Nov. 13--The five proposals included the: re-election of all nine directors; approval of an advisory basis of the compensation of the named executive officers; re-approval of the material terms of performance goals; ratification of the appointment of Deloitte and Touche as the company's independent public accounting firm; and most notably, re-approval of the company's shareholder rights plan.
Last month, Sandra B. Cochran, Cracker Barrel president and CEO, released a letter to Cracker Barrel shareholders urging them to approve the company's Shareholder Rights Plan at the annual meeting.
In general terms, the rights plan works by imposing a significant penalty upon any person or group which acquires 20 percent or more of the outstanding common stock of the company without the approval of the board of directors.
The board of directors adopted the original rights plan in response to the persistent threat that a third party could accumulate a substantial, and potentially controlling position in the company through market purchases that do not reflect a control premium offered to all shareholders.
The original plan, which expired April 9, was adopted as a response to the rapid open-market acquisition program by Sardar Biglari and Biglari Holdings of Cracker Barrel's common stock.
The company believes Biglari, who has a 19.7 percent ($660 million) ownership position in Cracker Barrel, desires a controlling stake in the company.
"By keeping this plan in place, our shareholders will continue to be protected from Biglari Holdings, or any other party, who tries to accumulate a potentially controlling position in the company through any takeover strategies that do not provide all Cracker Barrel shareholders an equal opportunity to benefit from a change in control premium," Cochran wrote in the letter.
Cochran also highlighted the company's 2015 successes based on priorities introduced during last year's annual meeting.
Those priorities included: extending the reach of the Cracker Barrel brand; optimizing average guest check by implementing geographic pricing tiers; applying technology and process enhancements to drive store operating margins; and continuing to grow the brand by developing and opening new stores.
"I am very pleased with the sales and traffic performance that we had in 2015," said Cochran, noting traffic and sales delivered more than 5 percent of restaurant sales and 3.6 percent retail sales, which exceeded the casual dining industry in total.
Cochran said certain initiatives helped the company achieve the numbers, including focusing on menu and retail offerings, such as the Wholesome Fixin's selections.
On the retail side, Cochran noted the company was able to increase its sales and margin figures, while decreasing its retail inventory.
"To achieve all three of those in any one year is really a phenomenal accomplishment," she said. "I'm really proud of the teams' ability to deliver all that."
Cochran also detailed Cracker Barrel's market specific pricing tiers, which were first tested in fiscal year 2015.
Historically, Cracker Barrel held prices constant throughout the whole chain with very little differentiation, according to Cochran.
"It's now really commonplace among retailers and restaurants that prices vary depending on a lot of things, including labor costs and real estate costs," she said.
The Cracker Barrel pricing tier team used rigorous methodology to determine which markets need or require different pricing.
"We believe this initiative will allow us to be confident about our ability to raise prices on a compound annual growth rate of 2-3 percent going forward," Cochran said.
In fiscal year 2015, Cochran said the company was challenged to reduce its operating expenses by $20 million.
"Our field employees did a phenomenal job of executing against a very long list of initiatives," said Cochran, noting one of the biggest changes involved plate reduction throughout restaurants.
Cochran also highlighted the switch to digital system for dining seating.
"I am very pleased with the ability that has given our operators to manage our dining rooms and take care of more guests in the dining room," she said. "We'll be able to use that to add functionality going forward."
Overall, Cracker Barrel added six new stores, bringing its total count to 635 stores in 42 states. Additionally, approximately 150 locations were identified for new Cracker Barrel stores in the continental United States, with 75 percent being outside of the Southern core markets.
"2015 was a year of a lot of progress on many fronts," Cochran said. "We pride ourselves on our consistent quality, on our value, on our friendly service and our ability to deliver the Cracker Barrel guest promise and brand promise everyday in all 635 stores."
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