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Cracker Barrel adopts shareholder rights plan

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Biglari reportedly informed the Securities and Exchange Commission that he had spent more than $3 million this past week to purchase the additional shares in Cracker Barrel. He has also reportedly spent more than $60 million so far in 2012 in purchasing stock.

The Boards action is in response to Biglari Holdings continuing open-market acquisition program of Cracker Barrel shares, which has brought current ownership to over 16 percent and the resulting possibility that Biglari Holdings could accumulate an even more substantial and potentially controlling position in Cracker Barrel through market purchases that do not reflect a control premium offered to all shareholders, said Sandra B. Cochran, president and chief executive officer of Cracker Barrel Old Country Store, Inc.

Biglari Holdings previously sought and received clearance in September 2011 under the Hart-Scott-Rodino Act to acquire up to 49.99 percent of Cracker Barrels common stock. We intend to put this rights plan to a vote of our shareholders at our 2012 shareholder meeting and believe it is important to protect the interests of our shareholders in the near-term, she added.

Unlike the rights plan that Cracker Barrel adopted in September 2011 with a 10 percent triggering threshold, and which expired after Cracker Barrel shareholders voted against the plan at the 2011 annual meeting, this new rights plan has a 20 percent triggering threshold that is fully consistent with the guidelines of Institutional Shareholder Services and that we believe contains the attributes looked for by most leading institutional investors. The shareholder rights plan is designed to assure that all of Cracker Barrels shareholders receive fair and equal treatment in the event of any proposed takeover of the Company and to guard against any attempt to gain control of Cracker Barrel without paying all shareholders a premium for that control, Cochran said.

The shareholder rights plan is effective immediately, and if approved by shareholders, will expire on April 9, 2015. If shareholders do not approve the rights plan, it will expire upon certification of the vote at the 2012 annual shareholders meeting.

Cracker Barrel, based in Lebanon, was founded in 1969.

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