A Comparison of Sardar Biglari and Charles Jones

SAN ANTONIO, Dec. 14, 2011 /PRNewswire/ -- Biglari Holdings Inc. (NYSE: BH) believes that the choice for director at the upcoming 2011 Annual Meeting of Cracker Barrel Old Country Store, Inc. (NASDAQ: CBRL) is clear.  Biglari Holdings has nominated Sardar Biglari, its Chairman and Chief Executive Officer, to replace Charles E. Jones, Jr., who has been a director for 30 years and serves as Chairman of Cracker Barrel's Compensation Committee. Cracker Barrel's executive compensation programs have been assailed by Glass Lewis. When one views the qualifications of Messrs. Biglari and Jones, as abstracted from the companies' respective proxy statements, the urgent need for change at the Board level is readily apparent:

Glass Lewis has dismissed the Board's rhetoric that Mr. Biglari has a conflict of interest by stating that Cracker Barrel's position embodies an accusation "typical of an entrenched board during a proxy fight."  However, Glass Lewis questions Charles Jones' level of independence, stating, "[It is] hard to call [Mr. Jones] 'independent.'" Mr. Jones is Chairman and CEO of a public relations firm that provides services to Cracker Barrel. For the last two years shareholders have attempted to reform corporate governance at Cracker Barrel by simply withholding votes for Mr. Jones (25.1% in 2010 and 26.3% in 2009). However, the other directors have failed to address shareholder concerns. It unfathomable to us that the Board adjudges Mr. Jones fit to serve as Chair of its Compensation Committee. In Glass Lewis' words, Mr. Jones' work as Committee Chair is marred by "an unreasonably low bonus target in the executive compensation structure and a weak link between executive pay and performance," both "hallmarks of an entrenched board." Under Mr. Jones' leadership, the Compensation Committee paid bonuses to senior executives in 2008 even though performance targets were unmet. Mr. Jones' and the Committee's solution was to lower the performance thresholds for incentive compensation in 2009, and then again in 2010-2011 to $90 million of operating income, a level unseen by the Company since 1994. The argument that target is set low for tax deductibility is unsound because there is no reason to set bonus at such a low level — namely, 45% below the prior year's operating income.

In the final analysis, this election comes down to who is best suited to represent shareholders, the true owners of Cracker Barrel. Biglari Holdings is the largest shareholder of the Company owning approximately 10% of the shares. Charles Jones, despite his 30 years on the Board, currently owns significantly less than 1%, with more than three-quarters of his shares having been granted to him rather than purchased on the open market. Sardar Biglari, whose interests are aligned with all shareholders, is seeking just one seat out of eleven. Who better to represent shareholders, to challenge the status quo, and to work to maximize value for all shareholders, then a true owner?

By returning the GOLD proxy card today, you are voting to put an end to the lack of experience, independence and ownership mentality that, in our view, are preventing Cracker Barrel from realizing its full potential.

***

CERTAIN INFORMATION CONCERNING PARTICIPANTS

Biglari Holdings Inc., an Indiana corporation ("Biglari Holdings"), together with the other participants named below, has filed with the Securities and Exchange Commission ("SEC") a definitive proxy statement and accompanying proxy card to be used to solicit votes for the election of Sardar Biglari to the Board of Directors of Cracker Barrel Old Country Store, Inc., a Tennessee corporation (the "Company"), at the 2011 annual meeting of shareholders of the Company.

BIGLARI HOLDINGS STRONGLY ADVISES ALL SHAREHOLDERS OF THE COMPANY TO READ THE PROXY STATEMENT AND OTHER PROXY MATERIALS AS THEY BECOME AVAILABLE BECAUSE THEY CONTAIN, AND WILL CONTAIN, IMPORTANT INFORMATION.  SUCH PROXY MATERIALS ARE AVAILABLE AT NO CHARGE ON THE SEC'S WEB SITE AT HTTP://WWW.SEC.GOV.  IN ADDITION, THE PARTICIPANTS IN THIS PROXY SOLICITATION WILL PROVIDE COPIES OF THE PROXY STATEMENT WITHOUT CHARGE UPON REQUEST.  REQUESTS FOR COPIES SHOULD BE DIRECTED TO THE PARTICIPANTS' PROXY SOLICITOR, INNISFREE M&A INCORPORATED, TOLL-FREE AT (888) 750-5834, BANKS AND BROKERS CALL COLLECT AT (212) 750-5833.

The participants in this proxy solicitation are Biglari Holdings, Biglari Capital Corp., a Texas corporation ("BCC"), The Lion Fund, L.P., a Delaware limited partnership (the "Lion Fund"), and Sardar Biglari.

As of the date hereof, Biglari Holdings directly owns 2,147,887 shares of Common Stock of the Company.  As of the date hereof, the Lion Fund directly owns 140,100 shares of Common Stock.  Each of BCC, as the general partner of the Lion Fund, and Biglari Holdings, as the parent of BCC, may be deemed to beneficially own the shares of Common Stock directly owned by the Lion Fund.  Mr. Biglari, as the Chairman and Chief Executive Officer of each of BCC and Biglari Holdings, may be deemed to beneficially own the shares of Common Stock directly owned by Biglari Holdings and the Lion Fund.

As members of a "group" for the purposes of Rule 13d-5(b)(1) of the Securities Exchange Act of 1934, as amended, each of the participants in this proxy solicitation is deemed to beneficially own the shares of Common Stock of the Company beneficially owned in the aggregate by the other participants. Each of the participants in this proxy solicitation disclaims beneficial ownership of such shares of Common Stock except to the extent of his or its pecuniary interest therein.

SOURCE Biglari Holdings Inc.