|Cracker Barrel urges shareholders to reject Biglari, Cooley for board|
|Thursday, October 4, 2012|
Cracker Barrel Old Country Store, Inc. ("Cracker Barrel" or the "Company") (Nasdaq: CBRL) on Thursday began mailing its proxy statement for the Company's Annual Meeting of Shareholders to be held on Nov. 15.
In addition, President and CEO Sandra B. Cochran sent a letter to the Company's shareholders urging them to elect the Company's 10 nominees to the Board of Directors, and to vote against the election of Sardar Biglari and Phil Cooley.“Despite being rejected by a significant margin last year, Mr. Biglari has not only chosen to re-fight the same battle to elect himself, but has also nominated his company’s vice chairman, Phil Cooley, for election, without providing any specific plans or proposals for the Cracker Barrel business,” Cochran wrote to Cracker Barrel shareholders. Biglari is CEO of a restaurant acquisition and holding company, Biglari Holdings, and CEO of its principal portfolio company, Steak 'n Shake, a family dining restaurant chain that Cracker Barrel considers a competitor.
“We believe Mr. Biglari and Mr. Cooley are wrong for Cracker Barrel’s Board and their election could jeopardize the powerful momentum we have built in the past year,” Cochran said.
The stock market, she noted, has recognized Cracker Barrel’s progress since the announcement of the Company’s six strategic priorities on Sept. 13, 2011, with a 68.4 percent appreciation in the value of the Company’s shares through Sept. 28, 2012. In addition, she pointed out that Cracker Barrel:
Cochran noted that Cracker Barrel has successfully delivered on the strategy it set out last year, noting, “We believe the facts today provide even stronger support for Cracker Barrel and its management and Board.”
She added, “In these challenging economic times, we strongly believe it is in the best interest of all of our shareholders to allow our cohesive and revitalized Board to continue our recent and ongoing success, and stay focused on the execution of our strategic initiatives. Our strong results, our commitment to the highest standards of corporate governance and our determination to serve the best interests of our shareholders speak for themselves.”
In September, Biglari was assessed a $850,000 fine as a civil penalty to settle charges that Biglari Holdings Inc. violated premerger reporting and waiting requirements when it acquired significant stock holdings in Cracker Barrel. The fine was announced by officials with the U.S. Department of Justice.
Biglari had previously refused an officer by Cracker Barrel’s Board of Directors to appoint two independent members to the board. He owns a 17.5 percent stake in Cracker Barrel and has been waging a proxy battle for two seats on the board.
The Justice Department’s Antitrust Division, at the request of the Federal Trade Commission, filed a civil antitrust lawsuit on Sept. 25 in U.S. District Court in Washington, D.C., against Biglari Holdings for violating the notification requirements of the Hart-Scott-Rodino (HSR) Act of 1976.
At the same time, the department filed a proposed settlement that, if approved by the court, will settle the charges.
The HSR Act of 1976, an amendment to the Clayton Act, imposes notification and waiting period requirements on individuals and companies over a certain size before they consummate acquisitions resulting in holding stock or assets above a certain value, which was $66 million in 2011 and is currently $68.2 million.
A federal judge must approve the settlement before it can take effect.