Biglari Holdings Responds to Cracker Barrel's Assertion That Misreports About
Incoming Chairman James Bradford Were a "Misunderstanding"
SAN ANTONIO, TX, October 9, 2012
SAN ANTONIO, TX, October 9, 2012 /PRNewswire/ --Biglari Holdings Inc. (NYSE:
BH) today replied to a statement issued by Cracker Barrel Old Country Store,
Inc. (NASDAQ: CBRL) claiming that public filings plus statements made by
Cracker Barrel, including those by Chief Executive Officer Sandra B. Cochran,
highlighting designated Chairman James Bradford's professed prior experience
as CEO of a New York Stock Exchange-listed company, were a "misunderstanding."
Cracker Barrel's response to Biglari Holdings' identification of a material
error in Cracker Barrel's public filings and statements regarding designated
Chairman James Bradford's ostensible experience as a "former NYSE company CEO"
was repugnant to shareholders. Just last week, Ms. Cochran touted Mr.
Bradford's purported credentials at an investor conference as well as in a
letter to shareholders. Shareholders are currently receiving letters in the
mail from Ms. Cochran that identify Mr. Bradford as "a former NYSE company
CEO." This assertion is now confirmed by the Company as 100% false. Yet, this
inaccuracy is not a misunderstanding — it is misleading.
The inaccurate disclosure in Mr. Bradford's biography was contained in Cracker
Barrel's proxy statements for both its 2012 and 2011 annual shareholders'
meetings and has been repeated by Ms. Cochran during the proxy contest.
Because last year's proxy statement had the same claim on his credentials, we
find it quite troubling that this embellishment has been left uncorrected. It
is unconscionable and inexplicable that Mr. Bradford overlooked or ignored
misstatements of fact for the duration of a year.
We are left to draw one of two conclusions:
1. Mr. Bradford did not read his biography in either this year's or last
year's proxy statement.
2. Mr. Bradford read his biography, yet did nothing to correct it.
Even if we assume he did not read either the Company's 2011 or 2012 proxy
statements, did he also fail to review presentations by the Company's
management to shareholders? Here are two recorded instances with links
available on Cracker Barrel's own website:
1. Wells Fargo Investor Conference
2. Letter to shareholders
The puzzling question for shareholders is why the Board and Ms. Cochran
believed it was important to emphasize repeatedly Mr. Bradford's purported
experience as "a former NYSE company CEO." In our mind the answer is because
Mr. Bradford's record is being measured against a current CEO of a NYSE-listed
company, Mr. Biglari. Unfortunately, Mr. Bradford was never a CEO of a NYSE
company. We outside shareholders should not be forced to identify errors when
there is a Board with 14 directors reviewing the documents from the
How could shareholders not blame Mr. Bradford for failing to ensure the
accuracy of his own credentials? Because Mr. Bradford is the Dean at
Vanderbilt University's Owen Graduate School of Management and holds a law
degree, there is absolutely no excuse for his oversight in his own biography
within the Company's proxy statement.
Mr. Bradford has an obligation to read the Company's proxy statement in its
entirety, and if there is anything within it that he should have paid
particular attention to, it would be his own biography. If Mr. Bradford were
not aware of his biography in SEC filings, andMs. Cochran's presentation to
investors, and the Company's letters to shareholders, then these mistakes
raise the question of how sound his commitment is to the Company. A
chairman-designee should closely review major public statements about him.
We find the Company's following statement downright insulting: "Mr. Bradford's
extensive business and academic experience is beyond reproach." We ask how Mr.
Bradford could be beyond blame when he was compensated $186,757 last year for
his services as a director of the Company, yet failed to identify or correct a
material error in Ms. Cochran's letter to shareholders, as well as six
versions of the Company's proxy statement filed with the SEC over the last two
years that contained the error. Does Mr. Bradford notthink thathe has a duty
to read carefully the Company's proxy statements and letters to shareholders?
What else is Mr. Bradford not reading that is imperative to fulfilling his
Mr. Bradford also holds board seats at three other companies that actually are
traded on the NYSE: CLARCOR Inc., Genesco Inc., and Granite Construction Inc.
Only in rare exceptions do we think a full-time employed person can be on four
outside boards. If Mr. Bradford is too busy to read proxy statements, then he
is too busy to be on the Board of Cracker Barrel.
We urge the Board to stop wasting valuable time along with Company resources
and drop its resistance to placing our two nominees on the Board. We are
Cracker Barrel's largest shareholder with an approximately $270 million
investment value in the Company's stock.One reason we are so engaged and
well-informed of suchmatters is that a substantial portion of our net worth
is tied to the future of Cracker Barrel.
SOURCE Biglari Holdings Inc.
Contact: Morrow & Co., LLC, Tom Ball or John Ferguson, +1-203-658-9400 or
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