UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
PROXY STATEMENT
Pursuant to Section 14 (a) of the Securities Exchange Act of 1934
CRACKER BARREL OLD COUNTRY STORE, INC.
(Name of Registrant)
JAMES F. BLACKSTOCK
Vice President, General Counsel and Secretary
Cracker Barrel Old Country Store, Inc.
P.O. Box 787 - Hartmann Drive
Lebanon, Tennessee 37088-0787
(615) 444-5533
(Name of Person Filing Proxy Statement)
Filed by the Registrant /X/ Filed by a Party
other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement / / Definitive Additional Materials
/X/ Definitive Proxy Statement / / Soliciting Material Pursuant to
Section 240.14a-11 ( c ) or
Section 240.14a-12
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-(i) (4)
and 0-11.
1) Title of each class of securities to which transaction applies:
________________________________________________________________
2) Aggregate number of securities to which transaction applies:
________________________________________________________________
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
________________________________________________________________
4) Proposed maximum aggregate value of transaction:
________________________________________________________________
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a) (2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid: ______________________________________
2) Form Schedule or Registration Statement No.: _________________
3) Filing Party: ________________________________________________
4) Date Filed: __________________________________________________
<PAGE>
CRACKER BARREL OLD COUNTRY STORE, INC.
305 Hartmann Drive
Lebanon, Tennessee 37087
-----------------
Notice of Annual Meeting of Shareholders
to be held on Tuesday, November 25, 1997
-----------------
Notice is hereby given that the Annual Meeting of Shareholders
of Cracker Barrel Old Country Store, Inc.(the "Company") will be
held at the offices of the Company located on Hartmann Drive,
Lebanon, Tennessee, on Tuesday, November 25, 1997 at 10:00 a.m.,
local time, for the following purposes:
(1) to elect 13 directors to serve until the next Annual Meeting and
until their successors are duly elected and qualified;
(2) to consider and vote upon the adoption of a proposed amendment
to the Cracker Barrel Old Country Store, Inc. Amended and Restated
Stock Option Plan to increase the number of shares of Company
Common Stock available under the Plan from 14,025,702 to 17,525,702;
(3) to approve the selection of Deloitte & Touche LLP as the
Company's independent auditors for the 1998 fiscal year;
(4) to consider and take action on a shareholder proposal
requesting that the Compensation and Stock Option
Committees link executive compensation to social policy
goals; and
(5) to transact such other business as may properly be brought
before the meeting or any adjournment of the meeting.
The Board of Directors has fixed the close of business on
September 29, 1997 as the record date for the determination of
shareholders entitled to notice of and to vote at the Annual Meeting.
Your attention is directed to the Proxy Statement accompanying
this notice for a more complete statement regarding matters to be
acted upon at the Annual Meeting.
By Order of the Board of Directors
James F. Blackstock, Secretary
Lebanon, Tennessee
October 24, 1997
YOUR REPRESENTATION AT THE MEETING IS IMPORTANT. TO ENSURE YOUR
REPRESENTATION, WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE
COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD. SHOULD YOU
DESIRE TO REVOKE YOUR PROXY, YOU MAY DO SO AS PROVIDED IN THE
ACCOMPANYING PROXY STATEMENT, AT ANY TIME BEFORE IT IS VOTED.
<PAGE>
CRACKER BARREL OLD COUNTRY STORE, INC.
305 Hartmann Drive
Lebanon, Tennessee 37087
--------------------
PROXY STATEMENT
--------------------
The accompanying proxy is solicited by, and on behalf of,
the Board of Directors of Cracker Barrel Old Country Store, Inc.
(the "Company") for use at the Annual Meeting of Shareholders to
be held on November 25, 1997, and any adjournment of that
meeting. Notice of the Annual Meeting is attached to this Proxy
Statement.
This Proxy Statement, and the Annual Report of the Company
for the fiscal year ended August 1, 1997, have been mailed on or
about October 24, 1997, to all shareholders of record on
September 29, 1997.
The purpose of the Annual Meeting is to elect 13 directors,
to adopt an amendment to the Cracker Barrel Old Country Store,
Inc. Amended and Restated Stock Option Plan to increase the
number of shares authorized under the Plan, to approve the
selection of Deloitte & Touche LLP as the Company's independent
auditors for the next fiscal year, and to vote on a shareholder
proposal requesting that the Compensation and Stock Option
Committees link executive compensation to social policy goals.
A shareholder of record who signs and returns a proxy in the
accompanying form may revoke the proxy at any time before the
designated proxy holder votes, by attending the Annual Meeting
and electing to vote in person, by filing with the Secretary of
the Company a written revocation or by duly executing a written
proxy bearing a later date. Unless duly revoked, the shares
represented by the proxy will be voted at the Annual Meeting.
Where a choice is specified on the proxy, the represented shares
will be voted in accordance with the specifications. If no
specification is made, proxy shares will be voted FOR
the election of all director nominees, FOR the adoption of
the amendment to the Amended and Restated Stock Option Plan, FOR
the approval of Deloitte & Touche LLP as the Company's independent
auditors for the 1998 fiscal year, and AGAINST the shareholder
proposal.
Directors shall be elected by a plurality of the votes cast
in the election by the holders of Company Common Stock
represented and entitled to vote at the Annual Meeting, if a
quorum is present. Assuming the existence of a quorum, every
other proposal submitted to the shareholders shall be approved if
the votes cast favoring the proposal exceed the votes cast
opposing it. Abstentions will be counted as present for purposes
of determining the existence of a quorum and for determining the
total number of votes cast. Abstentions are disregarded in
determining if a director receives a plurality of the votes cast
or whether votes cast for a proposal exceed votes cast against
it. Broker non-votes are disregarded for the purpose of
determining the total number of votes cast with respect to a
proposal.
<PAGE> 1
The Board of Directors knows of no other matters which are
to be brought to a vote at the Annual Meeting. However, if any
other matters properly come before the meeting, the persons
appointed in the proxy or their substitutes will vote in
accordance with their best judgment on those matters.
The Board of Directors has fixed the close of business on
September 29, 1997 as the record date for the Annual Meeting.
The Company's only class of securities is its Common Stock, with
a par value of $0.50 per share. On September 29, 1997, the
Company had outstanding 61,395,068 shares of Common Stock. Only
shareholders of record at the close of business on that date will
be entitled to vote at the Annual Meeting. For each share held,
those shareholders will be entitled to one vote which may be
given in person or by proxy authorized in writing.
The cost of solicitation of proxies will be borne by the
Company, including expenses in connection with preparing,
assembling and mailing this Proxy Statement. The solicitation
will be made by mail, and may also be made by the Company's
officers or employees personally or by telephone or telegram. No
officers or employees of the Company will receive additional
compensation for soliciting proxies. The Company may reimburse
brokers, custodians and nominees for their expenses in sending
proxies and proxy material to beneficial owners. The Company
retains Corporate Communications, Inc., 523 Third Avenue South,
Nashville, Tennessee to assist in the management of the Company's
investor relations and other shareholder communications issues.
As part of its duties, Corporate Communications, Inc. may assist
in the solicitation of proxies. Corporate Communications, Inc.
receives a fee of approximately $2,000 per month, plus
reimbursement of out-of-pocket expenses. See "Other Transactions
and Relationships" later in this document.
As it has done previously, the Company will continue to
employ an independent tabulator to receive and tabulate the
proxies, and independent inspectors of election to certify the
results. The Company will also continue its practice of holding
the votes of all shareholders in confidence from Company
directors, officers and employees, except (i) to allow the
independent inspectors of election to certify the results of the
vote, (ii) as necessary to meet applicable legal requirements and
to assert or defend claims for or against the Company, (iii) in
case of a contested proxy solicitation, or (iv) when a
shareholder makes a written comment on the proxy card or
otherwise communicates his or her vote to management.
<PAGE> 2
PROPOSAL 1. ELECTION OF DIRECTORS
The Company Bylaws provide that the Board of Directors shall
consist of not more than 15 persons. The Board of Directors has
established Board size at 13 directors. Proxies cannot be voted
for more than 13 persons. The terms of all present directors
will expire upon the election of new directors at the Annual
Meeting. The Board of Directors proposes the election of the
nominees listed below to serve until the next Annual Meeting and
until their successors are duly elected and qualified. All of the
nominees are presently directors of the Company and were elected
at the Annual Meeting held on November 26, 1996. Unless contrary
written instructions are received, it is intended that the shares
represented by proxies solicited by the Board of Directors will
be voted in favor of the election of all named nominees as
directors. If for any reason any nominee is unable to serve, the
persons named in the proxy have advised that they will vote for a
substitute nominee as proposed by the Company Board of Directors.
Each nominee has consented to act as a director, if elected, and
the Board of Directors has no reason to expect that any nominee
will fail to be a candidate at the meeting. Therefore, it does
not at this time have any substitute nominees under
consideration. The information relating to the 13 nominees set
forth below has been furnished to the Company by the named
individuals.
Directors shall be elected by a plurality of the votes cast
by the shares entitled to vote in the election at the Annual
Meeting. The Board of Directors recommends that shareholders
vote "FOR" the nominees listed below. Proxies, unless they
contain contrary written instructions, will be voted "FOR" the
listed nominees.
<TABLE>
<CAPTION>
Name, Age, Position First Became Business Experience
with the Company a Director During the Past Five Years
______________________ ____________ _________________________________
<S> <C> <C>
James C. Bradshaw, 66 1970 Practicing physician, Lebanon,
Director Tennessee
Robert V. Dale, 61 1986 President of Windy Hill Pet Food
Director Company, Nashville, Tennessee
since March 1995; Partner in PFB
Partnership, Nashville, Tennessee
from August 1994 to March 1995;
President of Martha White Foods,
Inc., Nashville, Tennessee from
October 1985 to August 1994
Dan W. Evins, 62 1970 Chairman and Chief Executive
Director, Chairman Officer of the Company; President
and Chief Executive of the Company until August 1995;
Officer (1) Member of Board of Directors of
Clayton Homes, Inc.
Edgar W. Evins, 65 1970 Retired in June 1987; President,
Director (1) DeKalb County Bank and Trust
Company, Alexandria, Tennessee
from 1958 until June 1987
<PAGE>
William D. Heydel, 68 1970 Retired in 1987; for the previous
Director five years, Tennessee manager of
American Family Life Assurance
Company, Nashville, Tennessee
Robert C. Hilton, 60 1981 Chairman, President and CEO of Home
Director Technology Healthcare, Inc., Nashville,
Tennessee since October 1991
Charles E. Jones, Jr., 52 1981 President, Corporate Communications,
Director Inc., a financial public relations
firm, Nashville, Tennessee
Charles T. Lowe, Jr., 65 1970 Retired in 1993; previously President
Director of Travel World, Inc., a travel agency,
Lebanon, Tennessee
B. F. Lowery, 60 1971 Attorney; President and Chairman,
Director LoJac Companies, asphalt paving,
highway construction and building
materials supplier and contractor,
Lebanon, Tennessee
Ronald N. Magruder, 50 1995 President and Chief Operating Officer
Director, President and of the Company since August 1995;
Chief Operating Officer Vice-Chairman of Darden Restaurants
from December 1994 to August 1995;
Executive Vice President, General Mills
Restaurants and President of Olive
Garden from 1987 to 1994
Gordon L. Miller, 63 1974 Dentist, Lebanon, Tennessee
Director
Martha M. Mitchell, 57 1993 Senior Vice President (since January
Director 1987) and Partner (since January 1993)
of Fleishman-Hillard, a public
relations firm, St. Louis, Missouri
Jimmie D. White, 56 1993 Retired on December 11, 1995;
Director Senior Vice President - Finance and
Chief Financial Officer of the
Company from 1985 to 1995
______________________________
</TABLE>
(1) Dan W. Evins and Edgar W. Evins are brothers.
Committees and Meetings
During the fiscal year ended August 1, 1997, the Board of Directors
held five meetings. No incumbent director attended fewer than 75% of the
Board meetings in fiscal 1997.
The Executive Committee is currently composed of Robert V. Dale, Dan
W. Evins, Charles E. Jones, Jr., B. F. Lowery, Ronald N. Magruder, Charles
T. Lowe, Jr. and Martha M. Mitchell. The Executive Committee has all the
duties and powers of the Board of Directors, subject to the general
direction, approval and control of the Board. The Executive Committee met
six times in fiscal year 1997.
<PAGE> 4
The Stock Option Committee is currently composed of Robert C. Hilton,
James C. Bradshaw and William D. Heydel. This committee, which met once
during the fiscal year ended August 1, 1997, is responsible for the
administration of the Company's Incentive Stock Option Plan of 1982, its
1987 Stock Option Plan and its Amended and Restated Stock Option Plan.
The Audit Committee is currently composed of Robert C. Hilton, James
C. Bradshaw, Robert V. Dale and Gordon L. Miller. This committee, which
met three times during the fiscal year ended August 1, 1997, reviews the
Company's internal accounting controls and systems, the results of the
Company's annual audit and the Company's accounting policies and any change
in those policies.
The Compensation Committee is currently composed of Robert V. Dale,
Edgar W. Evins, William D. Heydel and Robert C. Hilton. This committee,
which met once during the fiscal year ended August 1, 1997, reviews and
recommends to the Board of Directors the salaries, bonuses and other cash
compensation of the executive officers of the Company.
The Nominating Committee is currently composed of Robert V. Dale, B.F.
Lowery, Charles E. Jones, Jr., Martha M. Mitchell, Dan W. Evins, Edgar W.
Evins, and Robert C. Hilton. The Nominating Committee reviews director
nominees and makes recommendations to the Board of Directors prior to each
Annual Meeting of shareholders. The Nominating Committee will consider
nominees recommended in writing by shareholders who submit director
nominations to the Company prior to the deadline for shareholder proposals
as further described under "Proposals of Shareholders" later in this
document.
The Company pays to each of its outside directors an annual retainer
of $20,000 plus $1,000 as a director's fee for each Board meeting attended.
Outside directors who are members of the Executive Committee, Audit
Committee, Compensation Committee and Stock Option Committee receive a fee
of $1,000 for each committee meeting attended. The chairperson of these
committees receives an additional fee of $200 for each committee meeting
attended. All outside directors are reimbursed by the Company for out-of-
pocket expenses incurred in connection with attendance at meetings. No
director's fees are paid to directors who are also employees of the
Company.
<PAGE> 5
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
Security Ownership of Certain Beneficial Owners
The following information pertains to Company Common Stock
beneficially owned, directly or indirectly, by 5% or greater shareholders
as reported to the Company by NASD.
Percent
Name and Address Amount and Nature of of Class
of Beneficial Owner Beneficial Ownership (Common Stock)
___________________ ____________________ ______________
Montag & Caldwell Inc. 4,985,000 8.1%
3343 Peachtree Rd. N.E.
Atlanta, GA 30326
Security Ownership of Management
The following information pertains to Company Common Stock
beneficially owned, directly or indirectly, by all directors and nominees
and by all directors and officers as a group, as of September 29, 1997.
Unless otherwise noted, the named persons may be contacted at the Company's
executive offices and they have sole voting and investment power with
respect to the shares indicated.
Percent
Names of Amount and Nature of Of Class
Beneficial Owners Beneficial Ownership (1) (Common Stock)
__________________ ________________________ ______________
James C. Bradshaw 545,719 (2) *
Robert V. Dale 104,728 *
Dan W. Evins 696,666 1.1%
Edgar W. Evins 69,157 (3) *
William D. Heydel 543,327 (2) *
Robert C. Hilton 99,299 *
Charles E. Jones, Jr. 102,761 *
Charles T. Lowe, Jr. 914,025 (4) 1.5%
B. F. Lowery 240,125 *
Ronald N. Magruder 344,134 *
Gordon L. Miller 167,167 *
Martha M. Mitchell 41,872 *
Jimmie D. White 30,290 *
All Officers and Directors
as a group (39 persons) 4,686,333 7.1%
*Less than one percent
- ----------------------
<PAGE> 6
(1) Includes the following number of shares subject to options exercisable
by the named holders within 60 days:
James C. Bradshaw 142,670 Charles T. Lowe, Jr. 66,734
Robert V. Dale 92,046 B. F. Lowery 142,670
Dan W. Evins 256,666 Ronald N. Magruder 273,334
Edgar W. Evins 66,734 Gordon L. Miller 66,734
William D. Heydel 142,670 Martha M. Mitchell 41,422
Robert C. Hilton 92,046 Jimmie D. White -
Charles E. Jones, Jr. 92,046
All Officers and Directors as a group 2,104,681
The shares described in this note are deemed to be outstanding for the
purpose of computing the percentage of outstanding Common Stock owned
by each named individual and by the group, but are not deemed to be
outstanding for the purpose of computing the percentage ownership of
any other person.
(2) Includes shares owned jointly with spouse, with whom voting and
investment power is shared: Dr. Bradshaw 403,049 and Mr. Heydel
400,657.
(3) Includes 223 shares owned by Mr. Evins' wife in her SEP, for which
voting and investment power is shared.
(4) Voting and investment power with respect to 43,491 shares is shared by
Mr. Lowe and his wife, the owner of these shares.
REPORT OF THE COMPENSATION COMMITTEE AND THE
STOCK OPTION COMMITTEE OF THE BOARD OF DIRECTORS
ON EXECUTIVE COMPENSATION
The Company's compensation policies for its executive officers are
administered by two committees of the Board of Directors - the Compensation
Committee and the Stock Option Committee. All members of these committees
are outside, non-employee directors.
The primary components of executive compensation are base salary,
bonus and longer-term incentives such as stock options. The Compensation
Committee recommends to the Board of Directors the salaries and bonus plan
for the executive officers. The Stock Option Committee administers the
stock option plans pursuant to which all employee stock options are
granted.
Base Salary
In setting the fiscal 1997 base salary for each executive officer, the
Compensation Committee reviewed the then-current salary for each of the
officers in relation to average salaries within the industry for comparable
<PAGE> 7
areas of responsibility as presented in a report prepared for the Company
by independent executive compensation consultants. In addition, the
Compensation Committee considered the contribution made by each executive
officer during fiscal 1996, as reported by the Chief Executive Officer, as
well as salary recommendations from management for the executive officers
other than the Chairman and Chief Executive Officer, Dan W. Evins. The
Compensation Committee employed procedures similar to those used for each
of the other executive officers to determine the fiscal 1997 salary for Dan
W. Evins.
Bonus
The Compensation Committee has determined that the financial
performance of the Company should be a significant factor in rewarding its
executive officers. Therefore, in July of each year, the Compensation
Committee reviews the expected financial performance of the Company for the
concluding fiscal year and considers the internal budget established for
the next fiscal year in setting certain financial goals and criteria for
executive officer bonuses.
In fiscal 1997, the Company operated pursuant to a Management
Incentive Plan affecting executive officers and senior managers. The
purpose of the Management Incentive Plan is to link individual job
performance and resulting compensation to the financial performance of the
Company. This ensures that all participants achieve individual goals while
remaining focused on the Company's overall financial results. The Plan is
also designed to ensure that participants' financial interests remain
directly tied to those of Cracker Barrel's shareholders. A participant's
target bonus percentage varies based on salary grade level.
Generally, bonus awards are calculated based on the following factors:
(i) Company financial results compared to the Company's business plan, (ii)
individual performance against his or her stated goals, (iii) the
individual's fiscal year base salary amount, and (iv) the individual's
target bonus percentage. Maximum bonus percentages available to executive
officers range from 75% to 225% of base salary (225% for Mr. Evins, 180%
for Mr. Magruder, and Mr. Woodhouse, 135% for Mr. Adkins and Mr. Parsons,
105% for all other senior officers, and from 75% to 105% for all other
executive officers.) Bonuses earned for fiscal 1997, as a percent of total
salary and bonuses, were 146% for Mr. Evins, 117% for Mr. Magruder, 117%
for Mr. Woodhouse, 91% for Mr. Adkins, and 90% for Mr. Parsons.
Stock Options
In contrast to salary and bonus awards, which are generally for past
work performance, stock options are based on future performance which
contributes to stock price appreciation. They are granted at an exercise
price which is equal to the closing market price of the Company's Common
Stock on the day before the date of grant, and therefore have no value
until the stock trading price increases.
The Stock Option Committee has generally granted nonqualified stock
options annually. In recent years, the Committee has extended option
grants down into the organization as far as the top hourly level positions
in the stores. See "Stock Option Plans" later in this document.
<PAGE> 8
Stock Performance Graph
The following graph sets forth the yearly percentage change in the
cumulative total shareholder return on the Company's Common Stock during
the preceding five fiscal years, ended August 1, 1997, compared with the
Standard & Poor's 400 MidCap Index and a Total Return Index comprised of
all NASDAQ companies with the same two-digit SIC (Standard Industrial
Classification) code (58 - Eating and Drinking Places) as the Company.
<TABLE>
<CAPTION>
1992 1993 1994 1995 1996 1997
_____________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
Cracker Barrel Old Country Store, Inc. 100 117 104 94 99 130
NASDAQ 100 117 106 119 115 105
S & P 400 MIDCAP 100 117 121 150 162 236
_____________________________________________________________________________
</TABLE>
<PAGE> 9
Summary Compensation Table
The following table sets forth information concerningthe compensation
of the Chief Executive Officer and the four other most highly compensated
executive officers who served in such capacities as of August 1, 1997.
<TABLE>
<CAPTION>
Long Term
Annual Compensation Compensation
Securities Other
Underlying Restricted Annual
Principal Fiscal Options Stock Compensa-
Name Position Year Salary(1) Bonus Granted Awards(1) tion(2)
____ ________ ____ _________ _____ _______ _________ _______
<S> <C> <C> <C> <C> <C> <C> <C>
Dan W. Evins Chairman of the 1997 $385,000 $545,613 40,000 - $ 31,439
Board and Chief 1996 385,000 299,330 40,000 - 30,754
Executive Officer 1995 385,000 661,495 40,000 - 28,541
Ronald N. Magruder President and Chief 1997 350,000 396,809 35,000 - 104,814
Operating Officer 1996 344,697 217,694 285,000 $656,000 1,740
1995 - - - - -
Michael A. Woodhouse Senior Vice President/ 1997 231,000 261,894 25,000 - 95,762
Finance and Chief 1996 141,667 110,000 25,000 93,750 10,310
Financial Officer 1995 - - - - -
Michael D. Adkins Senior Vice President/ 1997 165,000 158,776 20,000 - 6,096
Restaurant Operations 1996 150,000 46,649 12,000 - 5,792
1995 125,000 85,908 12,000 - 5,606
Richard G. Parsons Senior Vice President/ 1997 167,400 146,442 20,000 - 7,835
Merchandising 1996 155,000 48,204 12,000 - 7,522
1995 155,000 106,526 12,000 - 7,596
</TABLE>
(1) On August 7, 1995, the effective date of Mr. Magruder's employment with
the Company, he received a restricted stock award of 32,000 shares worth
$656,000 based on the value of Company Common Stock on July 5, 1995. The
shares vest at a rate of 20% per annum, and based on the value of Company
Common Stock at the end of fiscal 1997, were worth $926,000. On December
11, 1995, the effective date of Mr. Woodhouse's employment with the
Company, he received a restricted stock award of 5,000 shares worth
$93,750 based on the value of Company Common Stock on December 8, 1995.
These shares vest at a rate of 20% per annum, and based on the value of
Company Common Stock at the end of fiscal 1997, were worth $144,688. No
dividends are paid on these restricted shares until the shares actually
vest.
(2) Includes premiums paid on Life and Disability insurance for coverage above
that available to all salaried employees of $29,893 for Mr. Evins, $1,740
for Mr. Magruder, $18,117 for Mr. Woodhouse, $4,418 for Mr. Adkins, and
$6,663 for Mr. Parsons; the Company's contributions to its 401(k) Employee
Savings Plan for each named officer, and moving expenses paid or accrued
by the Company in fiscal 1997 of $100,157 for Mr. Magruder and $77,645
for Mr. Woodhouse.
<PAGE> 10
Options Granted During Fiscal Year Ended August 1, 1997
The following table sets forth all options to acquire shares of
Company Common Stock granted to the named executive officers during the
fiscal year ended August 1, 1997.
<TABLE>
<CAPTION>
Individual Grants (1)
___________________________________________
Potential Realizable Value
% of Total at Assumed Annual Rates
Options Exercise of Stock Price Appreciation
# Granted to or Base for Option Term (2)
Options Employees in Price Expiration ___________________________
Name Granted Fiscal Year $/Share Date 5% 10%
____ _______ ___________ _______ ____ __ ___
<S> <C> <C> <C> <C> <C> <C>
Dan W. Evins 40,000 3.1% $22.75 08-29-06 $572,294 $1,450,306
Ronald N. Magruder 35,000 2.7% 22.75 08-29-06 500,757 1,269,017
Michael A. Woodhouse 25,000 1.9% 22.75 08-29-06 357,684 906,441
Michael D. Adkins 20,000 1.5% 22.75 08-29-06 286,147 725,153
Richard M. Parsons 20,000 1.5% 22.75 08-29-06 286,147 725,153
</TABLE>
(1) The exercise price of the options granted is equal to the closing market
price of the Company's Common Stock on the day before the date of grant.
Options are exercisable as to not more than 1/3 of the total number of
shares under the option during each 12-month period following one year from
the date of grant for all options granted during the fiscal year ended
August 1, 1997. To the extent any optionee does not exercise an option as
to all shares for which the option was exercisable during any 12-month
period, the balance of the unexercised options shall accumulate and the
option with respect to those shares will be exercisable at any later time
before expiration. Options expire 10 years from the date of the grant.
(2) The potential realizable values illustrate values that might be realized
upon exercise immediately prior to the expiration of the term of these
options using 5% and 10% appreciation rates, as required by the Securities
and Exchange Commission, compounded annually. These values do not, and
are not intended to, forecast possible future appreciation, if any, of the
Company's stock price. Additionally, these values do not take into
consideration the provisions of the options providing for vesting over a
period of years or termination of options following termination of
employment.
<PAGE> 11
Option Exercises and Fiscal Year End Values
The following table sets forth all stock options exercised during the
fiscal year ended August 1, 1997 by the named executive officers and
the number and value of unexercised options held by these executive officers
at fiscal year end.
<TABLE>
<CAPTION>
Value of Unexercised
#Shares Number of Unexercised In-The-Money Options at
Acquired on Value Options at FY-End FY-End (2)
Exercise Realized(1) Exercisable Unexercisable Exercisable Unexercisable
________ ___________ ___________ _____________ ___________ _____________
<S> <C> <C> <C> <C> <C> <C>
Dan W. Evins 0 0 243,333 66,667 $1,651,455 $ 509,170
Ronald N. Magruder 0 0 178,334 141,666 1,499,901 1,138,224
Michael A. Woodhouse 0 0 8,333 41,667 84,892 324,483
Michael D. Adkins 0 0 41,125 28,000 230,742 202,250
Richard M. Parsons 12,000 $327,362 176,780 28,000 2,903,076 202,250
</TABLE>
(1) Value realized is calculated based on the difference between the option
exercise price and the actual sales price of shares sold, and the market
value of Company Common Stock on the date of exercise for 3,500 shares
acquired upon exercise but not sold by Mr. Parsons.
(2) The last trade of the Company's Common Stock as reported by NASDAQ on
August 1, 1997 was $28.9375. That price was used in calculating the value
of unexercised options.
Executive Employment Agreements
An employment agreement has been granted to Dan W. Evins
(Chairman of the Board and Chief Executive Officer) which, upon
the occurrence of certain events, authorizes a severance payment
approximately equal to three times his annual salary in effect on
the date of termination. Although not intended primarily as a
standard employment contract, the agreement does provide for
payment of a specified annual salary which shall not be
decreased, and which may be increased from time to time. This
agreement does not preclude Mr. Evins' from participating in any
other Company benefit plans or arrangements. Under the agreement,
Mr. Evins may terminate his employment and receive the three-year
severance payment if there is a "change in control of the
Company" (as defined in the agreement), accompanied by: (1) a
decrease in his base salary or bonus percentage; or (2) a
reduction in the importance of his job responsibilities; or (3) a
geographical relocation without his consent. The three- year
severance payment shall also be made to Mr. Evins if the Company
breaches the terms of the agreement. The employment agreement
also describes rights to compensation if Mr. Evins' employment is
terminated or suspended due to death, disability, poor
performance or wrongful activities.
<PAGE> 12
Effective August 7, 1995, the Company employed Mr. Ron Magruder
as its Chief Operating Officer. On the date he signed his offer
of employment, July 5, 1995, he was awarded an option under the
1987 Stock Option Plan for 250,000 shares of Company Common Stock
at the market closing price on the previous day. These options
vest at a rate of 1/3 each year and expire 10 years from the date
of grant. To remedy Mr. Magruder's loss of non-vested options in
the stock of his former employer, the Company provided him 32,000
shares of restricted Common Stock which vests at 20% each year.
If Mr. Magruder's employment is involuntarily terminated for
performance rather than for cause, the Company will provide him a
severance package consisting of one year's base salary and
estimated bonus, as well as $600,000. That amount decreases by
20% per year from the date of employment. Mr. Magruder was also
provided with funds to pay for his relocation to Tennessee, which
accrued in the amount of $100,157 in fiscal 1997.
Effective December 11, 1995, the Company employed Mr. Michael
Woodhouse as Senior Vice President of Finance and Chief Financial
Officer. Mr. Woodhouse was granted an option under the 1987
Stock Option Plan for 25,000 shares of Company Common Stock on
his start date, with the option vesting at a rate of 1/3 each
year following one year from the grant date and expiring 10 years
after the date of grant. To remedy Mr. Woodhouse's loss of non-
vested options in the stock of his former employer, the Company
granted him 5,000 shares of restricted Common Stock which vests
at 20% per year. Mr. Woodhouse was also provided with funds to
pay for his relocation to Tennessee, which accrued in the amount
of $77,645 in fiscal 1997.
Stock Option Plans
On February 25, 1982, the Company's Board of Directors adopted
an incentive stock option plan, which was approved by the
shareholders of the Company on November 23, 1982. The 1982 Plan
authorized the Stock Option Committee to issue options to certain
key employees for 2,475,095 shares of the Company's Common Stock,
which were all granted prior to adoption of the 1987 Stock Option
Plan and have been exercised. In 1986, Congress adopted the Tax
Reform Act of 1986, and in response to the 1986 Code amendments,
the Company's Board of Directors voted to discontinue the 1982
Plan and adopt in its place the 1987 Stock Option Plan. The
shareholders adopted the 1987 Plan at the 1987 Annual Meeting of
shareholders.
The 1987 Plan would have expired on June 25, 1997. The
Company's Board of Directors proposed that the 1987 Plan be
amended and that it be retitled the Cracker Barrel Old Country
Store, Inc. Amended and Restated Stock Option Plan (the "Current
Plan"). The Board of Directors approved the adoption of the
Current Plan on August 29, 1996 and the Company's shareholders
approved the Current Plan on November 26, 1996. The Current Plan
makes only non-qualified options available for grant, allows for
the possibility of transferability and assignability of options,
and is designed to facilitate continued compliance with Section
16 of the Securities Exchange Act of 1934, particularly Rule 16b-
3.
<PAGE> 13
The Current Plan, like the 1987 Plan and the 1982 Plan, is
administered by the Stock Option Committee. Members of that
Committee are directors appointed by the Board. Options may be
granted only to key executive personnel and other employees who
hold responsible positions with the Company. The Stock Option
Committee is authorized to determine, at time periods within its
discretion and subject to the direction of the Board, which key
employees shall be granted options, the number of shares covered
by each option granted, and within applicable limits, the terms
and conditions relating to the exercise of options. The Stock
Option Committee may impose on the option, or its exercise,
restrictions it deems reasonable and which are within the
restrictions authorized by the Current Plan. The option price per
share under the Current Plan must be at least 100% of the fair
market value of a share of the Company's Common Stock at the
close of business on the trading day immediately preceding the
day the option is granted, and options must be exercised not
later than 10 years after the grant date.
The Stock Option Committee is authorized to grant options to
purchase an aggregate of 14,025,702 shares of Company Common
Stock under the Current Plan. For information concerning the
proposed increase in the number of shares available under the
Current Plan, see: "Proposal 2. Increase Number of Shares of
Common Stock Available Under Amended and Restated Stock Option
Plan" later in this document. During fiscal 1997, the aggregate
number of shares subject to options granted was 1,296,600,
including 262,000 shares granted to the Company's executive
officers as a group, which includes the individuals named in the
Summary Compensation Table. These options were granted at prices
ranging from $21.875 to $28.375 per share, pursuant to the
Current Plan and are exercisable as to not more than 1/3 of the
total number of shares granted during each 12-month period
following one year from the date of the grant. To the extent,
however, that any optionee does not exercise an option as to all
shares for which the option was exercisable during any 12-month
period, the balance of unexercised options shall accumulate and
the option will be exercisable with respect to those shares until
the option expires.
The aggregate number of shares exercised pursuant to all
employee stock option plans during fiscal 1997 was 422,131,
including 37,000 exercised by the Company's executive officers as
a group. The net value of shares purchased (market value less
option exercise price) or cash realized upon exercise of options
was $4,290,520 in the aggregate, including $700,762 relating to
options exercised by the Company's executive officers as a group.
In 1989, the directors and shareholders of the Company adopted
the 1989 Stock Option Plan for Non-Employee Directors (the "1989
Plan"). The total number of shares of Company Common Stock
issuable upon the exercise of all options granted under the 1989
Plan could not, in the aggregate, exceed 1,518,750 shares. Under
the 1989 Plan, all non-employee directors of the Company
automatically received an annual stock option grant for 25,312
shares of the Company's Common Stock. There are no shares now
available to be granted under the 1989 Plan. 1989 Plan options
became exercisable 6 months after the date of each grant. The
stock options were granted at an exercise price equal to the fair
market value of the underlying stock on the date of grant and
expire one year from the date of a director's retirement from the
Board. Mr. James H. Stewart, who retired from the Board of
Directors on November 26, 1996, exercised options under the 1989
Plan on 41,422 shares of Common Stock in fiscal 1997. The net
value from those exercised options (market value less option
exercise price) was $140,663.
<PAGE> 14
Employee Savings Plans
401(k) Employee Savings Plan - On September 24, 1996, the Board of
Directors adopted the Godwins, Booke & Dickenson Prototype Profit-
Sharing and Employee Savings Plan and Trust (the "401(k) Plan")
as an Employee Savings Plan which provides for retirement
benefits for employees, and which is qualified under Section
401(k) of the Internal Revenue Code. Generally, all Company
employees who have completed one year of service, who have worked
in excess of 1,000 hours with the Company, and who have reached
the age of 21, are eligible to participate. Eligible employees
may elect to participate in the 401(k) Plan as of the beginning
of each calendar month.
Eligible employees who choose to participate may elect to have up
to 16% (not to exceed $9,500 in calendar 1997) of their
compensation contributed to the 401(k) Plan. The Company matches
25% of employee contributions for each participant, up to 6% of
the employee's compensation. In addition to these limits,
employee contributions and the Company match for highly
compensated participants are limited by a special annual
nondiscrimination test imposed under Section 401(k) of the
Internal Revenue Code. This test uses the percentages of
compensation contributed by, and matched for, rank and file
participants to limit the contributions of, and Company match
for, highly compensated participants.
Participants in the 401(k) Plan have a fully-vested interest in
their contributions. A participant's interest in Company
matching contributions begins to vest one year from the date of
employment and continues to vest at the rate of 20% per year
until fully vested. Generally participants may self-direct
investments in one or more available mutual funds, but they may
not withdraw either their contributions or their vested interest
in Company matching contributions prior to retirement or
termination of their employment with the Company. Limited
hardship withdrawals are tightly controlled by the provisions of
the 401(k) Plan and the Internal Revenue Code.
Deferred Compensation Plan - Effective January 1, 1994, the
Company's Board of Directors adopted a Deferred Compensation Plan
to provide retirement and incidental benefits for certain
executive employees and outside directors of the Company. At the
beginning of each calendar year, participants in this plan may
make an election to defer a portion of their compensation.
Interest is credited to each participant's account quarterly at a
rate equal to the 10-year Treasury Bill rate in effect as of the
beginning of the quarter, plus 1.5%. The total interest credited
to all participants' accounts during fiscal 1997 was $48,365.
Non-Qualified Savings Plan - On December 21, 1995, the Company's
Board of Directors adopted a Non-Qualified Savings Plan (the
"Savings Plan") which became effective January 1, 1996. The
Savings Plan is intended primarily to encourage savings on the
part of a small group of management and highly compensated
Company employees, who typically receive refunds from the
Company's 401(k) Plan due to the required annual
nondiscrimination test imposed under Section 401(k) of the
Internal Revenue Code. In the discretion of the Company's
Compensation Committee, other Company employees may also
participate in the Savings Plan. Fundamentally, the Savings Plan
allows participants to annually defer from 1% to 50% of their
salary and bonus. Employee contributions are placed in a Company
trust and are invested in a selection of mutual funds. The
Company may in its discretion match employee contributions for
each participant, up to 6% of the employee's compensation.
Employees are at all times fully vested in their savings
<PAGE> 15
contributions, but only become vested in any Company match in
increments of 20% per year. Currently, there is no Company
matching contribution.
OTHER TRANSACTIONS AND RELATIONSHIPS
The Company leases its stores in Clarksville, Tennessee and
Macon, Georgia from B. F. Lowery, a director of the Company.
Under the terms of an August 1981 agreement, Mr. Lowery purchased
the land, constructed the restaurant buildings and facilities to
the Company's specifications and leased the stores to the Company
for a 15-year term. The annual rent for the Macon store is the
greater of (i) 12% of the total initial cost of the land,
buildings and improvements, or (ii) 5% of the total restaurant
sales plus 3% of the gift shop sales. The annual rent for the
Clarksville store is the greater of (i) 12% of the total initial
cost of the land, building and improvements, or (ii) 5% of the
total restaurant sales plus 3% of the gift shop sales, if the
total of those percentages exceeds $65,000. Taxes, insurance and
maintenance are paid by the Company. The Company has options to
extend the Clarksville and Macon leases for up to 20 years.
During the fiscal year ended August 1, 1997, the Company paid a
total of $373,801 in lease payments to Mr. Lowery. During the
fiscal year ended August 1, 1997, the Company paid $75,000 as a
retainer to Mr. Lowery for corporate legal services. The Company
also rented Mr. Lowery's personal jet for Company use throughout
the year while the Company jet was undergoing maintenance or
repairs. The cost for the aircraft rental was $22,750.
The Company uses the services of Corporate Communications,
Inc., a financial public relations firm in Nashville, Tennessee,
of which Charles E. Jones, Jr., a director of the Company, is
president and the major shareholder. During the past fiscal
year, the Company paid $24,000 to Corporate Communications, Inc.
for services and $423,924 for reimbursement of direct expenses
including preparation, distribution and design of the Company's
annual report, proxy materials, and quarterly reports.
The foregoing transactions were negotiated by the Company on an
arms-length basis, and management believes that these
transactions are fair and reasonable and on terms no less
favorable than those which could be obtained from unaffiliated
parties.
<PAGE> 16
PROPOSAL 2. INCREASE NUMBER OF SHARES OF COMMON
STOCK AVAILABLE UNDER AMENDED AND RESTATED
STOCK OPTION PLAN
On September 25, 1997, the Board of Directors approved an
amendment to the Cracker Barrel Old Country Store, Inc. Amended
and Restated Stock Option Plan, increasing the number of shares
authorized under that Plan from 14,025,702 to 17,525,702, subject
to shareholder approval. Options under this Stock Option Plan
may be granted to key executive personnel and to other employees
holding responsible positions with the Company, which includes
store-level management and the highest level of hourly employees
in the stores. The proposed increase in the number of shares
authorized is to ensure the existence and availability of
sufficient shares for the granting of options under this Stock
Option Plan in the future.
For adoption of this proposal, the votes cast favoring the
proposal must exceed the votes cast opposing it. The Board of
Directors recommends that shareholders vote "FOR" the proposal.
Proxies, unless they contain contrary written instructions, will
be voted "FOR" the proposal.
PROPOSAL 3. APPROVAL OF APPOINTMENT OF AUDITORS
The Board of Directors has selected and appointed Deloitte &
Touche LLP as independent auditors of the Company for the 1998
fiscal year, subject to shareholder approval. Deloitte & Touche
LLP have served as the Company's independent auditors since the
fiscal year ended July 31, 1973. A representative of Deloitte &
Touche LLP is expected to be present at the Annual Meeting with
the opportunity to make a statement, if the representative
desires, and to be available to respond to appropriate questions.
For adoption of this proposal, the votes cast favoring the
proposal must exceed the votes cast opposing it. The Board of
Directors recommends that shareholders vote "FOR" the proposal.
Proxies, unless they contain contrary written instructions, will
be voted "FOR" the proposal.
PROPOSAL 4. SHAREHOLDER PROPOSAL
Mercy Consolidated Asset Management Program, 20 Washington
Square North, New York, NY, has stated that it is the beneficial
owner of 2,000 shares of Company Common Stock, and the New York
City Employees' Retirement System, Office of the Comptroller, 1
Centre Street, New York, NY 10007, has stated that it is the
beneficial owner of 156,984 shares of Company Common Stock and
they have each informed the Company that they intend to present
the following proposal at the Annual Meeting:
WHEREAS, recruitment of employees from the widest possible
talent pool available can help promote efficiency in corporate
operations,
<PAGE> 17
WHEREAS, hiring policies based on non-job related criteria can
lead to less efficient operations, and
WHEREAS, lower efficiency in corporate operations can in turn
lead to a loss in shareholder value,
RESOLVED, that shareholders hereby request that the
Compensation and Stock Option committees in determining levels of
executive compensation, consider corporate progress towards
ensuring that management policies are designed to recruit workers
from the broadest possible talent pool, without regard to race,
color, creed, gender, age, or sexual orientation.
For adoption of this proposal, the votes cast favoring it must
exceed the votes cast opposing it. The Board of Directors
recommends a vote "AGAINST" this proposal for the reasons cited
below. Proxies, unless they contain contrary written
instructions, will be voted "AGAINST" the proposal.
The Company's Position
The Company's compensation policies for its executive officers
are administered by two committees of the Board of Directors -
the Compensation Committee and the Stock Option Committee. To
help ensure impartiality, the members of these committees are
outside, non-employee directors. A survey prepared by outside,
independent executive compensation consultants, Alexander &
Alexander, in fiscal 1997 is used to review the Company's
executive salaries and bonuses in relation to those of other
selected companies in the restaurant and food service industry.
In addition, executive officers participate in the Company's
Management Incentive Program which is designed to substantially
tie individual compensation to actual Company financial
performance. The Board of Directors believes that this process
of setting executive compensation addresses overall job
performance and serves to enhance company profitability and
shareholder value. While an executive's ability to recruit the
most capable workers, from whatever sector of society, is
certainly an asset which may be considered in the compensation
evaluation process, since the company hires from geographically
and demographically distinct areas, since the Company already
adheres to equal opportunity hiring policies, and since
"progress" is impossible to measure unless some quantifiable but
undefined numerical or similar goals were to be established, the
Board does not feel that social issues should be specifically
singled out for separate consideration within the context of the
business judgment involved in setting executive compensation.
The Board of Directors for these reasons, recommends a vote
"AGAINST" this shareholder proposal.
<PAGE> 18
PROPOSALS OF SHAREHOLDERS
Shareholders intending to submit proposals for presentation at
the Company's 1998 Annual Meeting of Shareholders, and for
inclusion in the Proxy Statement and form of proxy for that
meeting, should forward their proposals to the Corporate
Secretary, Cracker Barrel Old Country Store, Inc., P.O. Box 787,
Hartmann Drive, Lebanon, Tennessee 37088-0787. Shareholder
proposals must be in writing, should be sent to the Company by
certified mail, return receipt requested, and must be received by
the Company prior to June 26, 1998.
ANNUAL REPORT AND FINANCIAL INFORMATION
A copy of the Company's Annual Report to Shareholders for fiscal
year 1997 is being mailed to each shareholder with this Proxy
Statement. A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K,
AND A LIST OF ALL ITS EXHIBITS, WILL BE SUPPLIED WITHOUT CHARGE
TO ANY SHAREHOLDER UPON WRITTEN REQUEST TO THE COMPANY AT ITS
PRINCIPAL EXECUTIVE OFFICES: CRACKER BARREL OLD COUNTRY STORE,
INC. ATTENTION: INVESTOR RELATIONS, PO BOX 787, LEBANON,
TENNESSEE 37088-0787. EXHIBITS TO THE FORM 10-K ARE AVAILABLE
FOR A REASONABLE FEE.
