[CBRL GROUP, INC. LOGO]
Dear Shareholder:
I am pleased to inform you that on September 7, 1999, the Board of Directors
of CBRL Group, Inc. (the "Company") adopted a Rights Agreement comprising a
shareholder rights plan (the "Plan"). We believe that this Plan will help
protect the value of your investment in CBRL Group, Inc. With this letter,
we are sending you a summary describing the Plan. The adoption of this Plan
requires no action on your part.
The purpose of the Plan is to assure that all shareholders are treated fairly
by anyone who might seek to obtain control of the Company. The business
environment has changed in many ways over the years, and the corporate
takeover environment provides hostile bidders with a variety of coercive
takeover tactics. Your Board believes that a shareholder rights plan
continues to be an important tool to enable the Board to effectively
represent the interests of all shareholders in the event of an unsolicited
takeover attempt. The Plan is not unique, over 2,000 corporations throughout
the country have adopted shareholder rights plans.
The Plan was not adopted because of any current effort by another party to
acquire the Company. We are not aware of any present effort to acquire
control of the Company, but the existence of the Plan should help protect you
against unfair takeover techniques such as open-market accumulations of large
blocks of stock, partial or two-tiered offers that do not treat shareholders
equally and other similar tactics which do not provide all the shareholders
the full value of their investment.
Unless the Rights established by the Plan are redeemed by the Company, the
occurrence of certain takeover-related events will cause the Rights to
convert into the right to acquire securities of the Company (or of the
acquiror) at a significant discount. These takeover-related events include
the merger of the Company with and into any other person and the sale or
transfer of assets or earning power aggregating more than 50% of the
Company's assets or earning power. The effect is to dilute the acquiring
person's interest in the Company and to raise the price of acquiring the
Company. Since the Rights are subject to redemption prior to the occurrence
of certain events, a potential acquiror can avoid triggering the Rights by
negotiating with the Company's Board of Directors to establish a full and
fair offering price.
This Plan does not in any way alter the financial strength of the Company or
interfere with its business strategy or operations. The adoption of the plan
is not dilutive, does not affect reported earnings per share, is not taxable
to you or the Company, and will not affect your trading of common stock.
The Board and management are enthusiastic about the potential of the Company
to build long-term shareholder value and we are committed to serving the best
interests of Company shareholders, employees and the communities in which we
operate. We believe CBRL Group, Inc. has a bright future. The distribution
to you of the Rights under the Plan reflects our determination that you, our
shareholders, be given every opportunity to participate fully in that future.
Very truly yours,
/s/ ▇▇▇ ▇. ▇▇▇▇▇
September 27, 1999 ▇▇▇ ▇. ▇▇▇▇▇
Chairman & Chief Executive Officer
[Cracker Barrel CBRL GROUP, Inc. [Logan's
Old Country Post Office Box 787 . Lebanon, Tennessee 37088-0787 Roadhouse
Store Logo PHONE ▇▇▇.▇▇▇.▇▇▇▇ * FACSIMILE 615.443.9818 Logo]
SUMMARY
OF
CBRL GROUP, INC.
RIGHTS AGREEMENT
-----------------------------------------------------------------------------
Distribution and The Board has declared a dividend of one
Transfer of Rights; Right for each share of CBRL Group, Inc.
Rights Certificates: Common Stock outstanding. Future shares
------------------- issued by the Company, if any, will carry
the same Rights. Prior to the Distribution
Date, the Rights are evidenced by and trade
with the Common Stock and the Rights are
not exercisable. After the Distribution
Date, the Rights Agent would mail Rights
Certificates to stockholders and the Rights
would become transferable apart from the
Common Stock.
Distribution Date: Rights would separate from the Common Stock
----------------- and become exercisable following the
earlier of (i) the date of the "Flip-in"
Trigger or (ii) the 10th business day (or
later date the Board may designate) after
any person commences a tender or exchange
offer that would result in that person
holding a total of 30% or more of the
Common Stock.
Exercise of Rights: After the Distribution Date, each Right
------------------ would entitle the holder to purchase, for
the Purchase Exercise Price of $65.00,
one share of Common Stock. See "Flip-in"
Trigger for effect if Distribution Date is
caused by the "Flip-in" Trigger.
"Flip-in" Trigger: If any person becomes the beneficial owner
----------------- (defined broadly to encompass groups acting
in concert) of 15% or more of the
outstanding Common Stock (an "Acquiring
Person") (15% or greater blocks existing as
of the date of the adoption of the
agreement will not be Acquiring Persons so
long as no additional shares are acquired,
other than through a stock split or
dividend), then 10 business days thereafter
(or any earlier or later date the Board of
Directors may decide):
(i) Rights owned by the Acquiring Person
or its transferees will automatically
be void; and
(ii) each other Right will automatically
become a right to buy, for the
Purchase Exercise Price, that number
of shares of Common Stock having a
market value of twice the Purchase
Exercise Price.
Exchange Option: If the Flip-in Trigger occurs, the Board
--------------- may, in lieu of allowing Rights to be
exercised, require each outstanding Right
to be exchanged for one share of Common
Stock, subject to adjustment as set forth
in the Rights Agreement.
"Flip-over" Trigger: After a Flip-in Trigger occurs, the Company
------------------- may not consolidate or merge with, or sell
50% or more of its assets or earning power
to, any person, if the Company's Board of
Directors is controlled by the Acquiring
Person, unless proper provision is made so
that each Right would thereafter become a
right to buy, for the Purchase Exercise
Price, that number of shares of common
stock of the other party to the transaction
having a market value of twice the Purchase
Exercise Price.
Redemption: The Rights may be redeemed by the Board, at
---------- any time until a Flip-in Trigger has
occurred, at a Redemption Price of $0.01
per Right.
Power to Amend: The Board of Directors may generally amend
-------------- the Rights Agreement at any time in any
respect not adverse to holders of Rights.
Expiration: The Rights will expire on August 31, 2009,
---------- if not terminated earlier.
Full Text: The Rights Agreement has been filed with
--------- the Securities and Exchange Commission and
is available for review at the SEC's
internet site, addressed at
http:\\▇▇▇.▇▇▇.▇▇▇. In addition, the
Company will mail a copy of the Rights
Agreement, without charge, to any
shareholder who makes a request in writing.
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