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