Reinforce Authentic Value
Refined menu and pricing
Increase Variety & Everyday Affordability
Enhanced restaurant operating
platform
Sustainably Improve the Guest
Experience
Innovative tactics driving retail
sales growth
Deliver Value & Connection With the
Brand
Focused cost reduction
Offset Commodity Pressures and Other
Costs
Balanced approach to capital
allocation
Enhance Shareholder Value
WHAT WE TOLD YOU WE’D DO 12 MONTHS AGO
1
2
3
4
5
6
Key Priorities
Objectives

12
“Hand Crafted by Cracker Barrel”
NEW MARKETING MESSAGE
Source:  Public filings
1
Launched
national
cable
advertising
for
the
first
time,
focusing
on
brand building during the busiest seasons (Q2 & Q4)
Utilized radio advertising to promote products and value
Leveraged billboards to support travel business
Hired new advertising agency Havas Worldwide (formerly known as
Euro RSCG Worldwide)
Continued Investment in Billboards
First National Television Campaign
Comparable Restaurant Traffic

13
Guest
Satisfaction
Results
Show
Overall
Value
Scores
at
Historic
Highs
REFINE MENU AND PRICING 
Launched salad refresh as part of the
summer seasonal promotion
–
Feature salad, including dressing
and crackers, under 600 calories
–
Exceeded expectations for mix and
guest satisfaction
2
Highlighted an attractive $5.99 price point
Drove week-day lunch traffic
Reinforced value perception across all day-parts
Better-
For-You
Daily
Lunch
Specials

14
(1)  Source:  Nation's Restaurant News  and  WD Partners, 2012 Consumer Picks family dining  segment survey.
(2)  Weighted by attribute importance.
(3)  100-149 responses.
3
During the year, received all-time company high scores in nine categories on the guest feedback
program
For the second year in a row we have received top honors in the family dining segment of the Consumer
Picks
survey
conducted
for
Nation’s
Restaurant
News
magazine
Past Year’s Focus on Guest Experience Has Driven Significant Improvements to Guest Satisfaction
Overall Satisfaction
Intent to Recommend
Overall Value
July-2011
July-2012
70.0%
71.0%
July-2011
July-2012
59.1%
61.1%
July-2011
July-2012
69.7%
70.6%
ENHANCE RESTAURANT OPERATING PLATFORM
Rank
1
Chain
Score
2
Cracker Barrel Restaurant and Old Country Store
70.3%
2
MarieCallender's
3
62.1
3
Bob Evans Restaurants
61.2
4
The
OriginalPancake
House
3
59.7
5
IHOP
53.5
6
Steak ‘N Shake
52.1
7
Village Inn
51.9
8
Perkins Restaurant & Bakery
51.5
9
Big Boy
50.2
10
Friendly’s Ice Cream
47.5
11
Shoney’s
45.5
12
Huddle
House
3
44.8
13
Denny’s
43.9
14
Waffle House
41.4
1

INNOVATIVE TACTICS DRIVING RETAIL SALES GROWTH
Game Plan for Growing Retail Sales…
Source:  Public filings
Quarterly Retail Same Store Sales
4
Merchandising
Strategy
Be a destination retailer
for specific occasions
and drive traffic for the
restaurant
Unique
Nostalgic
Seasonal
Everyday Needs
April-2012:  Appointed new SVP of
Retail, Laura Daily
Support the restaurant
by reinforcing the
emotional connection to
the Brand
(0.7)%
(1.3)%
3.4%
0.3%
3.1%
Q4 2011
Q1 2012
Q2 2012
Q3 2012
Q4 2012
15

FOCUSED COST REDUCTION
Source:  Public filings
(1)  Adjusted for 53
rd
week in
FY’12,
proxy
contest
expenses,
severance
and
restructuring
charges.
Please
see
Appendix
for
reconciliation
of
GAAP
basis operating results to adjusted non-GAAP operating results.
5
Improving Productivity of the Box
Eliminating Annual G&A and Labor Expenses
April-2012: Realigned field leadership
July-2011: Restructured home office
Labor Management System
Improves direction of weekly training, productivity,
and execution
Hourly wage expense down 50bps in Q4 2012
Transportation Management System
Improves efficiency in the distribution of retail
merchandise
Improved
Technology
Streamlined
Supply    
Chain and
Purchasing
Increasing
Labor
Productivity
Enhanced
Operating
Systems
Leveraging Our Support Cost Base
16
Adjusted EPS
1
& Operating Inc as % of Sales
Margin and Process Improvement

17
BALANCED APPROACH TO CAPITAL ALLOCATION
Dividend Yield
Dividend Payout Ratio
2.1 %
3.0 %
3.6 %
2.8 %
2.3 %
2.1 %
1.3 %
0.0 %
0.0 %
0.0 %
CBRL -
One
Year Ago
CBRL
DRI
BOBE
EAT
TXRH
CAKE
BH
DENN
RT
Peer Median:  1.7%
20.5 %
46.1 %
54.6 %
45.6 %
40.8 %
38.3 %
27.6 %
0.0 %
0.0 %
0.0 %
CBRL -
One
Year Ago
CBRL
DRI
BOBE
EAT
TXRH
CAKE
BH
DENN
RT
Peer Median:  32.9%
2
3
6
1
Source:  Bloomberg and public filings
Note:  Market data as of 28-Sep-2012.
CAKE not adjusted for impact of 53
rd
week in FY’11 due to lack of disclosure.
Calculated as latest annualized latest dividend per share divided by last twelve months reported diluted earnings per share.  Adjusted diluted
earnings per share and / or diluted earnings per share from continuing operations used as disclosed.
rd
(1)
(2)
(3)
Adjusted for  53
week in FY’12, proxy contest expenses, severance and restructuring charges.
GAAP basis  operating results to adjusted non-GAAP operating results.
Please see Appendix for reconciliation of 

III. Driving Best-in-Class Results

Decisive Action Driving
Total Shareholder
Return
BUILDING ON OUR RECENT SUCCESS
Continued focus on six business priorities
Focus on increasing average unit volume in existing stores
Increase retail sales with unique and nostalgic merchandise
Drive increased profitability in existing locations
Continued commitment to profitable new unit growth
Allocate capital in a way to maximize value
–
New store growth: 2-3% / per year; focus on most profitable growth, best locations, and flawless
execution
Extend the power of the brand beyond the physical store
Long term value creation through e-commerce & development of branded products platform
Focus on Operational Excellence in Existing Units AND
Profitable New Restaurant Growth
2012 –
2015 Strategic Plan
Sales Growth
~5%
Operating Income Growth
~8-10%
Earnings Per Share Growth
~12-15%
Total Shareholder Return
~15-18%
19

20
ACCELERATION
OF
COMPARABLE
RESTAURANT
SAME
STORE
SALES VS. KNAPP-TRACK™
Three
Consecutive
Knapp-Track™
Beats
in
FY
2012
Source: Public filings and Knapp-Track™
Note:  Knapp-Track™
Casual
Dining
Index
Comparable
Sales
figure
is
an
approximation
based
on
respective
weekly
averages.
Cracker Barrel vs.
Knapp-Track™
(2.5)%
(1.6)%
3.5 %
3.1 %
3.8 %
0.9 %
2.2 %
1.0 %
0.3 %
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
Cracker Barrel Comparable Restaurant Sales
Knapp-Track™
Casual
Dining
Index
Comparable
Sales
1.3%
2.1%
3.5%

21
A SECTOR LEADER IN TOTAL SHAREHOLDER RETURN
TSR Since Announcement of our Strategic Priorities
1
Source:  Bloomberg and public filings
Note:  Total Shareholder Return calculated by share price appreciation and dividends paid (assumes dividends paid are re-invested into the stock
(purchasing more shares) on the ex-date of the dividend) over the past year.
(1)  12-Sep-2011; is closing price the day prior to announcement of Strategic Priorities on 13-Sep-2011.

Refresh Select Menu Categories
Reinforce value proposition for guests with a
refresh of Country Dinner Plates
Introduce better-for-you programs, including new
sides and Wholesome Fixins’
Grow Retail Sales with Unique
Merchandise
Focus on unique, exclusive, authentic
merchandise
Improve productivity with visual merchandising
and space planning
Build on Successful Handcrafted
Marketing Campaign
Continue national media strategy
Introduce
new
“Hand-crafted”
creative
advertisements for TV, radio, and billboards
Invest in and Leverage Technology to
Support Operations and Reduce Costs
Implement technology to improve efficiencies and
food quality
Streamline processes to increase labor
productivity
Focus on Maximizing
Shareholder Returns
Target 2-3% annual new unit growth over the next
three years
Pay competitive dividends and repurchase shares
Improve E-commerce Business
and Develop Branded Products
Platform
Grow e-commerce awareness and revenues
Lay groundwork to sell Cracker Barrel branded
products in grocery stores
UPDATED BUSINESS PRIORITIES TO CONTINUE DRIVING
PERFORMANCE THROUGH 2013
Key Priorities
Objectives
1
2
3
4
5
6
22

23
A RENEWED BOARD HELPING TO DRIVE PERFORMANCE
Note:  Represents board changes as implemented or announced.  Represents Board members standing for election at Cracker Barrel 2012 Annual
Shareholder Meeting.
(1)  As announced on 6-Aug-2012, to be effective following Michael A. Woodhouse’s retirement in early November 2012.
New Within Past 18 Months
Tom Barr, Vice President, Global Coffee, at Starbucks Coffee Company
Independent
Sandy
Cochran,
President
and
CEO,
Cracker
Barrel
and
former
CEO,
Books-A-Million
James Bradford, Dean of Vanderbilt’s Owen Graduate School of Management and former President and
CEO
of
AFG
Industries,
Inc.;
Designated
Independent
Chairman
of
the
Board
of
Cracker
Barrel
¹
Glenn Davenport, Retired Chairman and CEO, Morrison Management Specialists
Norman Johnson, Executive Chairman and Former CEO, CLARCOR Inc.
William
McCarten,
Chairman
of
the
Board,
DiamondRock
Hospitality
Company
and
former
President
and
CEO, HMS Host Corporation
Coleman
Peterson,
President
and
CEO,
Hollis
Enterprises,
LLC
and
former
EVP
and
Chief
People
Officer,
Walmart
Richard
Dobkin,
retired
Managing
Partner
of
the
Tampa,
FL
office
of
Ernst
&
Young
Martha Mitchell, retired Senior Partner and SVP, Fleishman-Hillard, International Communications
Andrea Weiss, President and CEO, Retail Consulting and former Chairman, Cortefiel Group

ANALYSTS CONTINUE TO COMMENT FAVORABLY ON THE STRATEGY
PUT FORTH BY THE INCUMBENT BOARD AND NEW MANAGEMENT…
24
Source:  Publicly available equity research reports, permission to use quotations neither sought nor obtained
Selected Analyst Commentary

IV. Why We Believe Sardar Biglari is
Wrong for This Board

26
WHY WE BELIEVE SARDAR BIGLARI IS STILL WRONG FOR THIS
BOARD
New Cracker Barrel CEO and reconfigured Board laid out a new plan and are successfully executing that
plan –
we believe Biglari would be disruptive to current business momentum
We
believe
Biglari’s
presence
on
our
Board
would
create
a
conflict
of
interest
–
he
is
the
CEO
of
a
family
restaurant chain and CEO of a restaurant acquisition vehicle
We believe Biglari would want to be operationally involved but has failed to disclose his specific plans
or agenda for the business, either to management or directly to the Board
His
repeated
public
pronouncements
highlight
his
combative
approach
–
was
offered
two
independent
board seats for representation (twice) but turned BOTH offers down
Biglari has a history of “creeping control”
that we believe is not in the best interest of shareholders: 
took control of Steak ‘n Shake over time without paying a premium
We believe Biglari has a questionable track record on corporate governance:  still proposing dual class
of high vote / low vote stock at Biglari Holdings and proposed excessive compensation for himself at
Biglari Holdings which received negative shareholder and ISS responses
Biglari Holdings just agreed to pay a $850,000 civil penalty to resolve a Federal Trade Commission
complaint for failing to comply with the Hart-Scott-Rodino Act in amassing its initial position in Cracker
Barrel
–
a
violation
the
FTC’s
Chairman
characterized
as
trying
to
abuse
the
law’s
“passive
investor”
exemption

27
BIGLARI HAS ARGUED THAT HE PURCHASED CBRL STOCK FOR
INVESTMENT PURPOSES ONLY…
(1)  Biglari Holdings, press release dated 23-Sep-2011.
However, Biglari’s Rhetoric Changes Over Time and We Believe Cannot Be Relied Upon
“…we told Chairman Michael
Woodhouse that we have
purchased stock for
investment purposes only”
“Our intention was that even if
we were to purchase additional
stock, we would keep
ownership well under 20%.”
Current ownership of 17.4% exceeds his previously
announced intentions
Biglari has twice attempted to gain board seats to
influence
the
Company
–
not
“investment
purposes
only”
In September 2012, Biglari Holdings agreed to pay
$850,000 to settle charges that it violated anti-trust
rules when it purchased Cracker Barrel shares
1
–
Sardar
Biglari
1
–
Sardar
Biglari

28
…WHAT SARDAR BIGLARI RECENTLY CONFIRMED ABOUT
BIGLARI HOLDINGS
“We,
however,
are
control
investors
“Biglari Holdings is an unconventional public company because it is in the business of
owning other businesses without regard to any particular industry along with the stipulation
that all major capital allocation decisions are made by Sardar Biglari, Chairman and CEO.
“The logic underlying the dual class structure indicates that we could gain increased
flexibility in structuring acquisitions and financing transactions to augment our growth. As a
holding company, we believe that the greater flexibility resulting from our proposal would
transform into an advantage in our pursuit of other businesses. …We may also use such
stock
to
acquire
other
businesses
or
combinations
thereof.
Source:
Public
filings
Note:
Emphasis
added.
(1)
Biglari
Holdings,
2011
Letter
from
the
Chairman,
dated
10-Dec-2011.
(2)
Biglari
Holdings,
Schedule
14A,
filed
12-Sep-2012.
2
1
2
”
”
”

29
WHAT DOES BIGLARI REALLY THINK?
“Biglari Holdings is a jockey stock.
You are choosing the jockey; I am choosing the horses.
It
would
be
asinine
to
bet
on
the
jockey
and
then
deny
him
the
saddle
or
whip.”
1
Source:  Public filings
(1)
Biglari Holdings, 2011 Letter from the Chairman, dated 10-Dec-2011.

30
OUR VIEWS ON BIGLARI ARE SHARED BY WALL STREET
ANALYSTS
Selected Analyst Commentary
Source: Publicly available equity research reports, permission to use quotations neither sought nor obtained
“Mr. Biglari’s argument seems to be less focused on corporate governance and shareholder performance,
which was the basis of last year’s proxy fight, and more focused on demanding that as the largest
shareholder
he
deserves
two
seats
on
Cracker
Barrel’s
board.
We
are
skeptical
that
the
other
82%
of
Cracker
Barrel’s
shareholders
would
vote
for
two
executives
of
a
direct
competitor,
Steak
‘n
Shake,
to
join
Cracker
Barrel’s board. We find it interesting that if you exclude the investment in Cracker Barrel, Biglari Holdings has not
made many shareholder enhancing decisions the past two years. Assuming the market is reflecting the CBRL
investment gain in BH’s market valuation, we estimate BH’s market value would be down about 10% since it
became an active investor in Cracker Barrel on June 13, 2011 (vs. KBCM Restaurant Index +30%). We estimate
the
CBRL
investment
represents
roughly
55%
of
BH’s
enterprise
value.
We
expect
Biglari
Holdings
will
lose
the
proxy fight in November.”
-
Chris O’Cull, KeyBanc Capital Markets; 20-Sep-2012
“Mr.
Biglari
has
not
issued
an
alternative
strategic
plan
for
CBRL
but
has
suggested
aggressive
goals
to
drive
sales
and
traffic
without
supporting
details
as
to
how
such
results
would
be
realized.
Under
Sandy
Cochran,
who
became
CEO
in
September
2011,
the
company
has
performed
strongly.
Numerous
changes
have
been
implemented ranging from board composition (much higher quality board in our opinion) to marketing, cost
management, and willingness to return cash to shareholders. …It is not clear what Mr. Biglari’s plans might
involve or if they could be as effective as management’s recent performance.”
-
Joseph T. Buckley, Bank of America Merrill Lynch ; 19-Sep-2012

31
OUR VIEWS ON BIGLARI ARE SHARED BY WALL STREET
ANALYSTS (CONT.)
Selected Analyst Commentary
Source: Publicly available equity research reports, permission to use quotations neither sought nor obtained

32
BIGLARI OFTEN STATES HE IS A "CONTROL INVESTOR’’
BUT WE BELIEVE
YOU SHOULD NOT ALLOW HIM TO TAKE CREEPING CONTROL OF
CRACKER BARREL AS HE DID WITH STEAK 'N SHAKE
Source:  Public filings and Bloomberg
17-Aug-2007
Share Price:
$309.00
¹
Biglari discloses
5.8% ownership in
Steak ‘n Shake
Nominates himself
and Cooley to the
Board
Purchased
through:
-
Lion Fund
-
Western Sizzlin
-
P. Cooley
Call Options:
-
20,000 shares
through Lion
Fund
-
561,000 shares
through Western
Sizzlin
7-Mar-2008
Biglari wins Proxy
Contest
19-Jun-2008
Biglari appointed Chairman
of the Board
Jul-2008
Two executive team
members resign
8-Aug-2008
Biglari appointed
CEO
Biglari originally claimed that
he had acquired shares
“for investment purposes”
Instead he:
22-Oct-2009
Announces Merger with
Western Sizzlin
5.8%
Ownership
Today:
Control
of
15.5%
³
and CEO
Share Price
(28-Sep-2012)
$365.06
8-Apr-2010
Renamed Biglari Holdings
Biglari
only
controlled
6.8%
²
(1)
Stock price adjusted for reverse split to be comparable to current market price.
(2)
As per Biglari's Schedule 13D/A filing on 3-Feb-2010.
(3)
As per Biglari's preliminary proxy filing on 12-Sep-2012.
Took control
Became Chairman and CEO
Merged with Western Sizzlin
Renamed Biglari Holdings

EVEN
WITH
BIGLARI
HOLDINGS’
LARGE
STAKE,
BH
HAS
SIGNIFICANTLY
UNDERPERFORMED
CBRL
CBRL Represents over 50% of BH’s Market Cap
Source:  Bloomberg and public filings
Note: 12-Sep-2011; is closing price the day prior to announcement of Strategic Priorities on 13-Sep-2011.
What value has Biglari
created for his
shareholders in his own
restaurant business
without CBRL?
90%
100%
110%
120%
130%
140%
150%
160%
170%
Sep-2011
Nov-2011
Jan-2012
Mar-2012
May-2012
Jul-2012
Sep-2012
Daily from 12-Sep-2011 to 28-Sep-2012
Cracker Barrel
Biglari Holdings
68.4%
22.4%
33

34
BIGLARI AGAIN TURNED DOWN A GOOD FAITH SETTLEMENT
OFFER
Biglari Rejected The Following Settlement Proposal:
Biglari
Holdings
was
offered
two
board
seats
subject
only
to
the
reasonable
requirements
that
nominees:
–
Not be affiliated with Biglari Holdings
–
Not be a current executive officer or director of a competing restaurant company
–
Comply with CBRL’s long-standing publicly disclosed qualification criteria
This offer was subject to the minimal conditions that, Biglari Holdings:
–
Support the Board-recommended slate of nominees at the 2012 annual meeting that would include the two
nominees of Biglari Holdings
–
Not nominate other candidates or present shareholder proposals at the 2012 annual meeting
–
Not seek to call or support any special meeting prior to the Company’s 2013 annual meeting
Many proxy fights are settled with the appointment of one or more directors that are not affiliated with the
dissident, yet Biglari refuses even to consider nominating an independent director, insisting that is has to be him
and Cooley
Does
Mr.
Biglari
really
want
representation
or
simply
a
platform
for
himself?
–
In voting Biglari down last year, shareholders determined last year he wasn’t right for the Board

35
ONE THING THAT HAS NOT CHANGED AT BIGLARI HOLDINGS…
….It’s All About Sardar

36
OTHER SHAREHOLDER MATTERS
Shareholder-Friendly Rights Plan is Fully Consistent with ISS Guidelines, Including a 20% Threshold
Compensation –
Pay for Performance Culture
Adopted in April 2012 in response to threat that Biglari could gain creeping control without paying a control premium
–
In
his
2011
“Letter
From
the
Chairman,”
Biglari
said
“We…are
control
investors
when
we
own
a
sizeable
block
of
stock
engendering influence”
–
Tennessee law preventing shareholders from voting shares above 20% without shareholder approval is not sufficient.  By
acquiring shares above 20%, Biglari could still prevent other shareholders from voting those shares and gain greater
influence by virtue of economic ownership
Shareholder-friendly provisions include:
–
Rights
plan
would
not
be
triggered
by
“qualifying
offers”
(all-cash,
fully
financed
tender
offers
that
remain
open
for
at
least
60 business days)
–
Rights plan is focused on creeping acquisitions above 20% and would not deter a non-coercive cash tender offer for all
shares
–
Rights expire if shareholders do not approve rights plan at November 2012 annual meeting
–
If shareholders approve, rights would expire on April 9, 2015
80% of CEO’s target total direct 2012 compensation, and 69% of other named executive officers, is contingent upon
measurable performance
Incentive programs have one, two and three year performance periods to promote long term and current year shareholder
value
2012
Total
Shareholder
Return
significantly
outperformed
the
S&P
500,
600,
and
1,500
Restaurant
indices
Revenue growth, improved margins, incentive plan performance in excess of targets and recognized guest experience #1 in
Family Dining segment in 2012 Consumer Picks

37
WHY YOU SHOULD VOTE THE WHITE PROXY CARD
We have accomplished a great deal over the last year –
with more to come
Our reconfigured Board is highly engaged and continuously seeks to create value
We believe Biglari’s and Cooley’s presence would create a conflict of interest and
would be detrimental to the functioning of our Board
We again made a good faith offer this year to permit Biglari to appoint two
independent directors to the Board and again he rejected.  Is his fight about having
representation or just about him?
We believe Biglari’s historic playbook of creeping control and poor corporate
governance could harm Cracker Barrel and its shareholders

Appendix

39
RECONCILIATION OF GAAP BASIS OPERATING RESULTS
TO ADJUSTED NON-GAAP OPERATING RESULTS
(Unaudited and $ in thousands, except per share data)
(1) Severance, other charges and tax effects related to operational restructuring.
(2) (Charges) Gain and tax effects of impairment net of gain on sale of property.
(3) Refinancing costs and tax effects related to the Company's $750 million credit facility.
(4) Charges and tax effects of the proxy contest concluded at the Company's annual meeting of shareholders.
Fourth Quarter Ended August 3, 2012
Fourth Quarter Ended July 29, 2011
As Reported
Adjust
53rd Week
As Adjusted
As Reported
Adjust
1,2,3,4
As Adjusted
Total Revenue
$ 700,010
(51,059)
$ 648,951
$ 612,942
$ 612,942
Store Operating Income
97,577
–
(11,093)
86,484
74,660
–
74,660
General and Administrative Expenses
37,671
–
(1,370)
36,301
35,323
(2,172)
33,151
Impairment and Store Dispositions, Net
–
–
–
–
1,249
(1,044)
205
Operating Income
59,906
–
(9,723)
50,183
38,088
3,216
41,304
Interest Expense
11,354
–
(811)
10,543
16,327
(5,136)
11,191
Pretax Income
48,552
–
(8,912)
39,640
21,761
8,352
30,113
Provision for Income Tax
13,856
–
(2,632)
11,224
4,218
2,201
6,419
Net Income
$ 34,696
–
$ (6,280)
$ 28,416
$ 17,543
$ 6,151
$ 23,694
Earning
Per
Share
–
Basic
$ 1.49
–
(0.27)
$ 1.22
$ 0.77
$ 0.27
$ 1.04
Earning
Per
Share
–
Diluted
$ 1.47
–
(0.27)
$ 1.20
$ 0.75
$ 0.26
$ 1.01
Twelve Months Ended August 3, 2012
Twelve Months Ended July 29, 2011
As Reported
Adjust
1,4
53rd Week
As Adjusted
As Reported
Adjust
1,2,3,4
As Adjusted
Total Revenue
$ 2,580,195
(51,059)
$ 2,529,136
$ 2,434,435
$ 2,434,435
Store Operating Income
337,146
–
(11,093)
326,053
305,778
–
305,778
General and Administrative Expenses
146,171
(6,863)
(1,370)
137,938
139,222
(2,172)
137,050
Impairment and Store Dispositions, Net
–
–
–
–
(625)
830
205
Operating Income
190,975
6,863
(9,723)
188,115
167,181
1,342
168,523
Interest Expense
44,687
–
(811)
43,876
51,490
(5,136)
46,354
Pretax Income
146,288
6,863
(8,912)
144,239
115,691
6,478
122,169
Provision for Income Tax
43,207
2,027
(2,632)
42,602
30,483
1,707
32,190
Net Income
$ 103,081
$ 4,836
$ (6,280)
$ 101,637
$ 85,208
$4,771
$ 89,979
Earning
Per
Share
–
Basic
$ 4.47
$ 0.21
(0.27)
$ 4.41
$ 3.70
$ 0.21
$ 3.91
Earning
Per
Share
–
Diluted
$ 4.40
$ 0.21
(0.27)
$ 4.34
$ 3.61
$ 0.20
$ 3.81

40
A NOTE REGARDING PEER SET USED FOR BENCHMARKING
Last year our peer set included:
–
Biglari Holdings, Brinker International,
Cheesecake Factory, Darden Restaurants, P.F.
Chang’s China Bistro, Ruby Tuesday, and
Texas Roadhouse
–
During the past year P.F. Chang’s China Bistro
was acquired by Centerbridge Partners and is
no longer publicly traded
–
Based on feedback received we have added
Bob Evans Farms and Denny’s Corporation both
full-service restaurants chains
We believe this subset of casual and family dining
restaurants represents the most comparable set of
companies to benchmark CBRL performance
–
Leading casual / family dining concepts
–
Operational comparability
–
Similar scale
–
Geographical proximity
Rationale for Inclusion
Peer Set
Ticker
Company Name
Logo
BH
Biglari Holdings
BOBE
Bob Evans Farms
EAT
Brinker International
CAKE
The Cheesecake Factory
DRI
Darden Restaurants
DENN
Denny‘s Corporation
RT
Ruby Tuesday
TXRH
Texas Roadhouse

S&P RESTAURANT INDEX COMPOSITION
Respective S&P Restaurant Index Constituents
Ticker
Company Name
Logo
S&P
500
S&P
600
S&P
1,500
BJRI
BJ’s Restaurants
BH
Biglari Holdings
BOBE
Bob Evans Farms
BWLD
Buffalo Wild Wings
CAKE
The Cheesecake Factory
CBRL
Cracker Barrel Old Country Store
CEC
CEC Entertainment
CMG
Chipotle Mexican Grill
DIN
DineEquity
DRI
Darden Restaurants
EAT
Brinker International
JACK
Jack in the Box
Ticker
Company Name
Logo
S&P
500
S&P
600
S&P
1,500
MCD
McDonald’s
PEET
Peet’s Coffee & Tea
PNRA
Panera Bread Company
PZZA
Papa John’s International
RRGB
Red Robin Gourmet Burgers
RT
Ruby Tuesday
RUTH
Ruth’s Hospitality Group
SBUX
Starbucks
SONC
Sonic
TXRH
Texas Roadhouse
WEN
The Wendy’s Company
YUM
Yum! Brands
41