ISS and Glass Lewis Endorse All Cracker Barrel Nominees to Board; Reject Bids by Biglari and Cooley for Board Seats

  ISS and Glass Lewis Endorse All Cracker Barrel Nominees to Board; Reject
  Bids by Biglari and Cooley for Board Seats

  *Leading Proxy Advisory Firms Cite Company’s Strong Performance and Renewed
    Board
  *ISS Says Biglari Has ‘Not Made a Compelling Case’; Glass Lewis Cites
    Biglari’s ‘Abrasive Commentary,’ ‘Specious Arguments’ and ‘Vaguely-Framed
    Plan’
  *ISS Recommends Approval of Shareholder Rights Plan

Business Wire

LEBANON, Tenn. -- November 05, 2012

Cracker Barrel Old Country Store, Inc. ("Cracker Barrel" or the "Company")
(Nasdaq: CBRL) today announced that both Institutional Shareholder Services
(“ISS”) and Glass, Lewis & Co. (“Glass Lewis”) have recommended that Cracker
Barrel shareholders vote FOR all of the individuals nominated by the Company's
Board of Directors for election to the Board at the Company's Annual Meeting
of Shareholders on November 15, 2012. ISS and Glass Lewis are leading proxy
voting advisory services whose recommendations are considered by major
institutional investment firms, mutual funds and other fiduciaries throughout
the country.

In endorsing the Cracker Barrel nominees, both ISS and Glass Lewis recommended
that shareholders reject Biglari Holdings' nomination of Sardar Biglari and
Phil Cooley. Cracker Barrel shareholders rejected a similar proxy challenge by
Mr. Biglari last year.

  *ISS stated: “As the most compelling explanation of the company’s
    resurgence is the leadership change and execution on the new strategic
    plan by the existing board and management team – and not suggestions of
    the dissident nominees in last year’s or this year’s proxy contest,
    however meritorious – it is clear the dissidents have not made a
    compelling case that change at the board level is warranted.”
  *Similarly, Glass Lewis said: “Cracker Barrel appears to have dramatically
    improved its financial performance, while also taking concrete steps to
    remediate or eliminate several outstanding governance concerns. In
    response, we find the Dissident has resorted to decidedly less compelling
    quantitative arguments and abrasive commentary to support a vaguely-framed
    plan that, all other things equal, seems to work against a strategy that
    has objectively improved returns and transparency for Cracker Barrel
    shareholders.”^1

Sandra B. Cochran, president and chief executive officer of Cracker Barrel,
said: “We are very pleased that both ISS and Glass Lewis, two highly respected
proxy advisory services, are supporting our nominees to the Board and opposing
Mr. Biglari and Mr. Cooley. I am especially gratified that ISS and Glass Lewis
have recognized our accomplishments on key financial and operational
objectives, the addition of seven new directors in the last 18 months, and the
significant appreciation in the value of the Company’s shares since the
initiation of our strategic priorities announced in September of last year.

“It is also notable that ISS recommends shareholders vote FOR the Company’s
shareholder rights plan, which is designed to prevent Mr. Biglari from taking
creeping control of Cracker Barrel without paying a premium to all
shareholders.

"I urge our shareholders to vote FOR ALL of Cracker Barrel's Board nominees on
the WHITE proxy card, and to approve the Company’s important
shareholder-rights plan,” Ms. Cochran concluded.

Key excerpts from the ISS report:

  *“For shareholders considering their vote in this proxy contest, the most
    telling point might be that the start of all this market endorsement
    coincides not only with the dissident’s announcement of their first,
    failed proxy contest, but with the new CEO’s announcement of her strategic
    objectives, which thus far appear to (be) delivering the goods and driving
    meaningful increases in shareholder value.”
  *“Generally when an activist loses a contest for board seats, any price
    support provided by the anticipation of change falls away quickly after
    the election itself. In this case, however, the strong improvement in
    share prices continued for the next eleven months, strongly suggesting the
    market was reacting to fundamental improvements in operations driven by
    the board and management team. To the extent share price appreciation has
    outstripped growth in margins and net income, one might reasonably
    conclude this is evidence the market has bought into the company’s
    turnaround strategy and its operating leadership.”
  *“The income statement for fiscal 2012 strongly supports the company’s view
    that a real turnaround has taken root.”
  *“So too, it might be said, is the market signaling that comes from beating
    analyst expectations for 4 straight quarters, or improving operating cash
    flow so materially that the board can comfortably double the dividend.
    Where the dissidents can only point to local or industry news articles
    crediting their influence for the turnaround, the company can point to a
    slew of equity analysts – who are compensated on their track record, not
    their column inches – who credit the strategies and execution of the board
    and management team.”
  *“A new marketing strategy, by contrast – coupled with new menu items more
    responsive to feedback from customer surveys – that drives a 6% increase
    in revenue is the kind of operating improvement that can signal an
    increase in economic potential to investors. Similarly, driving a 53 basis
    point increase in operating margin through the decidedly non-glitzy work
    of increasing efficiencies in logistics, employee scheduling, and
    organizational structure is a more powerful explanatory factor for what
    might have been driving the market endorsement since September 2011.”
  *“A vote FOR [the shareholder rights plan] proposal is warranted because
    the rights plan contains features that protect shareholders from
    entrenchment risk. Specifically, the pill has a three-year term, a
    20-percent trigger, and a robust qualifying offer clause and there is no
    dead-hand or slow-hand provision. In addition, there are no significant
    governance concerns at the company.”

ISS also criticized Mr. Biglari for focusing much of his campaign on a minor
flaw in the Company’s proxy statement biography of James W. Bradford, who has
been nominated by the Company to be independent Chairman of the Board. “It is
worth pointing out that this is a profoundly silly reason to run a proxy
contest, and the amount of attention the dissidents have lavished on it may
raise more questions about their sense of perspective than the incoming
Chairman’s integrity,” ISS wrote.

Key excerpts from the Glass Lewis report:

  *“Recent strategic changes, including those announced by new CEO Sandra
    Cochran on September 13, 2011, have led to decisively improved performance
    for Cracker Barrel, despite Biglari's assertions to the contrary.”
  *“We now find a materially improved Company operating under the stewardship
    of a substantially reconstituted board and management team that has
    executed on a well-codified and publicly-disclosed business plan.”
  *“Further foundering Biglari's most recent solicitation are a series of
    relatively uncompelling and, at times, specious arguments, which
    collectively do little to support a forward operating plan that is
    decidedly light on detail, despite the Dissident's industry experience.”
  *“We see limited reason for shareholders to further alter the current board
    and prospectively hinder Cracker Barrel's recent progress.”
  *”Briefly setting aside the fact that Biglari fails to express a clear and
    cogent strategy to actually improve the Company's margins or store-level
    operations, our own review indicates Cracker Barrel has already enjoyed
    some success in translating improved financial performance into superior
    shareholder returns and a more attractive valuation.”
  *“Most notably, based on the noted period-end date, it appears the Company
    posted superior total shareholder returns versus the Peer Composite and
    both indices across each of the selected periods, a distinction we expect
    is owed, in no small part, to the efforts of the reconstituted board.”
  *“In addition to an objectively clear inability to match Cracker Barrel's
    returns across each review period, we find Biglari's relatively modest
    performance over the last twelve months particularly noteworthy, given a
    17.3% stake in the Company that represented just over half of Biglari's
    entire market capitalization based on closing market prices as of October
    31, 2012 (Source: Capital IQ). In our view, this casts further doubt on
    the ability of the current executives and board members of the Dissident,
    which acts primarily as a holding company for two other restaurant chains,
    to contribute positively to deliberations regarding value-maximizing
    strategies available to Cracker Barrel.”
  *With respect to Mr. Biglari’s commentary related to the Company’s proxy
    statement biography of James W. Bradford, Glass Lewis said: “When viewed
    within the context of a contest that could afford Mr. Biglari significant
    board representation and the prospective ability to materially alter
    Cracker Barrel's strategic direction, we find such suggestively negative
    phrasing, particularly in the absence of truly compelling evidence, both
    unnecessarily combative and puerile. Further, we fail to see how such an
    approach is likely to portend constructive board-level discussions in the
    event Messrs. Biglari or Cooley are elected.”

Cracker Barrel strongly urges shareholders to elect the Company’s nominees to
the Board, and to endorse the Company’s shareholder-rights plan.

About Cracker Barrel

Cracker Barrel Old Country Store restaurants provide a friendly
home-away-from-home in their old country stores and restaurants. Guests are
cared for like family while relaxing and enjoying real home-style food and
shopping that's surprisingly unique, genuinely fun and reminiscent of
America's country heritage…all at a fair price. The restaurant serves up
delicious, home-style country food such as meatloaf and homemade chicken n'
dumplins as well as its signature biscuits using an old family recipe. The
authentic old country retail store is fun to shop and offers unique gifts and
self-indulgences.

Headquartered in Lebanon, Tennessee, Cracker Barrel Old Country Store, Inc.
(Nasdaq: CBRL) was established in 1969 and operates 621 company-owned
locations in 42 states. Every Cracker Barrel unit is open seven days a week
with hours Sunday through Thursday, 6 a.m. — 10 p.m., and Friday and Saturday,
6 a.m. - 11 p.m. For more information, visit: crackerbarrel.com.

Important Additional Information

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.

^1 Permission to use quotes in this press release from either the ISS report
or the Glass Lewis neither sought nor obtained.

CBRL-F

Contact:

Investor Contact:
Cracker Barrel Old Country Store, Inc.
Lawrence E. Hyatt, Senior Vice President and Chief Financial Officer
615-235-4432
or
MacKenzie Partners, Inc.
Mark Harnett, 212-929-5877
or
Media Contact:
Cracker Barrel Old Country Store, Inc.
Julie K. Davis, Senior Director, Corporate Communications
615-443-9266
or
Kekst and Company
Ruth Pachman, 212-521-4891
 
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