1


                      SECURITIES AND EXCHANGE COMMISSION

                            Washington, D.C. 20549
                                  __________

                                  FORM 10-K
         (Mark One)
         [x]     Annual Report Pursuant to Section 13 or 15(d) of 
                 The Securities Exchange Act of 1934 (Fee Required)

         [ ]     Transition report pursuant to Section 13 or 15(d) of the
                 Securities Exchange Act of 1934 (No Fee Required)

               For the transition period from _______ to _______

        For fiscal year ended                     Commission file number
        July 29, 1994                                     0-7536

                                   __________
                                      
                    CRACKER BARREL OLD COUNTRY STORE, INC.
            (Exact name of registrant as specified in its charter)

            Tennessee                                    62-0812904 
(State or other jurisdiction of                     (I.R.S. Employer 
incorporation or organization)                      Identification Number)

Hartmann Drive,  P.O. Box 787                            37088-0787 
Lebanon, Tennessee                                       (Zip code) 
(Address of principal
executive offices) 
                                  __________

             Registrant's telephone number, including area code:

                                (615)444-5533
                                   __________
                                      
         Securities registered pursuant to Section 12(b) of the Act:

                                     None
                                  __________

         Securities registered pursuant to Section 12(g) of the Act:
                                 Common Stock
                               (Par Value $.50)
                                  __________

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days.
                               Yes   X     No 
                                    ---       ---
The aggregate market value of voting stock held by nonaffiliates of the
registrant is $1,337,481,709 as of September 26, 1994.

                                  59,911,166                                
- - --------------------------------------------------------------------------------
  (Number of shares of common stock outstanding as of September 26, 1994.)





                                      1
   2


                     Documents Incorporated by Reference

Document from which Portions Part of Form 10-K are Incorporated by Reference to which incorporated - - ----------------------------- --------------------- 1. Annual Report to Shareholders Items 6, 7 and 8 for the fiscal year ended July 29, 1994 2. Proxy Statement for Annual Part III Meeting of Shareholders to be held November 22, 1994
2 3 PART I ITEM 1. BUSINESS Cracker Barrel Old Country Store, Inc. (the "Company" or "Cracker Barrel") was incorporated in October 1969 under the laws of the State of Tennessee. The Company owns and operates 191 full service "country store" restaurants which are located in the southeast, midwest, mid- atlantic and southwest United States along interstate highways, including 5 stores located at "tourist destinations". These family restaurants serve breakfast, lunch and dinner between the hours of 6:00 a.m. and 10:00 p.m. and feature home style country cooking prepared on the premises from the Company's own recipes using quality ingredients and emphasizing authenticity. Menu items are moderately priced and include country ham, chicken, fish, barbecue pork ribs, roast beef, beans, turnip greens, vegetable plates, sandwiches, pancakes, eggs, bacon, sausage and grits. The restaurants do not serve alcoholic beverages. The stores are constructed in a rustic, country store design and feature a separate gift shop area offering a wide variety of items specializing in hand-blown glassware, cast iron cookware, toys and wood crafts as well as various old fashioned candies, jellies and other foods. The Company considers its store operations to constitute an integrated, single line of business. Operations Store Format: The format of each of Cracker Barrel's stores consists of a rustic, country store style building. All stores are free standing buildings with adequate parking facilities and standard landscaping. Store interiors are subdivided into a dining area consisting of approximately 25% of the total interior store space, a gift shop area consisting of approximately 22% of such space, with the balance primarily consisting of kitchen and storage areas. All stores have wood-burning fireplaces and are decorated with antique-style furnishings and other authentic items of the past similar to those used and sold in original old country stores. The kitchen areas contain modern food preparation and storage equipment allowing for extensive flexibility in menu variation and development. Products: Cracker Barrel's restaurants offer rural Southern cooking featuring the Company's own recipes. In keeping with the Company's emphasis on authenticity and quality, Cracker Barrel's restaurants prepare menu selections on the premises. The Company's restaurants offer breakfast, lunch and dinner from a moderately-priced menu. Most items may be ordered at any time throughout the day. Breakfast items include juices, eggs, pancakes, bacon, country ham, sausage, grits, and a variety of biscuit specialties, with prices for a breakfast meal ranging from $1.29 to $6.99. Lunch and dinner items include country ham, catfish, steak, barbecue pork ribs, chicken, vegetable plates, baked potatoes, salads, sandwiches, homemade soups and specialty items such as beef stew with muffins. Lunches and dinners range in price from $2.99 to $10.95. The Company from time to time increases its prices and increased its menu prices approximately 3% in February 1994. The gift shops, which are decorated with antique signs, primitive tools and other memorabilia in a turn-of-the-century atmosphere, offer a wide variety of items consisting primarily of hand-blown glassware, cast iron cookware, old-fashioned crockery, handcrafted figurines, classic children's toys and various other gift items, as well as various candies, preserves, smoked sausage, syrups and other foodstuffs. Many of the candy items, smoked bacon, jellies and jams along with other high quality products are sold under the Cracker Barrel Old Country Store brand name. 3 4 Product Merchandising: Cracker Barrel maintains a quality control department which also develops new and improved menu items in response to shifts in customer preferences and changes in supply of ingredients used in the Company's menu items. Company merchandising specialists are involved on a continuing basis in selecting and positioning of merchandise in the gift shop areas. Management believes that the Company has adequate flexibility to meet future shifts in consumer preference on a timely basis. Store Management: Store management typically consists of a general manager, four associate managers and a gift shop manager who are responsible for approximately 93 employees on two shifts. The relative complexity of operating a Cracker Barrel Old Country Store requires an effective management team at the individual store level. As a motivation to store managers to improve sales and operational efficiency, Cracker Barrel has a bonus plan designed to provide store management with an opportunity to share in the pre-tax profits of their store. To assure that individual stores are operated at a high level of quality, the Company emphasizes the selection and training of store managers and has a level of District Management to assist individual store managers. The store management recruiting and training program begins with an evaluation and screening program. In addition to multiple interviews and background and experience verification, the Company conducts testing which it believes is important in selecting those applicants best suited to manage store operations. Those candidates who successfully pass this screening process are then required to complete a 10-week training program conducted at the Company's Lebanon, Tennessee facility. This program allows new managers the opportunity to become familiar with the Company's operations, management objectives, controls and evaluation criteria before assuming management responsibility. Purchasing and Distribution: Cracker Barrel negotiates directly with food vendors as to price and other material terms of most food purchases. The Company purchases the majority of its food products and restaurant supplies on a cost-plus basis through a distributor in Lebanon, Tennessee. The distributor is responsible for placing food orders and warehousing and delivering food products to the Company's stores. Certain perishable food items are purchased locally by the Company's stores. The majority of gift shop items are purchased directly by Cracker Barrel, warehoused at its Lebanon warehouse and shipped to the stores. The single food category accounting for the largest share (approximately 21%) of the Company's food purchasing expense is pork. The single food item within the pork category accounting for the largest share (approximately 5%) of the Company's food purchasing expense is country ham. The Company presently purchases its pork food items through twelve vendors and its country ham through three vendors. Should any pork items from these vendors become unavailable for any reason, management is of the opinion that these food items could be obtained in sufficient quantities from other sources at competitive prices. Quality, Cost and Inventory Controls: Costs are monitored by management to determine if any material variances in food cost or operating expenses have occurred. The Company's computer system is used to analyze store operating information by providing management reports for continual monitoring of sales mix and detailed operational cost data. This system is also used in the development of budget analyses and planning. 4 5 Marketing: New store locations generally are not advertised in the media until several weeks after they have been opened in order to give the staff time to adjust to local customer habits and traffic volume. To effectively reach consumers in the primary trade area for each Cracker Barrel store and also interstate travelers and tourists, outdoor advertising is the primary advertising media utilized, accounting for approximately 54% of advertising expenditures. Advertising costs are approximately 2% of annual sales. Seasonal Aspects: The profits of the Company historically have been lower in the Company's second fiscal quarter than its first and third, while profits of the Company historically have been highest in the Company's fourth fiscal quarter. Management attributes these variations primarily to the decrease in interstate tourist traffic during the winter months and the increase in interstate tourist traffic during the summer months. Working Capital: Since substantially all sales in the restaurant industry are for cash, the Company, like most other restaurant companies, is able and may from time to time operate with a negative working capital. Inventories are generally financed from normal trade credit aided by rapid turnover of the restaurant inventory. Expansion The Company's primary customer is the interstate traveler. Therefore, the Company's major emphasis in the opening of new stores will continue to be locating stores at interstate highway locations. In addition, specific major tourist destinations will be targeted as potential locations for new units. The Company opened thirty new stores in fiscal 1994. Five of the stores are located on Interstate 35 in Round Rock, Texas, Norman, Oklahoma, Liberty, Missouri, Lakeville, Minnesota, and Lacy Lakeview, Texas; three are on Interstate 75 in Flint, Michigan, Gainesville, Florida, and Middletown, Ohio; three are located on Interstate 80 in Austintown, Ohio, Davenport, Iowa, and Tinley Park, Illinois; two are located on Interstate 10 in Baytown, Texas and Lafayette, Louisiana; two are on Interstate 40 in Knoxville, Tennessee and Oklahoma City, Oklahoma; there is one store each on Interstate 4 in Sanford, Florida, U.S. Highway 17 in North Myrtle Beach, South Carolina, Interstate 20 in Augusta, Georgia, U.S. Highway 41 in Germantown, Wisconsin, Interstate 44 in Joplin, Missouri, Interstate 55 in Horn Lake, Mississippi, Interstate 64 in Newport News, Virginia, Interstate 70 in Columbus, Ohio, Interstate 77 in Akron, Ohio, Interstate 81 in Winchester, Virginia, Interstate 94 in Battle Creek, Michigan, Interstate 96 in Walker, Michigan, Interstate 470 in Topeka, Kansas, Interstate 635 in Mesquite, Texas and Interstate 694 in Brooklyn Center, Minnesota. The Company plans to open thirty-six new stores by the end of fiscal 1995. Nine of the stores are already open; there is one each on Interstate 70 in Independence, Missouri, Interstate 35 in Lewisville, Texas, Interstate 45 in League City, Texas, Interstate 83 in York, Pennsyvania, Interstate 24 in Chattanooga, Tennessee, Interstate 4 in Lakeland, Florida, Interstate 494 in Woodbury, Minnesota, Interstate 88 in Napierville, Illinois and Interstate 10 in Pensacola, Florida. Prior to committing to a new location, the Company performs extensive reviews of various available sites, gathering approximate cost, demographic and traffic data. The Company utilizes in-house engineers to consult on architectural plans, to develop engineering plans and to oversee new construction. The Company is currently engaged in the process of seeking and selecting new sites, negotiating purchase or lease terms and developing chosen sites. 5 6 It is the Company's preference to own its restaurants. The Company presently owns 174 of its 191 stores. Currently, average cost for a new store is approximately $600,000 for land and $1,800,000 for site work, building and equipment. The current store size is approximately 9,700 square feet with 176 seats in the restaurant. Employees As of July 29, 1994, Cracker Barrel employed 21,796 people, of whom 127 were in advisory and supervisory capacities, 1,121 were in store management positions and 12 were officers of the Company. Most of the restaurant personnel are employed on a full-time basis. The Company has an incentive plan for its hourly employees which is intended to lower turnover and to increase productivity by providing a defined career path through testing and ranking of employees. The Company's employees are not represented by any union, and management considers its employee relations to be good. Competition The restaurant business is highly competitive and is often affected by changes in the taste and eating habits of the public, local and national economic conditions affecting spending habits, and population and traffic patterns. The principal basis of competition in the industry is the quality and price of the food products offered. Site selection, quality and speed of service, advertising and the attractiveness of facilities are also important. There are a large number of restaurants catering to the public, including several franchised operations in the family segment of the restaurant industry, which are substantially larger and have greater financial and marketing resources than those of the Company and which compete directly and indirectly in all areas in which the Company operates. Trademarks The Company owns certain registered copyrights, patents and trademarks relating to the name "Cracker Barrel Old Country Store," its logo, menu, design of building, and other aspects of its operations. The Company believes that the use of this name has some value in maintaining the atmosphere and public acceptance of its mode of operations. Research and Development While research and development are important to the Company, these expenditures have not been material. Compliance With Environmental Protection Requirements Compliance with federal, state and local provisions which have been enacted or adopted regulating the discharge of materials into the environment should have no material effect upon capital expenditures, earnings, or the competitive position of the Company. 6 7 ITEM 2. PROPERTIES The Company's present corporate headquarters and warehouse facilities are situated on approximately 120 acres of land owned by the Company in Lebanon, Tennessee. In addition to the corporate facilities, the Company owns or leases the following properties:
State Owned Leased - - ----- ----------------- ---------------- Land Buildings Land Buildings ---- --------- ---- --------- Tennessee 25 27 8 5 Georgia 17 17 2 2 Florida 17 17 - - Indiana 14 13 - - Ohio 12 12 1 - Illinois 12 12 1 - Texas 12 8 - - Kentucky 9 9 2 2 North Carolina 9 9 1 - South Carolina 7 8 2 1 Missouri 9 9 - - Virginia 8 7 - - Michigan 8 5 - - Alabama 5 5 1 1 Wisconsin 6 5 - - Minnesota 4 3 - - Louisiana 3 3 - - Mississippi 3 3 - - Oklahoma 2 2 - - West Virginia 2 2 - - Iowa 2 2 - - Pennsylvania 1 1 - - Kansas 1 1 - -
See "Business-Operations" and "Business-Expansion" for additional information on the Company's stores. ITEM 3. LEGAL PROCEEDINGS The Company is not involved in any material pending legal proceedings. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS Not applicable. 7 8 Pursuant to Instruction 3 to Item 401(b) of Regulation S-K and General Instruction G(3) to Form 10-K, the following information is included in Part I of this Form 10-K. Executive Officers of the Registrant The following table sets forth certain information concerning the executive officers of the Company as of September 26, 1994:
Name Age Position with Registrant - - ---- --- ------------------------ Dan W. Evins 59 Chairman of the Board, President & Chief Executive Officer Jimmie D. White 53 Senior Vice President, Finance & Chief Financial Officer Reginald M. Mudd 41 Senior Vice President Operations & Chief Operations Officer Michael D. Adkins 39 Vice President, Restaurant Operations Richard G. Parsons 42 Vice President, Merchandising Donald G. Kravitz 58 Vice President, Development Mark W. Tanzer 37 Vice President, Product Development Frank J. McAvoy, Jr. 46 Vice President, Operations Services O. E. Philpot 60 Vice President, Marketing Mattie H. Hankins 54 Vice President & Comptroller
As of the end of fiscal 1994, no executive officer had been employed less than five years. 8 9 PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS Since the initial public offering of the Company's common stock in November 1981, the Company's common stock has been traded on The Nasdaq Stock Market (National Market) with the symbol CBRL. There were 15,667 shareholders of record as of September 26, 1994. The following table indicates the high and low sales prices of the Company's common stock as reported on The Nasdaq Stock Market (National Market) during the periods indicated.
Fiscal Year 1994 Prices Fiscal Year 1993 Prices ----------------------- ----------------------- Quarter High Low High Low - - ------- ---- --- ---- --- First $29.25 $22.50 $27.33 $20.83 Second 29.75 24.50 30.67 26.67 Third 29.13 25.00 31.00 24.75 Fourth 28.00 21.25 34.25 24.50
In September 1983 the Board of Directors of the Company initiated a policy of declaring dividends on a quarterly basis. Prior to such date the Board followed a policy of declaring annual dividends during the first fiscal quarter. Quarterly dividends of $.00417 per share were paid for the first two quarters of fiscal 1993. Dividends of $.00500 per share were paid for the last two quarters of fiscal 1993 and all four quarters of fiscal 1994. The Company forsees paying comparable cash dividends per share in the future. The stock prices and dividends per share have been adjusted to reflect the three-for-two stock split in the form of 50% stock dividends distributed to stockholders on March 19, 1993. The covenants relating to the $30,000,000 of 9.53% Senior Notes restrict the payment of cash dividends and the purchase of treasury stock. Retained earnings not restricted under the covenants were approximately $260,000,000 at July 29, 1994. ITEM 6. SELECTED FINANCIAL DATA The table "Selected Financial Data" on page 17 of the Company's Annual Report to Shareholders for the year ended July 29, 1994 (the "1994 Annual Report") is incorporated herein by reference. ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following portions of the 1994 Annual Report are incorporated herein by reference: Management's Discussion and Analysis of Financial Condition and Results of Operations on pages 18 and 19. 9 10 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The following portions of the 1994 Annual Report are incorporated herein by reference: Financial Statements and Independent Auditors' Report on pages 20 through 30. Quarterly Financial Data (Unaudited) on page 29. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE Not applicable. PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT The information required by this item with respect to directors of the Company is incorporated herein by reference to the section entitled "Election of Directors" in the Company's definitive proxy statement for its 1994 Annual Meeting of Shareholders (the "1994 Proxy Statement"). The information required by this item with respect to executive officers of the Company is set forth in Part I of this Form 10-K. ITEM 11. EXECUTIVE COMPENSATION The information required by this item is incorporated herein by reference to the section entitled "Executive Compensation" in the Company's 1994 Proxy Statement. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The information required by this item is incorporated herein by reference to the section entitled "Security Ownership of Management" in the Company's 1994 Proxy Statement. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS The information required by this item is incorporated herein by reference to the section entitled "Transactions with Management" in the Company's 1994 Proxy Statement. 10 11 PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K A. List of documents filed as part of this report: 1. The following Financial Statements and the Report of Deloitte & Touche LLP on pages 20 through 30 of the 1994 Annual Report are incorporated herein by reference: Independent Auditor's Report dated September 7, 1994 Balance Sheets as of July 29, 1994 and July 30, 1993 Statements of Income for each of the three fiscal years ended July 29, 1994, July 30, 1993 and July 31, 1992 Statements of Changes in Stockholders' Equity for each of the three fiscal years ended July 29, 1994, July 30, 1993 and July 31, 1992 Statements of Cash Flows for each of the three fiscal years ended July 29, 1994, July 30, 1993 and July 31, 1992 Notes to Financial Statements 2. The following supplemental schedules as of July 29, 1994, July 30, 1993 and July 31, 1992 and for each of the three fiscal years ended July 29, 1994, July 30, 1993 and July 31, 1992 are included as required by Item 8 of Form 10-K. Schedule I Short-term and Long-term Investments Schedule V Property and Equipment Schedule VI Accumulated Depreciation and Amortization of Property and Equipment Schedule X Supplementary Income Statement Information All other schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission are not required under the related instructions or are not applicable and therefore have been omitted. 3. The exhibits listed in the accompanying Index to Exhibits on page 18 are filed as part of this annual report B. Reports on Form 8-K: There were no reports filed on Form 8-K during the fourth quarter of the fiscal year ended July 29, 1994. 11 12 INDEPENDENT AUDITORS' REPORT Cracker Barrel Old Country Store, Inc.: We have audited the financial statements of Cracker Barrel Old Country Store, Inc. (the "Company") as of July 29, 1994 and July 30, 1993, and for each of the three fiscal years in the period ended July 29, 1994, and have issued our report thereon dated September 7, 1994; such financial statements and report are included in your 1994 Annual Report to shareholders and are incorporated herein by reference. Our audits also included the financial statement schedules of Cracker Barrel Old Country Store, Inc., listed in Item 14. These financial statement schedules are the responsibility of the Company's management. Our responsibility is to express an opinion based on our audits. In our opinion, such financial statement schedules, when considered in relation to the basic financial statements taken as a whole, present fairly in all material respects the information set forth therein. Deloitte & Touche LLP Nashville, Tennessee September 7, 1994 12 13 CRACKER BARREL OLD COUNTRY STORE, INC. SUPPLEMENTAL SCHEDULE I SHORT-TERM AND LONG-TERM INVESTMENTS
JULY 29, 1994 -------------------------------------------------------- Market Carrying Name of Issuer Principal Cost Value Value - - -------------- --------- ---- ------ ----- US Government & Agencies $ 6,000,000 $ 6,496,261 $ 6,168,750 $ 6,219,429 State Governments & Agencies 3,930,000 3,939,618 3,931,604 3,932,644 City & County Governments & Agencies: Tennessee: Clarksville, TN Pub Bldg Auth Ser 1994 5,000,000 5,000,000 5,000,000 5,000,000 Nashville, TN David Lipscomb Univ IDB 2,455,000 2,455,000 2,455,000 2,455,000 Nashville, TN Water & Sewer Rev Ref 2,775,000 3,019,486 2,897,037 2,900,929 Nashville, TN Health & Educ Rev Ref 1,500,000 1,500,000 1,493,295 1,500,000 Memphis, TN Sanit & Sewer System Rev Ref 1,000,000 1,000,670 999,190 1,000,082 Memphis/Shelby Co, TN Airport Rev Ref 660,000 660,000 659,525 660,000 Nashville, TN Pre-ref Convention Ctr 575,000 611,754 603,992 608,046 Kingsport, TN Ref Rev & Tax Water 500,000 500,000 500,000 500,000 Knox Co, TN G/O Scheduled Bonds 365,000 378,096 373,935 375,702 Murfreesboro, TN G/O Refunding 200,000 199,482 199,674 199,828 Maury Co, TN Health & Educ Fac Board 100,000 100,000 100,000 100,000 California 9,000,000 9,000,000 9,000,000 9,000,000 Ohio 2,500,000 2,500,000 2,500,000 2,500,000 Texas 1,445,000 1,519,188 1,488,244 1,495,589 Minnesota 600,000 657,279 622,530 623,173 Washington, D.C. 300,000 324,483 312,084 311,945 Auction Preferred Stock: Muni Partners Fund II Inc ARP Ser M 4,800,000 4,800,000 4,800,000 4,800,000 Muni Partners Fund AP Ser M 3,500,000 3,500,000 3,500,000 3,500,000 Van Kampen Merritt Tr Inv Grade PA 3,000,000 3,000,000 3,000,000 3,000,000 Municipal Premium Income Tr Ser C 2,000,000 2,000,000 2,000,000 2,000,000 Van Kampen Merritt Municipal Tr Ser C 2,000,000 2,000,000 2,000,000 2,000,000 Intercapital Insured Muni Tr II Ser 22,000,000 2,000,000 2,000,000 2,000,000 Van Kampen Mer Tr Inv Grade Muni Pfd B 750,000 750,000 750,000 750,000 Muniyield Pennsylvania Insured Fund 400,000 400,000 400,000 400,000 Nuveen Premier Insured Muni Inc Fd Ser Th 50,000 50,000 50,000 50,000 Commercial Paper 7,592,500 7,781,762 7,626,879 7,648,452 ----------- ----------- ----------- ----------- Total Short-Term Investments $64,997,500 $66,143,079 $65,431,739 $65,530,819 =========== =========== =========== =========== US Government & Agencies $11,757,000 $12,670,270 $12,017,701 $12,289,434 City & County Governments & Agencies 305,000 325,578 313,702 316,713 Commercial Paper 2,961,000 3,161,705 3,023,645 3,084,652 ----------- ----------- ----------- ----------- Total Long-Term Investments $15,023,000 $16,157,553 $15,355,048 $15,690,799 =========== =========== =========== ===========
13 14 CRACKER BARREL OLD COUNTRY STORE, INC. SUPPLEMENTAL SCHEDULE V PROPERTY AND EQUIPMENT
Balance at Balance Beginning Additions at end of Year at Cost Retirements Changes of Year YEAR ENDED JULY 29, 1994: Land $ 83,971,175 $ 23,491,342 $ 484,982 $ 23,129 $107,000,664 Buildings & improvements 153,237,487 28,787,737 655,264 20,456,432 201,826,392 Buildings under capital leases 3,289,285 -- -- -- 3,289,285 Restaurant & other equipment 89,272,873 23,891,360 3,065,708 4,535,471 114,633,996 Leasehold improvements 7,572,204 2,059,480 167,177 -- 9,464,507 Construction in progress 25,244,569 23,715,004 24,904 (25,015,032) 23,919,637 ------------ ------------ ---------- ------------ ------------ TOTAL $362,587,593 $101,944,923 $4,398,035 $ 0 $460,134,481 ============ ============ ========== ============ ============ YEAR ENDED JULY 30, 1993: Land $ 66,793,234 $ 17,178,949 $ 1,008 $ -- $ 83,971,175 Buildings & improvements 119,213,360 25,350,582 63,653 8,737,198 153,237,487 Buildings under capital leases 3,289,285 -- -- -- 3,289,285 Restaurant & other equipment 71,662,633 16,229,384 3,053,587 4,434,443 89,272,873 Leasehold improvements 6,394,972 1,366,561 209,229 19,900 7,572,204 Construction in progress 13,573,083 24,868,039 5,012 (13,191,541) 25,244,569 ------------ ------------ ---------- ------------ ------------ TOTAL $280,926,567 $ 84,993,515 $3,332,489 $ 0 $362,587,593 ============ ============ ========== ============ ============ YEAR ENDED JULY 31, 1992: Land $ 48,310,450 $ 18,662,379 $ 183,556 $ 3,961 $ 66,793,234 Buildings & improvements 88,123,466 21,425,477 212,796 9,877,213 119,213,360 Buildings under capital leases 3,503,390 -- 214,105 -- 3,289,285 Restaurant & other equipment 56,163,710 16,561,606 3,486,511 2,423,828 71,662,633 Leasehold improvements 4,841,856 1,375,061 145,624 323,679 6,394,972 Construction in progress 12,799,657 13,484,483 82,376 (12,628,681) 13,573,083 ------------ ------------- ---------- ------------ ------------ TOTAL $213,742,529 $ 71,509,006 $4,324,968 $ 0 $280,926,567 ============ ============ ========== ============ ============
14 15 CRACKER BARREL OLD COUNTRY STORE, INC. SUPPLEMENTAL SCHEDULE VI ACCUMULATED DEPRECIATION AND AMORTIZATION OF PROPERTY AND EQUIPMENT
Additions Balance at Charged To Balance Beginning Costs And at end of Year Expenses Retirements Changes of Year YEAR ENDED JULY 29, 1994: Buildings & improvements $15,870,111 $ 5,211,501 $ 212,873 -- $20,868,739 Buildings under capital leases 2,162,579 125,650 -- -- 2,288,229 Restaurant & other equipment 37,724,426 14,732,326 2,838,502 -- 49,618,250 Leasehold improvements ,234,611 331,924 67,077 -- 1,399,458 ----------- ----------- ---------- --------- ----------- TOTAL $56,991,727 $20,401,401 $3,218,452 - $74,174,676 =========== =========== ========== ========= =========== YEAR ENDED JULY 30, 1993: Buildings & improvements $11,885,571 $ 3,985,188 $ 648 -- $15,870,111 Buildings under capital leases 2,011,981 150,598 -- -- 2,162,579 Restaurant & other equipment 29,230,610 11,369,973 2,876,157 -- 37,724,426 Leasehold improvements 1,104,482 296,722 166,593 -- 1,234,611 ----------- ----------- ---------- --------- ----------- TOTAL $44,232,644 $15,802,481 $3,043,398 -- $56,991,727 =========== =========== ========== ========= =========== YEAR ENDED JULY 31, 1992: Buildings & improvements $ 9,002,036 $ 3,049,089 $ 165,554 -- $11,885,571 Buildings under capital leases 2,050,898 175,188 214,105 -- 2,011,981 Restaurant & other equipment 23,031,167 9,015,377 2,815,934 -- 29,230,610 Leasehold improvements 989,399 257,392 142,309 -- 1,104,482 ----------- ----------- ---------- --------- ----------- TOTAL $35,073,500 $12,497,046 $3,337,902 -- $44,232,644 =========== =========== ========== ========= ===========
15 16 CRACKER BARREL OLD COUNTRY STORE, INC. SUPPLEMENTAL SCHEDULE X SUPPLEMENTARY INCOME STATEMENT INFORMATION
Charged to Cost and Expenses For Fiscal Year ----------------------------------------- 1994 1993 1992 ---- ---- ---- Maintenance and repairs $ 8,644,741 $6,726,884 $5,090,681 Advertising costs (A) $12,212,528 $9,955,902 $7,873,082
All other supplemental income statement information is not required under the related instructions or is not applicable and therefore has been omitted. (A) Advertising costs include sign rentals for outdoor advertising. 16 17 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Cracker Barrel Old Country Store, Inc. has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. CRACKER BARREL OLD COUNTRY STORE, INC. By: /s/D.W. Evins By: /s/Mattie H. Hankins ------------------------------ ------------------------------ D. W. Evins Mattie H. Hankins President, CEO Vice President & Comptroller (Principal Executive Officer) By: /s/Jimmie D. White ------------------------------ Jimmie D. White Senior Vice President, Finance (Principal Financial Officer)
Date: October 24, 1994 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following person on behalf of the Company and in the capacities and on the dates indicated. /s/James C. Bradshaw, M.D. - - --------------------------------- ---------------------------------- James C. Bradshaw, M.D., Director Charles T. Lowe, Jr., Director /s/B.F. Lowery - - --------------------------------- ---------------------------------- Robert V. Dale, Director B. F. Lowery, Director /s/Dan W. Evins /s/Gordon L. Miller - - --------------------------------- ---------------------------------- Dan W. Evins, Director Gordon L. Miller, Director - - --------------------------------- ---------------------------------- Edgar W. Evins, Director Martha M. Mitchell, Director - - --------------------------------- ---------------------------------- William D. Heydel, Director James H. Stewart, Director /s/Robert C. Hilton /s/Jimmie D. White - - --------------------------------- ---------------------------------- Robert C. Hilton, Director Jimmie D. White, Director /s/Charles E. Jones, Jr. - - --------------------------------- Charles E. Jones, Jr., Director
17 18 INDEX TO EXHIBITS Exhibit 3(a) Charter (6) 3(b) Bylaws(1) 4(a) Note Agreement dated as of January 1, 1991, relating to $30,000,000 of 9.53% Senior Notes (4) 10(a) Credit Agreement dated January 28, 1991, between the Company and Wachovia Bank and Trust Company, N.A. (4) 10(b) Lease dated August 27, 1981 for lease of Clarksville, Tennessee, and Macon, Georgia, stores between B. F. Lowery, general counsel and a director, and the Company (2) 10(c) The Company's Incentive Stock Option Plan of 1982, as amended (3) 10(d) The Company's 1987 Stock Option Plan, as amended (6) 10(e) The Company's Non-Employee Director's Stock Option Plan, as amended (5) 10(f) The Company's Executive Employment Agreement (3) 13 Pertinent portions, incorporated by reference herein, of the Company's 1994 Annual Report to Shareholders 22 Definitive Proxy Materials 23 Consent of Deloitte & Touche LLP 27 Financial Data Schedule (For SEC use only)
18 19 (1) Incorporated by reference to the Company's Registration Statement on Form S-2 under the Securities Act of 1933 (File No. 2-82257). (2) Incorporated by reference to the Company's Registration Statement on Form S-7 under the Securitites Act of 1933 (File No. 2-74266). (3) Incorporated by reference to the Company's Annual Report on Form 10-K under the Securities Exchange Act of 1934 for the fiscal year ended July 28, 1989 (File No. 0-7536). (4) Incorporated by reference to the Company's Registration Statement on Form S-3 under the Securities Act of 1933 (File No. 33-38989). (5) Incorporated by reference to the Company's Annual Report on Form 10-K under the Securities Exchange Act of 1934 for the fiscal year ended August 2, 1991 (File No. 0-7536). (6) Incorporated by reference to the Company's Registration Statement on Form S-8 under the Securities Act of 1933 (File No. 33-45482).
19
   1



                                  EXHIBIT 13





   2
                            Selected Financial Data

For each of the fiscal years ended (In thousands except per share data) July 29, July 30, July 31, August 2, August 3, 1994 1993 1992 1991 1990 - - -------------------------------------------------------------------------------------------------------------- OPERATING RESULTS Net sales $640,899 $517,616 $400,577 $300,209 $225,518 Cost of goods sold 215,071 171,709 130,885 100,720 79,043 Expenses: Store operations 299,921 242,582 189,275 141,668 106,687 General and administrative 36,807 30,096 25,186 20,131 15,309 Total expenses 336,728 272,678 214,461 161,799 121,996 Operating income 89,100 73,229 55,231 37,691 24,479 Interest expense 2,136 2,885 3,374 2,839 1,338 Interest income 3,604 2,600 2,365 1,700 922 Income before income taxes 90,568 72,944 54,222 36,551 24,063 Provision for income taxes 33,609 27,292 20,279 13,679 8,796 Income before change in accounting principle 56,959 45,652 33,943 22,872 15,267 Cumulative effect of change in accounting principle** 988 -- -- -- -- Net income 57,947 45,652 33,943 22,872 15,267 SHARE DATA* Earnings before change in accounting principle per share $ .94 $ .78 $ .60 $ .44 $ .32 Cumulative effect of change in accounting principle per share** .02 -- -- -- -- Net earnings per share $ .96 $ .78 $ .60 $ .44 $ .32 Dividends per share $ .02 $ .02 $ .02 $ .02 $ .01 Weighted average shares outstanding 60,607 58,789 56,204 51,497 48,360 FINANCIAL POSITION Working capital $ 60,721 $ 76,115 $ 32,565 $ 50,280 $ (5,808) Total assets 530,064 469,073 313,460 264,666 145,156 Property and equipment additions-net 100,736 84,837 71,115 63,149 37,986 Property and equipment -net 385,960 305,596 236,694 178,669 125,485 Long-term debt 23,500 36,576 41,449 42,516 13,762 Capital lease obligations 1,709 1,802 1,876 2,032 2,188 Stockholders' equity 429,846 366,785 222,110 180,443 99,941 ==============================================================================================================
* Adjusted to give effect for the three-for-two stock splits in the form of 50% stock dividends distributed to stockholders on March 19, 1993, March 20, 1992 and March 22, 1991. ** The Company adopted Statement of Financial Accounting Standards (SFAS) No. 109, "Accounting for Income Taxes", effective July 31, 1993. (See Note 7). 3 Market Price and Dividend Information The following table indicates the high and low sale prices of the Company's common stock as reported by The Nasdaq Stock Market (National Market) and dividends paid. These prices and dividends have been adjusted to give effect for the three-for-two stock split in the form of a 50% stock dividend distributed to stockholders on March 19, 1993.
Fiscal Year 1994 Fiscal Year 1993 ---------------- ---------------- Prices Prices ----------------------- Dividends ---------------------- Dividends Quarter High Low Paid High Low Paid - - --------------------------------------------------------------------------------------------------------------------- First $29.25 $22.50 $ .00500 $27.33 $20.83 $ .00417 Second 29.75 24.50 .00500 30.67 26.67 .00417 Third 29.13 25.00 .00500 31.00 24.75 .00500 Fourth 28.00 21.25 .00500 34.25 24.50 .00500 - - ----------------------------------------------------------------------------------------------------------------------
4 Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operations The following table highlights operating results over the past three fiscal years:
Period to Period Relationship to Net Sales Increase(Decrease) ------------------------- ------------------ 1994 1993 1992 1994 vs 1993 1993 vs 1992 - - ------------------------------------------------------------------------------------- Net Sales Restaurant 78.2% 78.8% 79.8% 23% 28% Gift shop 21.8 21.2 20.2 28 35 ---- ---- ---- 100.0 100.0 100.0 24 29 Cost of goods sold 33.6 33.2 32.7 25 31 Expenses Store operations 46.8 46.9 47.3 24 28 General & administrative 5.7 5.8 6.3 22 19 Operating income 13.9 14.1 13.8 22 33 Interest expense .3 .6 .8 (26) (15) Interest income .6 .5 .6 39 10 Income before income taxes 14.1 14.1 13.5 24 35 Provision for income taxes 5.2 5.3 5.1 23 35 Income before change in accounting principle 8.9 8.8 8.5 25 34 Cumulative effect of change in accounting principle* .2 -- -- -- -- Net income 9.0 8.8 8.5 27 34 ==============================================================================
*The Company adopted Statement of Financial Accounting Standards (SFAS) No. 109, "Accounting for Income Taxes", effective July 31, 1993. (See Note 7). Same Store Sales Analysis
Period to Period Increase -------------------------------- 1994 vs 1993 1993 vs 1992 (127 Stores) (106 Stores) - - ----------------------------------------------------------------------------------- Restaurant 4% 7% Gift shop 7 12 Restaurant & gift shop 4 8 ======================================================================================
Same store restaurant sales (which compares sales of stores open throughout the periods under comparison) increased 4% in fiscal 1994 including menu price increases averaging 3% and a real sales increase of 1%. In fiscal 1993 same store restaurant sales increased 7% consisting of 3% in average menu price increases and 4% in real terms. Same store gift shop sales increased 7% in fiscal 1994 over 1993 while sales increased 12% in fiscal 1993 over 1992. In fiscal 1994 total sales (restaurant and gift shop) in the 127 same stores averaged $3.81 million. Restaurant sales were 78.3% of total sales in the 127 same stores in fiscal 1994 and 78.8% in fiscal 1993. 5 Total net sales, which increased 24% and 29% in fiscal 1994 and 1993, respectively, benefited from comparable store sales growth and the opening of 30, 25 and 21 new stores in fiscal 1994, 1993 and 1992, respectively. Cost of goods sold as a percentage of net sales increased in 1994 to 33.6% from 33.2% in 1993. This increase was primarily due to an increasing mix of gift shop sales which have a higher cost than restaurant sales. Cost of goods sold as a percentage of net sales increased in 1993 to 33.2% from 32.7% in 1992. This increase was primarily due to an increasing mix of gift shop sales which have a higher cost than restaurant sales. Store operations expenses (which includes all store labor costs) as a percentage of net sales decreased to 46.8% in fiscal 1994 from 46.9% in fiscal 1993. The primary reasons for this decrease were improved volume and lower workers' compensation insurance expenses as a result of various safety programs instituted in the stores. Store operations expenses decreased from 47.3% in fiscal 1992 to 46.9% in fiscal 1993. The decrease was primarily due to improved volume. General and administrative expenses as a percentage of net sales have declined over the past three fiscal years from 6.3% in 1992 to 5.8% in 1993 and to 5.7% in 1994. This reduction was accomplished largely due to improved volume. The largest area of increased spending in absolute dollars has been in the operations area relating to the new gift shop warehouse required to support the store expansion program that resulted in a 72% increase in the number of stores from 106 to 182 over the past three fiscal years. Interest expense decreased to $2.1 million in fiscal 1994 from $2.9 million in fiscal 1993 primarily due to the prepayment of approximately $6.8 million in unsecured notes payable and $3.5 million of Industrial Development Revenue Bonds in the second quarter of fiscal 1994 (see Note 4) and an increase in capitalized interest related to the increase in additional stores opened from 25 in 1993 to 30 in 1994. Interest expense decreased to $2.9 million in fiscal 1993 from $3.4 million in fiscal 1992 primarily due to the prepayment of approximately $1.5 million in mortgage notes in the first quarter of fiscal 1993 and an increase in capitalized interest related to the new gift shop warehouse. Interest income has increased in the past three fiscal years from $2.4 million in fiscal 1992 to $2.6 million in fiscal 1993 to $3.6 million in fiscal 1994. The increase from fiscal 1992 to fiscal 1993 was primarily due to income received on the remaining proceeds from the sale (after giving effect to the stock split - see Note 5) of 2,587,500 new common shares in January 1993 and the exercise of stock options (see Note 6) in fiscal 1993. The increase from fiscal 1993 to fiscal 1994 was primarily due to income received for a full fiscal year on the remaining proceeds from the sale (after giving effect to the stock split - see Note 5) of 2,587,500 new common shares in January 1993 and the exercise of stock options (see Note 6) in fiscal 1993. Provision for income taxes as a percent of pretax income was 37.1% for fiscal 1994 and 37.4% for fiscal 1993 and 1992. The Company adopted Statement of Financial Accounting Standards (SFAS) No. 109, "Accounting for Income Taxes", effective July 31, 1993. (See Note 7). Liquidity and Capital Resources The Company's cash generated from operating activities was $72.3 million in fiscal 1994. Most of this cash was provided by net income adjusted by depreciation. Increases in inventories were partially offset by increases in accounts payable, taxes withheld and accrued, income taxes payable and accrued employee compensation. Capital expenditures were $101.9 million in fiscal 1994. Land purchases and cost of new stores accounted for substantially all of these expenditures, except for $3.8 million for the new gift shop warehouse. 6 The Company has received approximately $4.8 million in fiscal 1994 from the exercise of stock options representing approximately 300,000 shares of common stock. The Company has also received as a result of the stock option exercises approximately $1.5 million in federal income tax benefit in fiscal 1994, which was credited directly to Additional Paid-In Capital (see Note 6). The Company's internally generated cash and short-term and long-term investments were sufficient to finance all of its growth in fiscal 1994. The Company estimates that its capital expenditures for fiscal 1995 will be approximately $120 million, substantially all of which will be land purchases and cost of new stores except for $6 million relating to the renovation of the old gift shop warehouse into office space. The Company's cash, short-term and long-term investments, along with internally generated cash from operating activities should be sufficient to finance its continued expansion in fiscal 1995 and its expansion plans through fiscal 1997. Presently the Company has an unused revolving credit line of $15 million. 7 Balance Sheets
July 29, July 30, Assets 1994 1993 - - -------------------------------------------------------------------------------- Current Assets: Cash and cash equivalents (Note 1) $ 13,050,523 $ 38,552,111 Short-term investments (Notes 1 and 3) 65,530,819 65,094,791 Receivables 2,993,735 2,436,918 Inventories (Notes 1 and 2) 41,989,546 28,426,408 Prepaid expenses 1,094,862 832,262 Deferred income taxes (Notes 1 and 7) 3,220,016 -- ------------ ------------ Total current assets 127,879,501 135,342,490 ------------ ------------ Property and Equipment (Notes 1 and 9): Land 107,000,664 83,971,175 Buildings and improvements 201,826,392 153,237,487 Buildings under capital leases 3,289,285 3,289,285 Restaurant and other equipment 114,633,996 89,272,873 Leasehold improvements 9,464,507 7,572,204 Construction in progress 23,919,637 25,244,569 ------------ ------------ Total 460,134,481 362,587,593 Less: Accumulated depreciation 71,886,447 54,829,148 Accumulated amortization of capital leases 2,288,229 2,162,579 ------------ ------------ Property and equipment-net 385,959,805 305,595,866 ------------ ------------ Long-term investments (Notes 1 and 3) 15,690,799 27,421,378 ------------ ------------ Other assets 533,622 712,783 ------------ ------------ Total $530,063,727 $469,072,517 ============ ============
See notes to financial statements. 8
July 29, July 30, Liabilities and Stockholders' Equity 1994 1993 - - -------------------------------------------------------------------------------- Current Liabilities: Accounts payable $ 25,766,024 $ 23,137,298 Current maturities of long-term debt (Note 4) 3,500,000 3,822,156 Current portion of capital lease obligations (Note 9) 93,781 79,597 Taxes withheld and accrued 7,407,263 6,212,278 Income taxes payable 5,039,688 1,926,374 Accrued employee compensation 13,187,656 10,973,979 Accrued employee benefits 7,882,069 8,872,100 Other accrued expenses 4,281,525 4,203,432 ------------ ------------ Total current liabilities 67,158,006 59,227,214 ------------ ------------ Long-Term Debt (Note 4) 23,500,000 36,575,799 ------------ ------------ Capital Lease Obligations (Note 9) 1,708,619 1,801,900 ------------ ------------ Deferred Income Taxes (Notes 1 and 7) 7,851,185 4,682,931 ------------ ------------ Commitments and Contingencies (Note 9) Stockholders' Equity (Notes 4, 5 and 6): Common stock - 150,000,000 shares of $.50 par value authorized; shares issued and outstanding: 1994, 59,901,316; 1993, 59,570,468 29,950,658 29,785,234 Additional paid-in capital 194,073,393 187,929,934 Retained earnings 205,821,866 149,069,505 ------------ ------------ Total stockholders' equity 429,845,917 366,784,673 ------------ ------------ Total $530,063,727 $469,072,517 ============ ============
See notes to financial statements. 9 Statements of Income
Fiscal years ended July 29, July 30, July 31, 1994 1993 1992 - - ------------------------------------------------------------------------ Net sales $640,898,529 $517,616,132 $400,577,451 Cost of goods sold 215,071,169 171,708,439 130,885,297 ------------ ------------ ------------ Gross profit on sales 425,827,360 345,907,693 269,692,154 ------------ ------------ ------------ Expenses: Store operations 299,920,659 242,582,314 189,275,090 General and administrative 36,806,415 30,096,037 25,185,724 ------------ ------------ ------------ Total expenses 336,727,074 272,678,351 214,460,814 ------------ ------------ ------------ Operating income 89,100,286 73,229,342 55,231,340 Interest expense 2,136,393 2,884,857 3,374,638 Interest income 3,603,983 2,600,000 2,365,146 ------------ ------------ ------------ Income before income taxes 90,567,876 72,944,485 54,221,848 Provision for income taxes (Notes 1 and 7) 33,608,692 27,292,000 20,279,000 ------------ ------------ ------------ Income before change in accounting principle 56,959,184 45,652,485 33,942,848 Cumulative effect of change in accounting principle (Note 7) 988,262 -- -- ------------ ------------ ------------ Net income $ 57,947,446 $ 45,652,485 $ 33,942,848 ============ ============ ============ Earnings before change in accounting principle per share (Notes 1 and 5) $ .94 $ .78 $ .60 Cumulative effect of change in accounting principle per share (Note 7) .02 -- -- ----- ----- ----- Net earnings per share (Notes 1 and 5) $ .96 $ .78 $ .60 ===== ===== =====
See notes to financial statements. 10 Statements of Changes in Stockholders' Equity
Additional Total Common Paid-In Retained Stockholders' Stock Capital Earnings Equity - - ---------------------------------------------------------------------------------- Balances at August 2, 1991 $11,981,205 $ 97,052,475 $ 71,408,939 $180,442,619 Cash dividends - $.02 a share (876,205) (876,205) Exercise of stock options (Note 6) 225,179 3,796,281 4,021,460 Tax benefit realized upon exercise of stock options (Note 6) 4,579,000 4,579,000 Three-for-two stock split (Note 5) 6,052,917 (6,052,917) Net income 33,942,848 33,942,848 ---------- ----------- ----------- ----------- Balances at July 31,1992 18,259,301 99,374,839 104,475,582 222,109,722 Cash dividends - $.02 a share (1,058,562) (1,058,562) Exercise of stock options (Note 6) 785,674 12,354,441 13,140,115 Tax benefit realized upon exercise of stock options (Note 6) 17,610,000 17,610,000 Proceeds from issuance of common stock, less related expenses of $221,087 862,500 68,468,413 69,330,913 Three-for-two stock split (Note 5) 9,877,759 (9,877,759) Net income 45,652,485 45,652,485 ---------- ----------- ----------- ----------- Balances at July 30, 1993 29,785,234 187,929,934 149,069,505 366,784,673 Cash dividends - $.02 a share (1,195,085) (1,195,085) Exercise of stock options (Note 6) 165,424 4,616,561 4,781,985 Tax benefit realized upon exercise of stock options (Note 6) 1,526,898 1,526,898 Net income 57,947,446 57,947,446 ---------- ----------- ----------- ----------- Balances at July 29, 1994 $29,950,658 $194,073,393 $205,821,866 $429,845,917 ========== =========== =========== ===========
See notes to financial statements. 11 Statements of Cash Flows
Fiscal years ended July 29, July 30, July 31, 1994 1993 1992 - - ------------------------------------------------------------------------------- Cash flows from operating activities: Net income $ 57,947,446 $ 45,652,485 $33,942,848 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization of property and equipment 20,401,401 15,802,481 12,497,046 (Gain) loss on disposition of property and equipment (29,697) 132,828 593,015 (Increase) decrease in receivables (556,817) (728,490) 65,818 Increase in inventories (13,563,138) (5,234,298) (7,445,662) Increase in prepaid expenses (262,600) (197,909) (226,838) Decrease (increase) in other assets 179,161 (11,141) 23,876 Increase in accounts payable 2,628,726 7,149,398 805,244 Increase in taxes withheld and accrued 1,194,985 1,093,380 1,300,615 Increase in income taxes payable 3,113,314 243,332 182,973 Increase in accrued employee compensation 2,213,677 427,509 2,659,049 (Decrease) increase in accrued employee benefits (990,031) 2,586,738 2,903,056 Increase in other accrued expenses 78,093 1,516,571 821,298 (Decrease) increase in deferred income taxes (51,762) 189,000 (158,000) ----------- ----------- ----------- Net cash provided by operating activities 72,302,758 68,621,884 47,964,338 ----------- ----------- ----------- Cash flows from investing activities: Decrease (increase) in short-term and long-term investments 11,294,551 (54,938,192) 16,843,408 Purchase of property and equipment (101,944,923) (84,993,515) (71,509,006) Proceeds from sale of property and equipment 1,209,280 156,263 394,051 ----------- ----------- ----------- Net cash used in investing activities (89,441,092) (139,775,444) (54,271,547) ----------- ----------- -----------
12 Cash flows from financing activities: Proceeds from issuance of capital stock -- 69,330,913 -- Proceeds from exercise of stock options 4,781,985 13,140,115 4,021,460 Tax benefit realized upon exercise of stock options 1,526,898 17,610,000 4,579,000 Principal payments under long-term debt and capital lease obligations (13,477,052) (2,268,456) (1,387,659) Dividends on common stock (1,195,085) (1,058,562) (876,205) ------------ ------------ ----------- Net cash (used in) provided by financing activities (8,363,254) 96,754,010 6,336,596 ------------ ------------ ----------- Net (decrease) increase in cash and cash equivalents (25,501,588) 25,600,450 29,387 Cash and cash equivalents, beginning of year 38,552,111 12,951,661 12,922,274 ------------ ------------ ----------- Cash and cash equivalents, end of year $ 13,050,523 $ 38,552,111 $12,951,661 ============ ============ =========== Supplemental disclosures of cash flow information: Cash paid during the year for: Interest $ 3,557,507 $ 3,325,044 $ 3,804,309 Income taxes 28,126,949 9,249,668 19,938,027
See notes to financial statements. 13 NOTES TO FINANCIAL STATEMENTS 1. Summary of Significant Accounting Policies Fiscal year - The Company's fiscal year ends on the Friday nearest July 31st and each quarter consists of thirteen weeks. Start-up Costs - Start-up costs of a new store are expensed in the period in which the store opens. Cash and cash equivalents - Cash consists of cash on hand, cash on deposit and money market funds subject to withdrawal by check or wire. Short-term Investments - Short-term investments, primarily consisting of auction preferred stock, municipal bonds, commercial paper and federal government agency securities, which the Company intends to hold to maturity, are stated at amortized cost in accordance with Statement of Financial Accounting Standards (SFAS) No. 115, "Accounting for Certain Investments in Debt and Equity Securities". The Company adopted SFAS No. 115 as of July 30, 1993. (See Note 3). Inventories - Inventories are stated at the lower of cost or market. Cost is determined by the first-in, first-out (FIFO) method. Property and Equipment - Property and equipment are stated at cost. For financial reporting purposes depreciation and amortization on these assets are computed by use of the straight-line and double-declining balance methods over the estimated useful lives of the respective assets, as follows:
Years - - ---------------------------------------------------------------------- Buildings and improvements 20-45 Buildings under capital leases 10-25 Restaurant and other equipment 5-10 Leasehold improvements 3-35 - - ----------------------------------------------------------------------
Accelerated depreciation methods are generally used for income tax purposes. Interest is capitalized in accordance with Statement of Financial Accounting Standards No. 34, "Capitalization of Interest Costs". Capitalized interest was $1,533,904, $1,362,460 and $1,055,033 for fiscal years 1994, 1993 and 1992, respectively. Gain or loss is recognized upon disposal of property and equipment, and the asset and related accumulated depreciation and amortization amounts are removed from the accounts. Maintenance and repairs, including the replacement of minor items, are charged to expense, and major additions to property and equipment are capitalized. Income Taxes - The Company adopted Statement of Financial Accounting Standards (SFAS) No. 109, "Accounting for Income Taxes", effective July 31, 1993. This Statement supersedes Accounting Principles Board Opinion No. 11, "Accounting for Income Taxes", which was the Company's prior method of accounting for income taxes. Targeted jobs tax credits and employer tax credits for FICA taxes paid on tip income are accounted for by the flow-through method. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes (see Note 7). Earnings per common share - The computation of earnings per common share is based on the weighted average number of outstanding common shares and equivalents (stock options) adjusted for stock splits. The weighted average number of outstanding common shares and equivalents were 60,607,372, 58,788,612 and 56,203,512 for 1994, 1993 and 1992, respectively. Long-term Investments - Long-term investments, primarily consisting of federal government agency securities and commercial paper which the Company intends to hold to maturity, are stated at amortized cost in accordance with SFAS No. 115. (See Note 3). 14 Reclassifications - Certain reclassifications have been made in the fiscal 1993 and 1992 financial statements to conform to the classifications used in fiscal 1994. 2. Inventories Inventories were composed of the following at:
July 29, July 30, 1994 1993 - - --------------------------------------------------------------------------- Gift shop $34,379,398 $22,446,477 Restaurant 6,156,479 5,001,681 Supplies 1,435,841 978,250 - - --------------------------------------------------------------------------- Total $41,989,546 $28,426,408 ===========================================================================
3. Short-term and Long-term Investments Effective July 30, 1993, the Company adopted Statement of Financial Accounting Standards (SFAS) No. 115, "Accounting for Certain Investments in Debt and Equity Securities". The Company's investment securities are classified as held-to-maturity under SFAS No. 115 and, as a result, are carried at amortized cost. Unrealized holding gains and losses are not reported in the Company's financial statements, since the investments are classified as held-to-maturity under SFAS No. 115. The adoption of SFAS No. 115 had no effect on the Company's financial statements. The amortized cost and market values of securities held-to-maturity at July 29, 1994 were as follows:
Amortized Unrealized Unrealized Market Cost Gains Losses Value - - --------------------------------------------------------------------------- U.S. Treasury and U.S. Government Agencies $18,508,863 $ -- $322,412 $18,186,451 Obligations of states and political subdivisions 33,479,651 139 29,978 33,449,812 Corporate debt securities 10,733,104 540 83,120 10,650,524 Other securities 18,500,000 -- -- 18,500,000 - - --------------------------------------------------------------------------- Short-term and long-term investment securities $81,221,618 $679 $435,510 $80,786,787 ===========================================================================
The amortized cost and market values of securities held-to-maturity at July 30, 1993 were as follows:
Amortized Unrealized Unrealized Market Cost Gains Losses Value - - --------------------------------------------------------------------------- U.S. Treasury and U.S. Government Agencies $15,121,810 $12,613 $ 5,440 $15,128,983 Obligations of states and political subdivisions 26,897,314 -- -- 26,897,314 Corporate debt securities 16,451,317 7,538 8,960 16,449,895 Other securities 34,045,728 -- -- 34,045,728 - - --------------------------------------------------------------------------- Short-term and long-term investment securities $92,516,169 $20,151 $14,400 $92,521,920 ===========================================================================
15 The following table shows the maturity distribution of the Company's investment securities at July 29, 1994:
Amortized Market Maturity (Fiscal Years) Cost Value - - --------------------------------------------------------------------------- 1995 $65,530,819 $65,431,739 1996-1999 15,577,676 15,242,727 2000-2004 113,123 112,321 - - --------------------------------------------------------------------------- Short-term and long-term investments $81,221,618 $80,786,787 ===========================================================================
4. Debt Long-term debt consisted of the following at:
July 29, July 30, 1994 1993 - - --------------------------------------------------------------------------- 9.53% Senior Notes Payable in annual installments of varying amounts from January 15, 1994 to January 15, 2002, with a final installment of $2,000,000 due January 15, 2003 $27,000,000 $30,000,000 Unsecured Notes Payable in annual installments of $800,000 through 1999, with a final installment of $2,000,000 due August 5, 2000. The note bears interest at an annual rate of 9.5% through 1997 and thereafter at a rate equal to the U. S. Treasury Note rate plus 1.2% -- 6,800,000 Industrial Development Revenue Bonds redeemable in annual installments of $700,000 from December 1, 2009 through December 1, 2012, with a final installment of $665,000 on December 1, 2013, bearing interest at an annual rate of 8.5% -- 3,465,000 Other note payable -- 132,955 - - --------------------------------------------------------------------------- Total 27,000,000 40,397,955 Less current maturities 3,500,000 3,822,156 - - --------------------------------------------------------------------------- Long-term debt $23,500,000 $36,575,799 ===========================================================================
The note agreements relating to the $30,000,000 of 9.53% Senior Notes placed in January 1991 include, among other provisions, requirements that the Company maintain minimum tangible net worth of $70,000,000. The agreements also contain certain other restrictions related to the payment of cash dividends and the purchase of treasury stock. Retained earnings not restricted under the provisions of the agreements were approximately $260,000,000 at July 29, 1994. The Company has a revolving credit agreement with a maximum principal amount of $15,000,000. No amounts were outstanding under the agreement at July 29, 1994 or July 30, 1993. 16 The Company elected to prepay the following two outstanding debt issues during the second quarter of fiscal year 1994, unsecured notes payable of $6,800,000 and Industrial Development Revenue Bonds of $3,465,000. The aggregate maturities of long-term debt subsequent to July 29, 1994 are as follows: Fiscal year - - ---------------------------------------------------------------------------- 1995 $ 3,500,000 1996 4,000,000 1997 4,000,000 1998 3,500,000 1999 2,500,000 Later years 9,500,000 - - ---------------------------------------------------------------------------- Total $27,000,000 ============================================================================
5. Common Stock On January 29, 1993 and January 30, 1992, the Board of Directors declared three-for-two stock splits in the form of 50% stock dividends distributed to stockholders on March 19, 1993 and March 20, 1992, respectively. The earnings and dividends per common share for the first two quarters of 1993 and for 1992 have been restated to give effect to the stock splits. The Board of Directors granted on August 30, 1993, an option for 1,000,000 shares at $25.00 per share to the Cracker Barrel Old Country Store Foundation. The option is exercisable each year, starting at the date of the grant, on a cumulative basis at the rate of 20% of the total number of shares covered by the option. 1,000,000 shares of the option remain unexercised (of which 200,000 shares are exercisable). 6. Stock Option Plans The Company has two incentive stock option plans for key employees (which includes store-level management and the highest level of hourly employees in the stores) and one for non-employee directors. After giving effect to the stock splits (see Note 5), a total of 11,025,702 shares have been reserved for the key employees plans. The Company has granted options for 8,589,180 shares at purchase prices ranging from $.58 to $27.67 per share. The options expire ten years from the date of the grant and are exercisable each year, starting at the date of grant, on a cumulative basis at the rate of 33% of the total number of shares covered by the option. The following is a schedule by years of the activity of the key employees plans adjusted for stock splits (see Note 5):
Exercise Price Shares (Range) per Share - - ---------------------------------------------------------------------------- Outstanding at August 2, 1991 (2,337,613 shares exercisable) 3,334,194 $ 1.10 - $ 7.04 Granted 1,210,142 $16.61 Exercised 684,970 $ 1.10 - $16.61 Expired 41,491 $ 5.38 - $ 7.04 - - ---------------------------------------------------------------------------- Outstanding at July 31, 1992 (2,750,041 shares exercisable) 3,817,875 $ 1.19 - $16.61 Granted 1,030,273 $27.67 Exercised 1,972,490 $ 1.19 - $27.67 Expired 46,485 $16.61 - $27.67 - - ---------------------------------------------------------------------------- Outstanding at July 30, 1993 (1,845,387 shares exercisable) 2,829,173 $ 1.51 - $27.67 Granted 825,825 $25.75 Exercised 330,848 $ 5.38 - $27.67 Expired 168,813 $16.61 - $27.67 - - ---------------------------------------------------------------------------- Outstanding at July 29, 1994 (2,342,912 shares exercisable) 3,155,337 $ 1.51 - $27.67 ============================================================================
17 After giving effect to the stock splits (see Note 5), a total of 1,518,750 shares have been reserved for the Non-employee Directors Plan. The Company has granted options for 1,341,536 shares at purchase prices ranging from $5.09 to $29.50 per share. The options are exercisable six months from the date of grant. The following is a schedule by years of the activity of the Non-employee Directors Plan adjusted for stock splits (see Note 5):
Exercise Price Shares (Range) per Share - - ---------------------------------------------------------------------------- Outstanding at August 2, 1991 (514,677 shares exercisable) 514,677 $ 5.09 - $ 7.48 Granted 253,120 $16.56 Exercised 179,059 $ 5.09 - $ 7.48 - - ---------------------------------------------------------------------------- Outstanding at July 31, 1992 (588,738 shares exercisable) 588,738 $ 5.09 - $16.56 Granted 253,120 $29.50 Exercised 234,370 $ 5.09 - $16.56 - - ---------------------------------------------------------------------------- Outstanding at July 30, 1993 (607,488 shares exercisable) 607,488 $ 5.09 - $29.50 Granted 278,432 $25.38 Exercised 0 - - - ---------------------------------------------------------------------------- Outstanding at July 29, 1994 (885,920 shares exercisable) 885,920 $ 5.09 - $29.50 ============================================================================
The Company recognizes a tax benefit upon exercise of non-qualified stock options in an amount equal to the difference between the option price and the fair market value of the common stock. These tax benefits are credited to Additional Paid-In Capital. 7. Income Taxes The Company adopted Statement of Financial Accounting Standards (SFAS) No. 109, "Accounting for Income Taxes", effective July 31, 1993. This Statement supersedes Accounting Principles Board Opinion No. 11, "Accounting for Income Taxes", which was the Company's prior method of accounting for income taxes. The cumulative effect of adopting SFAS No. 109 in the Company's financial statements increased income by $988,262 ($.02 per share) for fiscal 1994. The adjustment primarily represents the impact of adjusting deferred taxes to new rates as opposed to the higher tax rates in effect when the deferred taxes originated. The adoption of SFAS No. 109 had no impact on the Company's effective tax rate for fiscal years 1993 or 1994. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. 18 Significant components of the Company's net deferred tax liability consisted of the following at:
July 29, July 31, 1994 1993 - - ---------------------------------------------------------------------------- Deferred tax assets: Financial accruals without economic performance $ 4,527,953 $ 3,778,730 Other 1,751,543 797,357 -------------------------- Deferred tax assets 6,279,496 4,576,087 -------------------------- Deferred tax liabilities: Excess tax depreciation over book 9,710,701 8,235,680 Other 1,199,964 35,076 -------------------------- Deferred tax liabilities 10,910,665 8,270,756 -------------------------- Net deferred tax liability $(4,631,169) $(3,694,669) ==========================
The Company provided no valuation allowance against deferred tax assets recorded as of July 31, 1993 and July 29, 1994, as the "more-likely-than-not" valuation method determined all deferred assets to be fully realizable in future taxable periods. The components of the provision for income taxes for each of the three fiscal years was as follows:
1994 1993 1992 - - ---------------------------------------------------------------------------- Current: Federal $29,253,272 $23,088,000 $17,184,000 State 5,141,920 4,015,000 3,253,000 Deferred (786,500) 189,000 (158,000) - - ---------------------------------------------------------------------------- Total income tax provision $33,608,692 $27,292,000 $20,279,000 ============================================================================
A reconciliation of the provision for income taxes as reported and the amount computed by multiplying the income before the provision for income taxes by the U.S. federal statutory rate of 35% for fiscal 1994 and 34% for fiscal years 1993 and 1992 follows:
1994 1993 1992 - - ---------------------------------------------------------------------------- Provision computed at federal statutory income tax rate $31,698,757 $24,801,125 $18,435,480 State and local income taxes 3,255,457 2,647,885 2,147,185 Jobs credit (487,500) (462,000) (511,500) Employer tax credits for FICA taxes paid on tip income (571,002) -- -- Retroactive change in income tax rate to 35% from January 1, 1993 -- 422,838 -- Other-net (287,020) (117,848) 207,835 - - ---------------------------------------------------------------------------- Total income tax provision $33,608,692 $27,292,000 $20,279,000 ============================================================================
8. Segment Information The Company operates stores which provide a combination of restaurant and gift shop services to the motoring public. This combination of services is considered to be one industry segment. 19 9. Leases The Company operates seventeen stores from leased facilities and also leases certain land and advertising billboards. These leases have been classified as either capital or operating leases in accordance with the criteria contained in Statement of Financial Accounting Standards No. 13, "Accounting for Leases". The interest rates for capital leases vary from 10% to 17%. Amortization of capital leases is included with depreciation expense. A majority of the Company's lease agreements provide for renewal options and some of these options contain escalation clauses. Certain store leases provide for contingent lease payments based upon sales volume in excess of specified minimum levels. The following is a schedule by years of future minimum lease payments under capital leases together with the present value of the minimum lease payments as of July 29, 1994: Fiscal year - - ---------------------------------------------------------------------------- 1995 $ 360,135 1996 360,135 1997 360,135 1998 368,122 1999 370,785 Later years 1,598,678 - - ---------------------------------------------------------------------------- Total minimum lease payments 3,417,990 Less amount representing interest 1,615,590 - - ---------------------------------------------------------------------------- Present value of minimum lease payments 1,802,400 Less current portion 93,781 - - ---------------------------------------------------------------------------- Long-term portion of capital lease obligations $1,708,619 ============================================================================
The following is a schedule by years of the future minimum rental payments required under noncancelable operating leases as of July 29, 1994: Fiscal year - - ---------------------------------------------------------------------------- 1995 $ 7,161,107 1996 3,743,977 1997 1,393,088 1998 791,366 1999 673,438 Later years 6,864,398 - - ---------------------------------------------------------------------------- Total $20,627,374 ============================================================================
Rent expense under operating leases for each of the three fiscal years was:
Minimum Contingent Total - - ---------------------------------------------------------------------------- 1994 $7,799,700 $634,200 $8,433,900 1993 6,313,800 539,800 6,853,600 1992 4,741,000 722,300 5,463,300
10. Employee Savings Plan The Company has an employee savings plan, which provides for retirement benefits for eligible employees. The plan is funded by elective employee contributions up to 16% of their compensation and the Company matches 25% of employee contributions for each participant up to 6% of the employee's compensation. The Company expensed contributions of $540,469, $482,446 and $338,791 for fiscal 1994, 1993 and 1992, respectively. 20 11. Quarterly Financial Data (Unaudited) Quarterly financial data for fiscal 1994 and 1993 are summarized as follows:
1st 2nd 3rd 4th Quarter Quarter Quarter Quarter - - ---------------------------------------------------------------------------- 1994 Net sales $152,498,897 $150,831,678 $155,368,895 $182,199,059 Gross profit on sales 102,105,597 96,775,494 104,610,016 122,336,253 Income before income taxes 21,456,461 15,911,622 20,221,158 32,978,635 Income before change in accounting principle 13,367,375 9,912,941 12,597,781 21,081,087 Cumulative effect of change in accounting principle** 988,262 -- -- -- Net income 14,355,637 9,912,941 12,597,781 21,081,087 Earnings before change in accounting principle per share .22 .16 .21 .35 Cumulative effect of change in accounting principle per share** .02 -- -- -- Net earnings per share .24 .16 .21 .35 - - ---------------------------------------------------------------------------- 1993 Net sales $122,980,186 $119,575,294 $125,151,916 $149,908,736 Gross profit on sales 82,631,627 77,709,552 84,633,732 100,932,782 Income before income taxes 16,188,574 12,222,426 16,084,669 28,448,816 Net income 10,134,047 7,651,239 10,069,003 17,798,196 Net earnings per share* .18 .13 .17 .29 - - ----------------------------------------------------------------------------
*(See Note 5). **(See Note 7). 21 INDEPENDENT AUDITORS' REPORT Cracker Barrel Old Country Store, Inc.: We have audited the accompanying balance sheets of Cracker Barrel Old Country Store, Inc. (the "Company") as of July 29, 1994 and July 30, 1993, and the related statements of income, changes in stockholders' equity, and cash flows for each of the three fiscal years in the period ended July 29, 1994. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, such financial statements present fairly, in all material respects, the financial position of the Company at July 29, 1994 and July 30, 1993, and the results of its operation and its cash flows for each of the three fiscal years in the period ended July 29, 1994 in conformity with generally accepted accounting principles. Deloitte & Touche LLP Nashville, Tennessee September 7, 1994
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                                  EXHIBIT 22





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                    CRACKER BARREL OLD COUNTRY STORE, INC.
                                Hartmann Drive
                        Lebanon, Tennessee 37088-0787

                        ______________________________

                   NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
                   TO BE HELD ON TUESDAY, NOVEMBER 22, 1994
                        ______________________________

         Notice is hereby given that the Annual Meeting of Shareholders of
Cracker Barrel Old Country Store, Inc. (hereinafter called the "Company"), will
be held at the offices of the Company located on Hartmann Drive, Lebanon,
Tennessee, on Tuesday, November 22, 1994 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 approve the selection of Deloitte & Touche as the Company's
                 independent auditors for the 1995 fiscal year.

         (3)     To consider and take action on a proposal of the New York City
                 Employees' Retirement System to amend the Company's employment
                 policies to include language relating to gay and lesbian
                 sexual preferences, if such proposal should be presented at
                 the meeting.

         (4)     To consider and take action on a proposal of a certain
                 shareholder, relating to the expansion of the Board of
                 Directors to reflect the varied races, genders and sexual
                 orientations of shareholders, if such proposal should be
                 presented at the meeting.

         (5)     To transact such other business as may properly be brought
                 before the meeting or any adjournment thereof.

         The Board of Directors has fixed the close of business on September
26, 1994, as the record date for the determination of shareholders entitled to
notice of and to vote at the 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
meeting.

                                  By Order of the Board of Directors

                                  Evalena C. Bennett, Secretary

Lebanon, Tennessee
October 21, 1994


           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.





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                     CRACKER BARREL OLD COUNTRY STORE, INC.
                                 Hartmann Drive
                         Lebanon, Tennessee 37088-0787

                       ________________________________

                                PROXY STATEMENT
                       ________________________________

         The accompanying proxy is solicited by 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 22, 1994, and any adjournments
thereof, notice of which is attached hereto.

         This Proxy Statement and the Annual Report of the Company for the
fiscal year ended July 29, 1994, have been mailed on or about October 21, 1994,
to all shareholders of record on September 26, 1994.

         The purpose of the Annual Meeting is to elect thirteen directors; to
approve the selection of Deloitte & Touche as the Company's independent
auditors for the next fiscal year; to vote on a shareholder proposal for the
amendment of the Company's employment policies as they relate to gay and
lesbian sexual preferences; and to vote on a shareholder proposal for the
expansion of the Board of Directors by the number of persons necessary to
reflect the varied races, genders, and sexual orientations of the Company's
shareholders.

         A shareholder of record who signs and returns a proxy in the
accompanying form may revoke the same at any time before the authority granted
thereby is exercised 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 proxy bearing a later date.  Unless so revoked, the shares
represented by the proxy will be voted at the Annual Meeting.  Where a choice
is specified on the proxy, the shares represented thereby will be voted in
accordance with such specifications.  If no specification is made, such shares
will be voted for:  the election of all director nominees and the approval of
Deloitte & Touche as the Company's independent auditors for the next fiscal
year.  If no specification is made, such shares will be voted against:  the two
proposals by shareholders.

         Directors shall be elected by a plurality of the votes cast in the
election by the holders of Common Stock represented and entitled to vote at the
Annual Meeting, at which a quorum is present.  Assuming the existence of a
quorum, all other proposals 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.

         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 matter does come
before the meeting, the persons appointed in the proxy or their substitutes
will vote in accordance with their best judgment on such matters.





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         The Board of Directors has fixed the close of business on September
26, 1994, as the record date for the Annual Meeting.  The Company's only class
of securities is its Common Stock, $.50 par value per share.  On September 26,
1994, the Company had outstanding 59,911,166 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.  Shareholders will be entitled to one vote for
each share so held, 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.  Such solicitation will be made by mail, and may also be made
by the Company's regular officers or employees personally or by telephone or
telegram.  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, for a fee of
approximately $2,000 per month, plus reimbursement of out-of-pocket expenses.
As part of its duties, Corporate Communications, Inc. may assist in the
solicitation of proxies.

         The Company will continue its practice of holding the votes of all
share owners in confidence from the Company, its directors, officers and
employees except (1) 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) in the event that a share
owner makes a written comment on the proxy card or otherwise communicates
his/her vote to management.  The Company will also continue, as it has in the
past, to employ an independent tabulator to receive and tabulate the proxies,
and independent inspectors of election to certify the results.

                       PROPOSAL 1.  ELECTION OF DIRECTORS

         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.  Unless contrary
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 as directors of all the nominees named below.  If for any reason any
of such nominees is not available for election, the persons named in the proxy
have advised that they will vote for such substitute nominees as the Board of
Directors of the Company may propose.  The Board of Directors has no reason to
expect that any of these nominees will fail to be candidates at the meeting,
and therefore, does not at this time have any substitute nominee under
consideration.  The information relating to the thirteen nominees set forth
below has been furnished to the Company by the individuals named.  All of the
nominees are presently directors of the Company and were elected at the annual
meeting held on November 23, 1993.

         The 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 INDICATED TO THE CONTRARY, WILL BE VOTED "FOR" THE LISTED
NOMINEES.






                                       2
   5





NAME, AGE, POSITION FIRST BECAME BUSINESS EXPERIENCE WITH THE COMPANY A DIRECTOR DURING PAST FIVE YEARS ---------------- ----------- ---------------------- James C. Bradshaw, 63 1970 Practicing physician, Lebanon, Director Tennessee Robert V. Dale, 58 1986 President of Martha White Foods, Inc., Director Nashville, Tennessee Dan W. Evins, 59 1970 Chairman, President and Chief Chairman, President and Executive Officer of the Company; Chief Executive Officer(1) Member of Board of Directors of Clayton Homes, Inc. Edgar W. Evins, 62 1970 Retired in June 1987; President, Director(1) DeKalb County Bank and Trust Company, Alexandria, Tennessee, from 1958 until June 1987 William D. Heydel, 65 1970 Retired in 1984; for the previous Director five years, Tennessee manager of American Family Life Assurance Company, Nashville, Tennessee Robert C. Hilton, 57 1981 Chairman, President and CEO of Director Home Technology Healthcare, Inc. Nashville, Tennessee, since October 1991; Private investor, August 1988 to October 1991; Chairman and CEO, American Healthcorp, Inc. September 1981 to August 1988 Charles E. Jones, Jr., 49 1981 President, Corporate Communications, Director Incorporated, a financial public relations firm, Nashville, Tennessee Charles T. Lowe, Jr., 62 1970 Retired in 1993; previously Director President of Travel World, Inc., a travel agency, Lebanon, Tennessee B.F. Lowery, 57 1971 Attorney; President and Chairman, Director LoJac Companies, asphalt paving, highway construction, highway safety equipment and building materials supplier and contractor, Lebanon, Tennessee Gordon L. Miller, 60 1974 Dentist, Lebanon, Tennessee Director Martha M. Mitchell, 54 1993 Senior Vice President (since Director January 1987) and Partner (since January 1993) of Fleishman-Hillard, Inc., a public relations firm, St. Louis, Missouri
3 6 James H. Stewart, 69 1985 Retired in October 1987; President Director and Chief Operating Officer, Prepared Foods, Inc., August 1986 to September 1987; Vice President and Chief Financial Officer, Prepared Foods, Inc. from September 1985 to July 1986 Jimmie D. White, 53 1993 Senior Vice President - Finance and Chief Financial Officer of the Company ____________________________________
(1) Dan W. Evins and Edgar W. Evins are brothers. The Company's Stock Option Committee is currently composed of Robert C. Hilton, Edgar W. Evins and Charles E. Jones, Jr. This committee, which met once during the fiscal year ended July 29, 1994, is responsible for the administration of the Company's Incentive Stock Option Plan of 1982 and its 1987 Stock Option Plan. The Company's Audit Committee is currently composed of James H. Stewart, Edgar W. Evins, William D. Heydel and Charles T. Lowe, Jr. This committee, which met three times during the fiscal year ended July 29, 1994, 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 therein. The Company's Compensation Committee is composed of Robert V. Dale, James C. Bradshaw, Robert C. Hilton, Charles E. Jones, Jr., B.F. Lowery and Gordon L. Miller. This committee, which met once during the fiscal year ended July 29, 1994, reviews and recommends to the Board of Directors the salaries, bonuses and other cash compensation of the executive officers of the Company. During the fiscal year ended July 29, 1994, the Board of Directors held four meetings and the Executive Committee held ten meetings. No incumbent director attended fewer than 75 percent of the Board meetings in 1994. The Company's 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 is currently composed of James C. Bradshaw, Robert V. Dale, Dan W. Evins, Robert C. Hilton, Charles E. Jones, Jr., B.F. Lowery and Gordon L. Miller. The Executive Committee also reviews director nominees and makes recommendations to the Board of Directors prior to each annual meeting of shareholders. The Executive Committee will consider nominees recommended in writing by shareholders who submit such nominations to the Company prior to the deadline for shareholder proposals as further described under "Proposals of Shareholders" herein. The Company pays to each of its outside directors an annual retainer of $14,000 and $900 as a director's fee for each board meeting attended. Outside directors who are members of the Company's Executive Committee receive a fee of $900 for each such committee meeting attended. Fees of $800 for the Company's Audit Committee, Compensation Committee and Stock Option Committee are paid to committee members for each such committee meeting attended. The chairmen of the Audit Committee, Compensation Committee and the Stock Option Committee receive an additional fee of $400 for each committee meeting attended. No fees are paid to directors who are also employees of the Company. 4 7 SECURITY OWNERSHIP OF MANAGEMENT The following information pertains to the Common Stock of the Company beneficially owned, directly or indirectly, by all directors and nominees and by all directors and officers as a group, as of September 26, 1994. Unless otherwise noted, the named persons have sole voting and investment power with respect to the shares indicated.
AMOUNT AND NATURE OF PERCENT BENEFICIAL OWNERS BENEFICIAL OWNERSHIP(1) OF CLASS - - ----------------- ----------------------- -------- James C. Bradshaw 529,609 (2) * Robert V. Dale 139,242 * Dan W. Evins 570,000 * Edgar W. Evins 52,824 * William D. Heydel 534,842 (2) * Robert C. Hilton 83,189 * Charles E. Jones, Jr. 86,651 * Charles T. Lowe, Jr. 985,867 (3) 1.6% B.F. Lowery 224,015 * Gordon L. Miller 252,124 * Martha M. Mitchell 25,762 * James H. Stewart 50,624 * Jimmie D. White 350,060 * All Officers and Directors as a group (23 persons) 4,760,329 7.7% *Less than one percent ____________________________________
(1) Includes the following shares which are not currently outstanding but which the named holders are entitled to receive within 60 days upon exercise of options: James C. Bradshaw 126,560 Robert V. Dale 126,560 Dan W. Evins 170,000 Edgar W. Evins 50,624 William D. Heydel 126,560 Robert C. Hilton 75,936 Charles E. Jones, Jr. 75,936 Charles T. Lowe, Jr. 50,624 B. F. Lowery 126,560 Gordon L. Miller 50,624 Martha M. Mitchell 25,312 James H. Stewart 50,624 Jimmie D. White 284,375 All Officers and Directors as a group 1,340,295
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. 5 8 (2) Includes shares owned jointly with wife with whom voting and investment power is shared: Mr. Bradshaw 403,049 and Mr. Heydel 408,282. (3) Voting and investment power with respect to 43,489 shares is shared by Mr. Lowe and his wife, the owner of those 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 each committee are 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 plan pursuant to which employee stock options are granted. In addition, a study prepared by independent consultants which specialize in executive compensation is used to review the salary and bonus for competitiveness in relation to other selected companies in the restaurant and food service industry. BASE SALARY In setting the Fiscal 1994 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 areas of responsibility from a report prepared for the Company by independent executive compensation consultants. In addition, they considered the contribution made by each executive officer during Fiscal 1993, as reported by the Chief Executive Officer, as well as salary recommendations from management for the executive officers other than the Chairman, President and Chief Executive Officer, Dan W. Evins. During discussions out of his presence, the Compensation Committee employed procedures similar to those used for each of the other executive officers to determine the Fiscal 1994 salary for Dan W. Evins. BONUS The Compensation Committee has established 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 then ending fiscal year and the internal budget established for the next fiscal year in setting the criteria for executive officer bonuses. The basic plan rewards executive officers of the Company, based on the amount of increase in the Company's pretax income over the previous fiscal year. If pretax income is equal to or less than that of the previous fiscal year, there are no bonuses paid to any of the executive officers. For Fiscal 1994, as in recent years, a bonus pool of 12% of the amount by which the current fiscal year's pretax income exceeds that of the previous fiscal year, plus an additional 2% of any amount in excess of the internally budgeted pretax income, is distributed among the executive officers. The bonus pool is distributed by determining each executive officer's pro rata share of an aggregate bonus participation amount arrived 6 9 at by multiplying each officer's salary by the bonus participation percent set by the Compensation Committee (60% for Mr. Evins, 36% for senior officers and 24% for all other executive officers). Bonuses earned for Fiscal 1994, as a percent of total salary and bonuses, were 71% for Mr. Evins, 60% for Senior Officers and 49% for all other executive officers. STOCK OPTIONS In contrast to salary and bonus awards, which are generally for past work performance, stock options are based on future performance of stock price appreciation. They are granted at an exercise price which is equal to the market price of the Company's Common Stock on the date of grant, and therefore have no value until the stock 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 operating units. See "Stock Option Plans" below. 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 July 29, 1994 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 as the Company.
7/31/89 7/31/90 7/31/91 7/31/92 7/31/93 7/29/94 Cracker Barrel Old Country Store, Inc. 100 136 263 389 453 405 NASDAQ SIC-58 100 109 116 148 173 157 S&P 400 MIDCAP 100 106 130 153 178 185
(1) Assumes that the value of the investment in the Company's Common Stock and each Index was $100 on July 28, 1989, and that all dividends were reinvested. 7 10 SUMMARY COMPENSATION TABLE The following table sets forth information concerning the compensation of the Chief Executive Officer and the four other most highly compensated executive officers who served in such capacities as of July 29, 1994.
Long-Term Annual Compensation Compensation ------------------------------- --------------------------- Principal Fiscal # Options All Other Name Position Year Salary (1) Bonus Granted Compensation (2) ---- -------- ---- ---------- ----- ------- ---------------- Dan W. Evins Chairman of the Board, 1994 $360,000 $879,900 40,000 $29,223 Chief Executive 1993 326,600 861,748 60,000 30,647 Officer and President 1992 295,800 805,152 90,000 29,745 Jimmie D. White Senior Vice President/ 1994 195,000 285,997 25,000 16,991 Finance and Chief 1993 163,000 276,324 37,500 17,111 Financial Officer 1992 145,000 254,721 56,250 16,550 Reginald M. Mudd (3) Senior Vice President/ 1994 165,083 222,014 25,000 8,962 Operations and Chief 1993 130,000 146,921 18,000 8,753 Operations Officer 1992 118,000 138,193 27,000 8,385 Richard G. Parsons Vice President/ 1994 134,000 131,021 12,000 8,506 Merchandising 1993 122,000 137,879 18,000 8,436 1992 111,000 129,995 27,000 7,326 Frank J. McAvoy Vice President/ 1994 145,000 141,776 12,000 12,197 Operations Services 1993 133,000 150,311 18,000 12,619 1992 101,000 118,870 27,000 8,503
(1) Salary includes director's fees received by Mr. Evins in the amount of $21,600 for 1993 and $20,800 for 1992. Effective August 1993, no director's fees are paid to directors who are also employees of the Company. (2) Includes premiums paid on Life and Disability insurance for coverage above that available to all salaried employees, the Company's contributions to 401(k) Employee Savings Plan and interest earned on salary deferred under the Company's Deferred Compensation Plan. (3) Mr. Mudd assumed his current responsibilities effective November 15, 1993. Prior to that date he was Vice President, Restaurant Operations. 8 11 OPTIONS GRANTED DURING FISCAL YEAR ENDED JULY 29, 1994 The following table sets forth all options to acquire shares of the Company's Common Stock granted to the named executive officers during the fiscal year ended July 29, 1994.
Individual Grants (1) -------------------------------------------------------------------- Percent of Potential Realizable Value Total Options Assumed Annual Rates of Stock Granted to Exercise or Appreciation for Option (2) # Options Employees in Base Price Expiration ----------------------------- Name Granted Fiscal Year $/Share Date 5% 10% ---- ------- ----------- ------- -------- ---- ----- Dan W. Evins 40,000 4.8% $25.75 08-26-03 $647,600 $1,641,600 Jimmie D. White 25,000 3.0% 25.75 08-26-03 404,750 1,026,000 Reginald M. Mudd 25,000 3.0% 25.75 08-26-03 404,750 1,026,000 Richard G. Parsons 12,000 1.5% 25.75 08-26-03 194,280 492,480 Frank J. McAvoy 12,000 1.5% 25.75 08-26-03 194,280 492,480
(1) The exercise price of the options granted is equal to the market value of the Company's Common Stock on the date of grant. Options are exercisable as to not more than one-third of the total number of shares under the option during each twelve-month period following the grant. To the extent any optionee does not exercise an option as to all shares for which the option was exercisable during any twelve-month period, the balance of unexercised options shall accumulate and the option will be exercisable with respect to such shares. Options expire ten years after grant. (2) The potential realizable value amounts shown illustrate the values that might be realized upon exercise immediately prior to the expiration of their term using 5 percent and 10 percent appreciation rates set by the Securities and Exchange Commission, compounded annually, and, therefore, 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 nontransferability, vesting over a period of years or termination of the options following termination of employment. 9 12 OPTION EXERCISES AND FISCAL YEAR END VALUES There were no options exercised during the fiscal year ended July 29, 1994 by the named executive officers. The following table sets forth the number and value of unexercised options held by such executive officers at fiscal year end.
Value of Unexercised Number of Unexercised In-the-Money-Options Options at FY-End at FY-End ------------------------------ ----------------------------- Exercisable Unexercisable Exercisable Unexercisable ----------- ------------- ----------- ------------- Dan W. Evins 143,333 46,667 $ 597,600 $0 Jimmie D. White 267,708 29,167 3,388,519 0 Reginald M. Mudd 128,333 22,667 1,542,713 0 Richard M. Parsons 158,780 14,000 2,254,610 0 Frank J. McAvoy 51,437 14,000 316,044 0
(1) The last trade of the Company's Common Stock as reported by NASDAQ on July 29, 1994 was $23.25 and was used in calculating the value of unexercised options. EXECUTIVE EMPLOYMENT AGREEMENT Employment agreements have been granted to Dan W. Evins (Chairman of the Board, Chief Executive Officer and President), and Jimmie D. White (Senior Vice President, Finance and Chief Financial Officer) which, upon the occurrence of certain events, authorize a severance payment approximately equal to three times their annual salary rate in effect on the date of termination. The Executive 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 the Executive's base salary or bonus percentage; or (2) a reduction in the importance of the Executive's job responsibilities; or (3) a geographical relocation of the Executive without his consent. The three-year severance payment shall also be made to the Executive if the Company breaches the terms of the Agreement. Additionally, the Agreement describes the Executive's rights to compensation should his employment be terminated or suspended due to death, disability, poor performance or wrongful activities. Although not intended primarily as a standard employment contract, the Agreement does provide for payment to the Executive of a specified annual salary which shall not be decreased, and which may be increased from time to time. These agreements do not preclude the Executives from participating in any other Company benefit plans or arrangements. 10 13 STOCK OPTION PLANS On February 25, 1982, the Company's Board of Directors adopted an incentive stock option plan, which was subsequently 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. 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 "1987 Plan"). The shareholders adopted the 1987 Plan at the 1987 annual meeting of shareholders. The 1987 Plan, like the 1982 Plan is administered by the Stock Option Committee (the "Committee"). Members of the Committee are appointed by the Board and consist of members of the Board. The 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 the options granted to each, and within applicable limits, the terms and provisions relating to the exercise of such options. The Committee is currently authorized to grant options to purchase an aggregate of 8,550,607 shares of the Company's Common Stock under the 1987 Plan. Options may be granted only to key executive personnel and other employees who hold responsible positions with the Company. The Committee may impose on the option, or the exercise thereof, such restrictions as it deems reasonable and which are within the restrictions authorized by the 1987 Plan. An option granted pursuant to the 1987 Plan is exercisable as to not more than one-third of the total number of shares under the option during each twelve-month period following the date of the granting of the option. To the extent, however, any optionee does not exercise an option as to all shares for which the option was exercisable during any twelve-month period, the balance of unexercised options shall accumulate and the option will be exercisable with respect to such shares. The option price per share under the 1987 Plan must be at least 100% of the fair market value of a share of the Company's Common Stock on the day next preceding the day the option is granted and options must be exercised not later than ten years after the date on which granted. During Fiscal 1994, the aggregate number of shares subject to options granted was 825,825 including 166,000 shares granted to the Company's executive officers as a group, including the individuals named in the summary compensation table. These options were granted at $25.75 per share. The aggregate number of shares exercised during Fiscal 1994 was 330,848. There were no options exercised during Fiscal 1994 by the Company's executive officers. The net value of shares (market value less option exercise price) or cash realized upon exercise of options was $4,114,520 in the aggregate. In 1989, the directors and shareholders of the Company adopted the 1989 Stock Option Plan for Non-Employee Directors. The total number of shares of Common Stock issuable upon the exercise of all options granted under the Plan will not exceed in the aggregate 1,518,750 shares. Under the Plan, all non-employee directors of the Company automatically receive an annual stock option grant for 25,312 shares of the Company's Common Stock. These Stock Options become exercisable six (6) months after the date of 11 14 grant. The Stock Options are granted at an exercise price equal to the fair market value of the underlying stock on the date of grant and have no expiration date. On August 26, 1993 each director listed on page 5, except Mr. Dan W. Evins and Mr. Jimmie D. White, was granted an option to purchase 25,312 shares at $25.375 per share. There were no options exercised during Fiscal 1994. EMPLOYEE SAVINGS PLANS The Company has an Employee Savings Plan (the "Plan") which provides for retirement benefits for employees. The Plan is qualified under Section 401(k) of the Internal Revenue Code. Generally, all employees of the Company who have completed one year of service with the Company, who have worked in excess of 1,000 hours with the Company and who have reached the age of twenty-one (21) are eligible to participate in the Plan. Eligible employees may elect to participate in the Plan as of the beginning of each calendar quarter. Each eligible employee who chooses to participate in the Plan may elect to have up to sixteen percent (16%) (not to exceed $9,240 in calendar 1994) of their compensation contributed to the Plan. The Company matches twenty-five percent (25%) of employee contributions for each participant up to 6% of the employee's compensation. Participants in the Plan have fully vested interest in their contributions to the Plan. Participants' interest in Company contributions begins to vest after one (1) year from the date of employment and continues to vest at the rate of twenty percent (20%) per year until fully vested. Generally participants may not withdraw either their contributions or their vested interest in Company contributions prior to retirement or termination of their employment with the Company. Limited hardship withdrawals are tightly controlled by the provisions of the Plan and the Internal Revenue Code. 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 of the 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 ten-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 1994 was $1,739. 12 15 TRANSACTIONS WITH MANAGEMENT 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 fifteen-year term. The annual rental for the Macon store is the greater of (i) 12% of the total cost of the land, buildings and improvements or (ii) 5% of the total restaurant sales plus 3% of the gift shop sales. The annual rental for the Clarksville store is 12% of the total cost of the land, buildings and improvements or, in the alternative, 5% of the total restaurant sales plus 3% of the gift shop sales, provided the total of such 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 July 29, 1994, the Company paid a total of $298,832 in lease payments to Mr. Lowery. 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 such company for services and $435,515 for reimbursement of direct expenses including preparation, distribution and design of the annual report, and other financial reports. All of the foregoing transactions were negotiated by the Company on an arms-length basis, and Management believes that such transactions are fair and reasonable and on terms no less favorable than those which could be obtained from unaffiliated parties. PROPOSAL 2. APPROVAL OF APPOINTMENT OF AUDITORS The Board of Directors has appointed Deloitte & Touche as independent auditors of the Company for the 1995 fiscal year, subject to approval by the shareholders. Deloitte & Touche have served as the Company's independent auditors since the fiscal year ended July 31, 1973. A representative of Deloitte & Touche is expected to be present at the Annual Meeting with the opportunity to make a statement, if such representative so desires, and will 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 INDICATED TO THE CONTRARY, WILL BE VOTED "FOR" THE PROPOSAL. PROPOSAL 3. SHAREHOLDER PROPOSAL The New York City Employees' Retirement System, Office of Comptroller, Municipal Building, New York, New York, states that it is the owner of at least 1,000 shares of the Common Stock of the Company, and has informed the Company that it intends to present, through a representative, the following proposal at the meeting: WHEREAS, in February, 1991 the management of Cracker Barrel Old Country Stores restaurants announced a policy of discrimination in employment against gay men and lesbians; and 13 16 WHEREAS, although Cracker Barrel management asserts that this discrimination policy has been rescinded, the Company refused to rehire fired workers and media reports have indicated that gay and lesbian workers were subsequently dismissed on the basis of their sexual orientation; and WHEREAS, employment discrimination on the basis of sexual preference may deprive corporations of the services of productive employees, leading to less efficient corporate operations which in turn can have a negative impact on shareholder value; and, RESOLVED, Shareholders request the Board of Directors to implement non-discriminatory policies relating to sexual orientation and to add explicit prohibitions against such discrimination to their corporate employment policy statement. 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 INDICATED TO THE CONTRARY, WILL BE VOTED "AGAINST" THE PROPOSAL. The SEC (Securities and Exchange Commission) ruled that a New York City Employees' Retirement System proposal identical to Proposal 3 did not have to be included in the Company's 1992 proxy. The basis of the SEC's ruling was that the proposal involved day-to-day issues concerning hiring and other personnel matters, which are properly left to Company management. Last year, the SEC's decision was overruled by the United States District Court for the Southern District of New York, forcing the Company to include the proposal in its 1993 proxy. Company shareholders defeated this proposal by a wide margin. A national civil rights bill referred to as the National Lesbian and Gay Rights Law has been considered by Congress, but has never passed. Your management is convinced that the proponents of Proposal 3 are attempting to circumvent the legislative process by using corporate proxies as a forum to promote a "social policy" concerning gay and lesbian sexual preferences, thereby forcing your Company to do what Congress has declined to force companies to do. Your management is also convinced that the proponents of this proposal are more interested in gay and lesbian concerns as a social issue than in any economic effect these concerns may have on your Company. Proposal 3 references a possible negative impact on Company stock, due to gay and lesbian issues. This suggestion ignores the fact that since February 1991, the value of Cracker Barrel Common Stock has risen from $9.96 per share (adjusted for stock splits) to $23.25 per share on September 26, 1994. As Cracker Barrel has publicly stated on many occasions, it is an equal opportunity employer that adheres to the letter and spirit of the law regarding non-discrimination in the work place. THE BOARD OF DIRECTORS, FOR THESE REASONS, RECOMMENDS A VOTE "AGAINST" THIS SHAREHOLDER PROPOSAL. 14 17 PROPOSAL 4. SHAREHOLDER PROPOSAL Mr. Carl R. Owens, P. O. Box 8233, Atlanta, Georgia, states that he is the owner of at least 1,000 shares of the Common Stock of the Company, and has informed the Company that he intends to present the following proposal at the meeting: WHEREAS, the Board of Directors controls who is nominated to sit on the Board and can invite self-nominated persons who can make a self-identification as to gender, ethnic background, and sexual orientation for positions on the Board; and WHEREAS, the Board has the ability to communicate with all stockholders in the Company and can survey the stockholders to determine the percentages of stockholders who wish to self-identify into either race or sexual orientation categories; and WHEREAS, the Board has not issued a policy protecting the employment rights of gay and lesbian employees, thereby negatively affecting the value of the stock; and WHEREAS, the Board does not wish to acknowledge that the majority of stockholders of the Company are gay and lesbian or support gay or lesbian rights; and WHEREAS, the Company has not always been racially sensitive in its choice of merchandise in the Company's stores; and WHEREAS, because diversity issues within a corporation are set through policies of the Board of Directors, and the Board of this corporation has not been responsive to issues of the various groups comprising the customer base and stockholders, the Board needs to include representatives from the stockholders to be certain the issues are addressed on a company-wide basis; and WHEREAS, discrimination against a particular group results in violence being directed toward individuals in that group and the blatant discrimination that our Company fosters is and has been a contributing factor to serious injuries against gay and lesbian persons; and WHEREAS, the lack of a company-wide policy protecting the employment rights of gay and lesbian employees has been a decision of the Board of Directors and such policy is detrimental to the Company and the communities in which it is located; RESOLVED, that the Board of Directors of Cracker Barrel Old Country Store, Inc. shall include individuals knowledgeable about the business of operating the Company, and that group shall reflect the races, genders and sexual orientations of the Stockholders. The Board shall determine how to implement this proposal; if necessary it shall be accompanied by increasing the number of members of the Board by the necessary number of seats to assure representation of stockholder diversity as described in this resolution. 15 18 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 INDICATED TO THE CONTRARY, WILL BE VOTED "AGAINST" THE PROPOSAL. Proposal 4 is essentially the same as the proposal submitted by Mr. Owens for inclusion in the Company's 1993 proxy. This proposal was soundly defeated. Management urges shareholders to similarly defeat Mr. Owens' proposal this year. A fundamental problem with the proposal is that it asks the Board of Directors to do something which is beyond its power. Only the shareholders can elect members to the Company's Board. The Board itself cannot insure that particular directors will be elected. In short, Mr. Owens' proposal, even if it were to receive the requisite votes, is not one the Company has the authority to bring about. Additionally, the proposal is so vague and indefinite that it cannot be determined with reasonable certainty what action or measures would be required if the proposal were adopted. The Company does not know the race, gender and sexual preference of each of its shareholders. Such information could not be requested without violating shareholders' rights to privacy. Further, the Company does not know exactly what the proposal means when it refers to "races" and "sexual orientations." Likewise, it is not clear what would constitute "the necessary number of seats to assure representation of stockholder diversity." In short, Proposal 4 is beyond the Board's power to effect, and is so vague and indefinite, the Company would not know how to implement it. THE BOARD OF DIRECTORS, FOR THESE REASONS, RECOMMENDS A VOTE "AGAINST" THIS SHAREHOLDER PROPOSAL. PROPOSALS OF SHAREHOLDERS Shareholders intending to submit proposals for presentation at the 1995 Annual Meeting of Shareholders of the Company and inclusion in the proxy statement and form of proxy for such meeting should forward such proposals to Dan W. Evins, President, Cracker Barrel Old Country Store, Inc., P.O. Box 787, Hartmann Drive, Lebanon, Tennessee 37088-0787. Proposals must be in writing and must be received by the Company prior to June 25, 1995. Proposals should be sent to the Company by certified mail, return receipt requested. ANNUAL REPORT AND FINANCIAL INFORMATION A copy of the Company's Annual Report to Shareholders for Fiscal 1994 is being mailed to each shareholder herewith. A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K AND A LIST OF ALL EXHIBITS THERETO WILL BE SUPPLIED WITHOUT CHARGE TO ANY SHAREHOLDER UPON WRITTEN REQUEST TO: JIMMIE D. WHITE, SR. VICE PRESIDENT - FINANCE, AT THE COMPANY'S PRINCIPAL EXECUTIVE OFFICES, HARTMANN DRIVE, LEBANON, TENNESSEE 37088-0787. EXHIBITS TO THE FORM 10-K ARE AVAILABLE FOR A REASONABLE FEE. 16 19 CRACKER BARREL OLD COUNTRY STORE, INC. PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON TUESDAY, NOVEMBER 22, 1994. The undersigned hereby appoints Dan W. Evins and Evalena C. Bennett and each of them, as proxies, with full power of substitution, to vote all shares of the undersigned as shown below on this proxy at the Annual Meeting of Shareholders of Cracker Barrel Old Country Store, Inc. to be held at the Company's offices located on Hartmann Drive, Lebanon, Tennessee, on Tuesday, November 22, 1994, at 10:00 a.m., local time, and any adjournments thereof. THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSALS (1) AND (2). (1) ELECTION OF DIRECTORS: / / FOR all the following nominees (except as indicated to the contrary below): J. Bradshaw, R. Dale, D. W. Evins, E. W. Evins, W. Heydel, R. Hilton, C. Jones, Jr., C. Lowe, Jr., B. Lowery, G. Miller, M. Mitchell, J. Stewart, and J. White. / / AGAINST the following nominee(s) (please print name(s)): -------------------------------------------------------------- / / WITHHOLD AUTHORITY (ABSTAIN) to vote for the following nominees (please print name): --------------------------------- / / AGAINST all nominees. / / WITHHOLD AUTHORITY (ABSTAIN) to vote for all nominees. (2) To approve the selection of Deloitte & Touche as the Company's independent auditors for the fiscal year 1995. / / FOR / / AGAINST / / WITHHOLD AUTHORITY (ABSTAIN) THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" PROPOSALS (3) AND (4). (3) To vote on a proposal of the New York City Employees' Retirement System to amend employment policies to include language relating to gay and lesbian sexual preferences. / / AGAINST / / FOR / / WITHHOLD AUTHORITY (ABSTAIN) (Please date and sign this proxy on the reverse side.) (4) To vote on a proposal of a shareholder to expand the Company's Board of Directors to include persons who reflect the varied races, genders and sexual orientations of the Company's shareholders. / / AGAINST / / FOR / / WITHHOLD AUTHORITY (ABSTAIN) (5) In their discretion, to transact such other business as may properly be brought before the meeting or any adjournment thereof. Your shares will be voted in accordance with your instructions. If no choice is specified, shares will be voted FOR the nominees in the election of directors, FOR the selection of Deloitte & Touche, AGAINST the amendment of employment policies and AGAINST the expansion of the Board of Directors. Date ___________, 1994. PLEASE SIGN HERE AND RETURN PROMPTLY -------------------------------------------- -------------------------------------------- Please sign exactly as your name appears at left. If registered in the names of two or more persons, each should sign. Executors, administrators, trustees, guardians, attorneys, and corporate officers should show their full titles. - - ------------------------------------------------------------------------------ IF you have changed your address, please PRINT your new address on this line.
   1



                                  EXHIBIT 23





   2




                         INDEPENDENT AUDITORS' CONSENT




We consent to the incorporation by reference in Registration Statement Nos.
2-86602, 33-15775, 33-37567 and 33-45482 of Cracker Barrel Old Country Store,
Inc. on Forms S-8 and Registration No. 33-59582 on Form S-3 of our report dated
September 7, 1994, incorporated by reference in the Annual Report on Form 10-K
of Cracker Barrel Old Country Store, Inc. for the year ended July 29, 1994.



Deloitte & Touche LLP
Nashville, Tennessee

October 24, 1994





 

5 EXHIBIT 27 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FINANCIAL STATEMENT OF CRACKER BARREL FOR THE YEAR ENDED JULY 29, 1994, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 YEAR JUL-29-1994 JUL-31-1993 JUL-29-1994 13,051 65,531 2,994 0 41,990 127,880 460,134 74,175 530,064 67,158 23,500 29,951 0 0 399,895 530,064 640,899 640,899 215,071 299,921 36,806 0 2,136 90,568 33,609 56,959 0 0 988 57,947 .96 .96