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Cracker Barrel Confirms Biglari Holdings’ Rejection Of Offer To Repurchase Its Shares

We respect Biglari Holdings’ ownership of Cracker Barrel stock and interest in the company. However, your proxy contests of 2011 and 2012, in which our shareholders decided not to elect you to the Board, have imposed significant financial costs on the Company and diverted meaningful time away from focusing on the strategic plan and maximizing shareholder value by our Board and management team. In each of the last two years, you rejected our good faith settlement offers of two board seats for independent directors chosen by you. Given this history, we assume that you remain intent on seeking a Board seat for yourself personally, despite the clear preference of our shareholders to the contrary. As an alternative to another proxy contest, we believe the buyback transaction we propose here would serve the best interests of the Company and our shareholders.

Our analysis of block trades and sell down programs shows that a meaningful discount would be typical if you were to exit on your own over a longer period of time. By contrast, our offer provides immediate price certainty to Biglari Holdings’ shareholders and allows for the monetization of an approximately $70 million appreciation in the value of the Cracker Barrel common stock acquired by Biglari Holdings since June 2011. Moreover, this accretive transaction would serve the best interests of all Cracker Barrel shareholders by enabling the Company to continue executing our sound business strategy without the threat of yet another costly and disruptive proxy contest. We are confident in our ability to complete the transaction promptly.

In order to proceed in a timely manner, we kindly ask for your indication of interest regarding further discussions in writing no later than February 20, 2013. If not provided by that date, we will assume that you have rejected our offer. If you indicate your readiness to move forward with this buyback, we will work with you promptly to negotiate definitive transaction agreements. We expect that the definitive agreements would include a three-year standstill restricting Biglari Holdings from acquiring shares of Cracker Barrel or taking other actions such as a proxy contest. Of course, as is customary in communications of this nature, our offer is being presented as a non-binding proposal, and any transaction will be subject to the execution of definitive transaction agreements by all applicable parties.

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