UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
SCHEDULE
14A INFORMATION
Proxy
Statement Pursuant to Section 14(a) of the
Securities
and Exchange Act of 1934
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| [ ] | Preliminary Proxy Statement |
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| [X] | Definitive Proxy Statement |
| [ ] | Definitive Additional Materials |
| [ ] | Soliciting Material Pursuant to § 240.14a-12 |
CBRL
Group, Inc.
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[CBRL
GROUP, INC. LOGO]
Dear
Shareholder:
We
have
enclosed with this letter the Proxy Statement for our 2006 Annual Meeting of
Shareholders and our 2006 Annual Report. We hope you find them interesting
and
useful in understanding your company.
This
year’s Annual Meeting will be held on Tuesday, November 28, 2006, at 10:00 a.m.
Central Time, at our offices at 305 Hartmann Drive, Lebanon, Tennessee 37087,
and you are most welcome to attend.
At
this
year’s meeting, you will have an opportunity to vote on the election of 11
directors and approve the selection of Deloitte & Touche LLP as CBRL’s
independent registered public accounting firm. We will discuss CBRL and its
performance during the past fiscal year, particularly commenting on the results
of business operations of our Cracker Barrel Old Country Store® and Logan’s
Roadhouse® restaurants as well as the strategic initiatives that we implemented
during 2006. Representatives from Deloitte & Touche LLP also will be
available at the meeting, and, following our report, we will try to answer
your
appropriate questions as well as we can.
Your
interest in CBRL and your vote are very important to us, so please review the
Proxy Statement and our Annual Report in detail and return your proxy card
as
soon as possible. We want your vote to be represented at the Annual Meeting.
For
those of you who plan to visit with us in person at the Annual Meeting, we
look
forward to seeing you, and please have a safe trip.
Sincerely,
/s/
Michael A.
Woodhouse
Michael
A.
Woodhouse
October
27,
2006 Chairman,
President and Chief
Executive Officer
[CBRL
GROUP, INC. LOGO]
305
Hartmann Drive
Lebanon,
Tennessee 37087
Notice
of Annual Meeting of Shareholders
|
DATE:
|
Tuesday,
November 28, 2006
|
|
TIME:
|
10:00 a.m.
Central Time
|
|
PLACE:
|
305 Hartmann
Drive
Lebanon,
Tennessee 37087
|
|
ITEMS
OF BUSINESS:
|
1) to elect 11 directors; |
| 2) to approve the selection of Deloitte & Touche LLP as our | |
| independent registered public accounting firm for the 2007 | |
| fiscal year; and | |
| 3) to conduct other business properly brought before the meeting. | |
|
WHO
MAY VOTE:
|
You may vote if you were a shareholder of record on |
| September 29, 2006. | |
|
DATE
OF MAILING:
|
This Proxy Statement and the form of proxy are first being mailed |
| to shareholders on or about October 27, 2006. | |
| By Order of the Board of Directors, | |
| /s/ N.B. Forrest Shoaf | |
| N.B. Forrest Shoaf | |
| Secretary | |
| Lebanon, Tennessee | |
| October 27, 2006 |
TABLE
OF CONTENTS
|
GENERAL INFORMATION
|
1
|
|
VOTING MATTERS
|
3
|
|
PROPOSAL 1: ELECTION OF DIRECTORS
|
6
|
|
BOARD OF DIRECTORS AND COMMITTEES
|
12
|
| EXECUTIVE COMPENSATION |
16
|
| Summary Compensation Table |
16
|
| Option Grants In Last Fiscal Year |
18
|
| Aggregated Option Exercises In Last Fiscal Year And Fiscal Year-End Option Values |
18
|
| Equity Compensation Plan Information |
19
|
|
Do
any
named executive officers have employment agreements?
|
20
|
| What are the terms of Mr. Woodhouse's employment agreement? |
20
|
| Who negotiated the terms of Mr. Woodhouse's employment agreement? |
21
|
| Does CBRL have any other agreements with its named executive officers? |
22
|
| What are the material terms of the change in control agreements? |
22
|
| Has the Board adopted a code of ethics for senior financial officers? |
22
|
| Compensation Committee Interlocks and Insider Participation |
22
|
|
COMPENSATION AND STOCK OPTION COMMITTEE REPORT
|
23
|
|
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
|
28
|
|
AUDIT COMMITTEE REPORT
|
29
|
|
CERTAIN TRANSACTIONS
|
31
|
|
SHAREHOLDER RETURN PERFORMANCE GRAPH
|
32
|
|
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
|
33
|
|
PROPOSAL 2: APPROVAL OF APPOINTMENT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
|
35
|
|
FEES PAID TO AUDITORS
|
36
|
|
SHAREHOLDER PROPOSALS FOR 2007 ANNUAL MEETING
|
37
|
|
SHAREHOLDER COMMUNICATIONS
|
37
|
|
ANNUAL REPORT AND FINANCIAL INFORMATION
|
37
|
|
OTHER BUSINESS
|
38
|
|
AUDIT COMMITTEE CHARTER
|
A-1
|
| FORM OF PROXY CARD |
B-1
|
GENERAL
INFORMATION
What
is this document?
This
document is the Proxy Statement of CBRL Group, Inc. being sent in connection
with our Annual Meeting of Shareholders to be held on Tuesday, November 28,
2006. A form of proxy card accompanies this document.
We
have
tried to make this document simple and easy to understand. The Securities and
Exchange Commission (“SEC”) encourages companies to use “plain English” and we
will always try to communicate with you clearly and effectively. We will refer
to your company throughout as “we,” “us,” the “Company” or “CBRL.”
Is
there any other information that I should be receiving?
Yes.
Along with your Proxy Statement, you should receive a copy of our 2006 Annual
Report, which contains financial and other information about the Company and
our
most recently completed fiscal year, which ended July 28, 2006. References
in
this document to a year (e.g.,
2006),
unless the context clearly requires otherwise, shall mean and be deemed a
reference to the Company’s fiscal year that ended on the Friday closest to July
31 of that year.
Why
am I receiving a proxy statement?
We
are
sending this Proxy Statement and the form of proxy card to you to solicit your
proxy (i.e.,
your
permission) to vote your shares of CBRL stock upon certain matters at the Annual
Meeting. We are required by law to convene an annual meeting of our shareholders
at which directors are elected. Because our shares are widely held, it would
be
impractical, if not impossible, for our shareholders to meet physically in
sufficient numbers to hold a meeting. Accordingly, proxies are solicited from
our shareholders. United States federal securities laws require us to send
you
this Proxy Statement and specify the information contained in it.
Who
is paying the costs of the proxy statement and the solicitation of my
proxy?
CBRL
will
pay all expenses of this solicitation, including the cost of preparing and
mailing this Proxy Statement, and all costs of any proxy solicitor we
employ.
Who
is soliciting my proxy and will anyone be compensated to solicit my
proxy?
Your
proxy is being solicited by and on behalf of our Board of Directors. In addition
to solicitation by use of the mails, proxies may be solicited by our officers
and employees in person or by telephone, facsimile or other means of
communication. Our officers and employees will not be additionally compensated,
but may be reimbursed for out-of-pocket expenses in connection with any
solicitation. We also may reimburse custodians, nominees and fiduciaries for
their expenses in sending proxies and proxy material to beneficial
owners.
1
We
also
retain Corporate Communications, Inc., 523 Third Avenue South, Nashville,
Tennessee to assist in the management of our investor relations and other
shareholder communications issues. Corporate Communications, Inc. receives
a fee
of approximately $2,000 per month, plus reimbursement of out-of-pocket expenses.
As part of its duties, Corporate Communications, Inc. assists us in the general
solicitation of proxies.
We
may
also employ a professional proxy solicitation service, and we will pay all
costs
of that solicitor.
We
will
employ Computershare Trust Company of New York to receive and tabulate the
proxies, and independent inspectors of election will certify the results.
What
is CBRL Group, Inc.?
We
currently are the parent of two wholly-owned subsidiaries, Cracker Barrel Old
Country Store, Inc. (“Cracker Barrel”) and Logan’s Roadhouse, Inc. (“Logan’s”).
As a part of our 2006 strategic initiatives, we plan to sell Logan’s, however,
and we expect that to occur before December 31, 2006. Each of these companies
is
a Tennessee corporation. Through Cracker Barrel, we also own a number of related
operating companies.
Where
is CBRL Group, Inc. located?
Our
corporate headquarters are located at 106 Castle Heights Avenue North, Lebanon,
Tennessee 37087. We conduct our business from there, from Cracker Barrel’s
offices located at 305 Hartmann Drive, Lebanon, Tennessee 37087 and from Logan’s
offices located at 3011 Armory Drive, Suite 300, Nashville, Tennessee 37204.
Our
telephone number is 615.443.9869.
Where
is CBRL Group, Inc. common stock traded?
Our
common stock is traded and quoted on the NASDAQ Global Select Market (“Nasdaq”)
under the symbol “CBRL.”
2
VOTING
MATTERS
What
am I voting on?
You will be voting on the following:
| · |
the election of 11 directors;
|
| · |
the approval of the appointment of our independent registered public
accounting firm, Deloitte
& Touche LLP; and
|
| · |
any other matter properly brought before the Annual
Meeting.
|
Who
is entitled to vote?
You may vote if you owned shares of CBRL common stock at the close of business
on September 29, 2006. Each share of stock is entitled to one vote. As of
September 29, 2006, there were 30,976,505 shares of CBRL common stock
outstanding.
How
do I vote?
In
addition to voting in person at the meeting, you may vote by:
| · |
completing, signing and returning the enclosed proxy card in the
postage-paid envelope;
|
| · |
using the telephone (within the United States and Canada) by calling
1.800.652.8683; or
|
| · |
using the Internet by visiting the following website:
www.computershare.com/expressvote.
|
Please
follow the directions on your proxy card carefully. In order to assist us in
tabulating votes at the Annual Meeting, we encourage you to vote by returning
your proxy card or by using the telephone or Internet, even if you plan to
be
present at the Annual Meeting.
How
will my proxy be voted?
The
individuals named on the proxy card will vote your proxy in the manner you
indicate on the proxy card. If your proxy card is signed but does not contain
specific instructions, your proxy will be voted: “FOR” all nominees in the
election of directors and “FOR” approval of the selection of Deloitte &
Touche LLP as our independent registered public accounting firm.
Can
I change my mind and revoke my proxy?
Yes.
To
revoke a proxy given pursuant to this solicitation, you must:
3
| · |
sign
another proxy with a later date and return it to our Corporate Secretary
at CBRL Group, Inc., P.O. Box 787, Lebanon, Tennessee 37088-0787
at or
before the Annual Meeting;
|
| · |
provide
our Corporate Secretary with a written notice of revocation dated
later
than the date of the proxy at or before the Annual Meeting;
|
| · |
re-vote
by using the telephone and calling
1.800.652.8683;
|
| · |
re-vote
by using the Internet and visiting the following
website:
www.computershare.com/expressvote;
or
|
| · |
attend
the Annual Meeting and vote in person. Note that attendance at the
Annual
Meeting will not revoke a proxy if you do not actually vote at the
Annual
Meeting.
|
What
does it mean if I receive more than one proxy statement or proxy
card?
The
receipt of multiple proxy statements or proxy cards means that you have more
than one account with brokers or our transfer agent. Please vote all of your
shares. We also recommend that you contact your broker and our transfer agent
to
consolidate as many accounts as possible under the same name and address. Our
transfer agent is Computershare Trust Company of New York, which may be
contacted at 1.800.569.3476.
How
will abstentions and broker non-votes be treated?
Abstentions
and broker non-votes will be treated as shares that are present and entitled
to
vote for purposes of determining whether a quorum is present, but will not
be
counted as votes cast either in favor of or against a particular proposal.
What
are broker non-votes?
If
you
are the beneficial owner of shares held in “street name” by a broker, your
broker is the record holder of the shares; however, the broker is required
to
vote those shares in accordance with your instructions. If you do not give
instructions to your broker, your broker may vote the shares with respect to
“discretionary” items, (i.e.,
routine matters such as uncontested elections of directors and appointment
of
the independent registered public accounting firm), but the broker may not
vote
your shares with respect to “non-discretionary” items. In the case of
non-discretionary items, shares for which the owner has not given voting
instructions will be treated as “broker non-votes.” To avoid giving them the
effect of negative votes, broker non-votes are disregarded for the purpose
of
determining the total number of votes cast or entitled to vote with respect
to a
proposal.
4
How
many votes must be present to hold the Annual Meeting?
A
quorum
must be present at the Annual Meeting for any business to be conducted. A quorum
exists if the holders of a majority of the 30,976,505 shares of CBRL common
stock outstanding on September 29, 2006 are present at the meeting, in person
or
by proxy.
How
many votes are needed to elect directors and approve other
matters?
Directors
are elected by a plurality of the votes cast by the holders of shares entitled
to vote at the Annual Meeting. This means that the director nominee with the
most affirmative votes for a particular slot is elected for that slot. You
may
vote in favor of all nominees, withhold your vote as to all nominees or withhold
your vote as to specific nominees.
Except
for the election of directors, each proposal submitted to the shareholders
at
the Annual Meeting will be approved if the number of votes cast for the proposal
exceeds the number of votes cast against it.
Will
my vote be confidential?
Yes.
We
will continue our practice of keeping the votes of all shareholders
confidential. Shareholder votes will not be disclosed to our directors,
officers, employees or agents, except:
| · |
to allow the independent inspectors of election to certify the
results;
|
| · |
as necessary to meet applicable legal requirements and to assert
or defend
claims for or against us;
|
| · |
in the case of a contested proxy solicitation; or
|
| · |
when a shareholder makes a written comment on the proxy card or otherwise
communicates the vote to
management.
|
5
PROPOSAL
1: ELECTION OF DIRECTORS
What
is the structure of the Board of Directors?
Pursuant
to our Bylaws, our Board of Directors must consist of at least five directors,
but the exact number is set by the Board. The Board of Directors currently
has
fixed the size of the Board at eleven. All current directors are standing for
re-election. All directors are elected annually by our
shareholders.
Who
are the nominees this year?
The
nominees for the Board of Directors consist of our eleven current directors.
These nominees are: James D. Carreker, Robert V. Dale, Richard J. Dobkin,
Robert C. Hilton, Charles E. Jones, Jr., B. F. “Jack” Lowery, Martha M.
Mitchell, Erik Vonk, Andrea M. Weiss, Jimmie D. White and Michael A. Woodhouse.
If elected, each nominee would hold office until the 2007 Annual Meeting of
Shareholders and until his or her successor is elected and
qualified.
What
are the backgrounds of this year’s nominees?
|
Name,
Age, Position
with
CBRL
|
First
Became a Director
|
Business
Experience During
Past
Five Years
|
||
|
James
D. Carreker,
59
Director
|
2002
|
Founder
and owner, JDC Holdings, Inc., a private equity and investment firm,
Dallas, TX, since October 2000; Chairman of The Bombay Company, Inc.,
a
home-furnishing retail chain, Fort Worth, TX, from December 2002
to June
2006 and CEO from June 2003 to June 2006; Chairman and CEO, Wyndham
Hotels, a hotel and resort operator and developer, Dallas, TX, from
1995
to October 2000, and President and CEO from 1988 to 1995; President
and
CEO, Trammell Crow Company, Dallas, TX, in 1993-1994; Director, Carreker
Corporation since 1984.
|
||
|
Robert
V. Dale,
69
Director
|
1986
|
Retired;
President, Windy Hill Pet Food Company, Nashville, TN, from March
1995
until its sale in July 1998; Partner in PFB Partnership, Nashville,
TN,
from August 1994 to March 1995; President of
|
6
|
Name, Age, Position
with CBRL
|
First Became
a Director
|
Business Experience During
Past Five Years
|
||
| Martha White Foods, Inc., Nashville, TN, from October 1985 to August 1994; Director, Genesco, Inc. since June 2000. Mr. Dale serves as our Lead Independent Director. | ||||
|
Richard
J. Dobkin,
61
Director
|
2005
|
Retired;
Managing Partner of the Tampa, FL office of Ernst & Young, LLP, an
independent registered public accounting firm, from 1987 until June
2005.
|
||
|
Robert
C. Hilton,
69
Director
|
1981
|
President,
Autumn Capital, an investment firm, Nashville, TN, since August 1999;
Chairman, President and CEO, Home Technology Healthcare, Inc., Nashville,
TN, from October 1991 to August 1999.
|
||
|
Charles
E. Jones, Jr.,
61
Director
|
1981
|
President,
Corporate Communications, Inc., an investor/shareholder communications
and
public relations firm, Nashville, TN.
|
||
|
B.
F. “Jack” Lowery,
69
Director
|
1971
|
Attorney;
Chairman and CEO, LoJac Companies, Inc., an asphalt manufacturing,
paving,
highway construction, building materials supplier and contractor,
Lebanon,
TN.
|
||
|
Martha
M. Mitchell,
66
Director
|
1993
|
Retired;
Senior Partner and Senior Vice President Fleishman-Hillard, Inc.,
an
international communications consulting and public relations firm,
St.
Louis, MO, from January 1987 until July 2005.
|
||
|
Erik
Vonk,
53
Director
|
2005
|
Chairman
and CEO, Gevity HR, Inc., a human resource company, Bradenton, FL, since
April 2002; Retired from June 2001 to April 2002; President and CEO,
Randstad North America, Inc., an international staffing company,
Atlanta,
GA, from June 1992 to February 2001; Director, Danka Business Systems,
PLC
since January 2004.
|
7
|
Name, Age, Position
With CBRL
|
First Became
a Director
|
Business Experience During
Past Five Years
|
||
|
Andrea
M. Weiss,
51
Director
|
2003
|
President
and CEO of Retail Consulting, Inc., a retail consulting firm, since
October 2002; Chairman of Cortefiel Group, SA, a European textile
distributor, since August 2006; President of dELiA*s Corp., a multichannel
retailer to teenage girls and young women, from May 2001 to October
2002;
Executive Vice President and Chief Store Officer of The Limited,
Inc. and
Intimate Brands, Inc., units of Limited Brands, Inc., a women’s retailer,
from May 1998 to February 2001; Director, Tabi International, Inc.
since
2004; Director, eDiets.com, Inc. since July 2004; Director GSI Commerce
Inc. since August 2006.
|
||
|
Jimmie
D. White,
65
Director
|
1993
|
Retired;
Senior Vice President - Finance and CFO of Cracker Barrel Old Country
Store, Inc., the predecessor to CBRL, from 1985 to December
1995.
|
||
|
Michael
A. Woodhouse,
61
Director,
Chairman of the Board, President and Chief Executive
Officer
|
1999
|
Chairman
of the Board since November 23, 2004 and President and CEO of CBRL
since
August 4, 2001; President and COO of CBRL from July 2000 through
August 3,
2001; Executive Vice President and COO of CBRL from July 1999 to
July
2000; Senior Vice President and CFO of CBRL from January 1999 to
July
1999; Senior Vice President Finance and CFO of Cracker Barrel Old
Country
Store, Inc., from December 1995 to December
1998.
|
8
What
if a nominee is unwilling or unable to serve?
If
a
director nominee becomes unwilling or unable to serve, proxies may be voted
for
a substitute nominee designated by our Board of Directors.
Are
there any family relationships between any of the
nominees?
There
are
no family relationships between any of the nominees or executive
officers.
Are
the members of our Board “independent”?
A
majority of our Board members are “independent” in accordance with Nasdaq’s
listing standards and our Corporate Governance Guidelines, which are posted
on
our Internet website at cbrlgroup.com.
Are
the members of our Board required to attend the annual shareholder
meetings?
Our
Board
has adopted a policy that requires all directors to attend the annual
shareholder meetings unless attendance is not feasible owing to unavoidable
circumstances. All Board members who were members at that time attended our
2005
Annual Meeting of Shareholders.
How
are directors nominated?
The
Nominating and Corporate Governance Committee of our Board of Directors is
responsible for identifying and recommending to the Board all persons to be
nominated to serve as a director of CBRL. The committee will consider director
candidates timely submitted by our shareholders in accordance with the notice
provisions as discussed below under “Can shareholders recommend nominees for
directors?”. The committee applies the same criteria to the evaluation of
shareholder-nominated director candidates as it applies to other director
candidates. Our Board is responsible for nominating the slate of directors
for
the Annual Meeting, upon the committee’s recommendation.
How
are nominees identified?
All
director nominees are current directors who are standing for re-election.
Generally, when there is a vacancy to be filled on the Board of Directors,
the
Nominating and Corporate Governance Committee retains a third-party search
firm
to assist in identifying candidates to fill the vacancy. That search firm
reports directly to the committee. The main functions served by the search
firm
include identifying potential candidates who meet the qualification and
experience requirements described below, as well as compiling information
regarding each candidate’s qualifications, experience and independence and
conveying the information to the committee.
9
How
are nominees evaluated; what are the minimum
qualifications?
The
Nominating and Corporate Governance Committee identifies, recruits and
recommends to the Board only those candidates that the committee believes are
qualified to become Board members consistent with the criteria for selection
of
new directors adopted from time to time by the Board. We endeavor to have a
Board representing diverse experience at policy-making levels in business,
marketing, finance and other areas that are relevant to our business. The
committee recommends candidates, including those submitted by shareholders,
only
if the committee believes the candidate’s knowledge, experience and expertise
would strengthen the Board and that the candidate is committed to representing
the long-term interests of all of our shareholders. A majority of the Board
must
consist of independent directors (as defined by Nasdaq’s listing standards and
our Corporate Governance Guidelines). No person who has reached the age of
70 is
eligible for appointment, election or re-election as a director unless that
ineligibility is waived by a majority of the remaining members of the
Board.
The
committee assesses a candidate’s independence, background and experience, as
well as the current Board skill needs and diversity. With respect to incumbent
directors selected for re-election, the committee also assesses each director’s
contributions, attendance record at Board and applicable committee meetings
and
the suitability of continued service. In addition, individual directors and
any
person nominated to serve as a director should possess all of the following
personal characteristics and be in a position to devote an adequate amount
of
time to the effective performance of director duties: integrity and
accountability, informed judgment, financial literacy, cooperative behavior,
record of achievement, loyalty, and ability to consult and advise.
Can
shareholders recommend nominees for directors?
Shareholders
can recommend nominees for directors. If a shareholder wishes to recommend
a
candidate for director, the shareholder must provide notice in writing to the
Chair of the Nominating and Corporate Governance Committee, CBRL Group, Inc.,
c/o Corporate Secretary, P.
O. Box
787, Lebanon, TN, 37088-0787. For consideration at the 2007 Annual Meeting,
the
notice must be received by June 29, 2007. The notice must provide the following
information for each proposed nominee who is not an incumbent director that
the
shareholder wishes to nominate:
| · |
the name, age, business address and residence address of the
person;
|
| · |
the principal occupation or employment of the
person;
|
| · |
the number of shares of common stock that are owned beneficially
or of
record by the person; and
|
| · |
any other information relating to the person that would be required
to be
disclosed in a proxy statement or other filings required to be made
in
connection with solicitations of proxies for election of directors
pursuant to Section 14 of the Securities Exchange Act of 1934 (the
“Exchange Act”) and
related rules and regulations.
|
10
The
notice must also provide the following information about the shareholder giving
the notice:
| · |
the name and record address of the
shareholder;
|
| · |
the number of shares of common stock that are owned beneficially
or of
record by the shareholder;
|
| · |
a description of all arrangements or understandings between the
shareholder and each proposed nominee and any other person or persons
(including their
names) pursuant to which the nomination(s) are to be made by the
shareholder;
|
| · |
a representation that the shareholder intends to appear in person
or by
proxy at the meeting to nominate the person named in the notice;
and
|
| · |
any other information relating to the shareholder that would be required
to be disclosed in a proxy statement or other filings required to
be made
in
connection with solicitations of proxies for election of directors
pursuant to Section 14 of the Exchange Act and related rules and
regulations.
|
The
notice must be accompanied by a written consent of each proposed nominee to
be
named as a nominee and to serve as a director if elected. No director
candidates were recommended by our shareholders for election at the 2006 Annual
Meeting.
What
does the Board of Directors recommend?
Our
Board
of Directors recommends that you vote FOR
the
election of these nominees.
11
BOARD
OF DIRECTORS AND COMMITTEES
How
are directors compensated?
During
2006, each outside director was paid an annual retainer of $45,000, other than
our lead independent director who was paid an annual retainer of $75,000. Each
outside director also was paid a director’s fee of $1,500 for each committee
meeting attended, other than the Audit Committee and the Compensation and Stock
Option Committee members who were paid $2,000 for each committee meeting
attended. The chair of each committee, other than the Audit Committee and the
Compensation and Stock Option Committee, was paid an additional annual retainer
of $8,000, while the chair of the Audit Committee was paid an additional annual
retainer of $18,000 and the chair of the Compensation and Stock Option Committee
was paid an additional annual retainer of $13,000. We reimburse all non-employee
directors for out-of-pocket expenses incurred in connection with attendance
at
meetings. Directors who also are employees of CBRL are not paid director’s fees
or a retainer.
Directors
also are offered the option to participate in our Deferred Compensation Plan.
The Deferred Compensation Plan allows a participant to defer a percentage or
sum
of his or her compensation and earn interest on that deferred compensation
at a
rate equal to the 10-year Treasury bill rate (as in effect at the beginning
of
each calendar quarter) plus 1.5%.
Pursuant
to our CBRL 2002 Omnibus Incentive Compensation Plan, as amended (the “Omnibus
Plan”), as of the 2005 Annual Meeting, each non-employee director who is elected
at the Annual Meeting shall receive an option to purchase 1,000 shares of CBRL
common stock at fair market value, 1/3 of which will vest and become exercisable
each year beginning on the first anniversary date of the option grant date,
and
a grant of 2,000 shares of restricted stock that vests in its entirety three
years from the date of the grant.
Director
compensation for 2007 remains in effect without modification, except that each
year upon election/re-election to the Board of Directors, non-employees will
receive an annual option to purchase 2,000 (instead of 1,000) shares of CBRL
common stock, 1/3 of which will vest and become exercisable each year beginning
on the first anniversary date of the option grant date.
Mr.
Woodhouse, our Chairman of the Board, President and Chief Executive Officer,
is
compensated pursuant to his employment agreement and certain benefit plans
described below under “Executive Compensation” and received no additional
benefits as a result of his service on the Board.
How
often did the Board of Directors meet in 2006?
Our
Board of
Directors met seven times during 2006. Each director attended at least 75%
of
the combined total of all meetings of the Board and all meetings of the
committee(s) on which he or she served.
12
What
are the committees of the Board?
Our
Board
has the following standing committees: Audit, Compensation and Stock Option,
Nominating and Corporate Governance, Public Responsibility, and Executive.
All
members of the Audit, Compensation and Stock Option, and Nominating and
Corporate Governance committees are independent under Nasdaq’s listing standards
and our Corporate Governance Guidelines, and our Board has adopted a written
charter for each of these committees. A copy of each of these charters, as
well as our Corporate Governance Guidelines, are posted on CBRL’s Internet
website at cbrlgroup.com, and the Audit Committee Charter is also included
as
Appendix A to this Proxy Statement. Current information regarding all of our
standing committees is set forth below.
|
Name
of
Committee
& Members
|
Functions
of
the
Committee
|
Number
of Meetings in 2006
|
||
|
AUDIT:
Robert
C. Hilton, Chair
Robert
V. Dale
Richard
J. Dobkin
Jimmie
D. White
|
·
Appoints
and oversees outside auditors
· Acts
as liaison between the Board and outside auditors
· Discusses
the independence of our outside auditors
· Responsible
for developing procedures to receive information
and address complaints regarding the status of our financial
condition and effectiveness of our internal controls or audit
process
· Reviews
internal accounting controls and systems, including
internal audit plan
· Reviews
results of the annual audit and related financial reports
· Reviews
quarterly earnings press releases and financial results
· Reviews
our significant accounting policies and any changes to
those policies
· Pre-approves
new or renewal transactions between the
Company
and related parties and annually reviews and confirms
on-going contractual or lease obligations with related
parties
· Sole
authority to hire, terminate, and approve compensation for
the Vice President, Internal Audit and
|
10
|
13
|
Name of
Committee & Members
|
Functions of
the Committee
|
Number
of
Meetings
in 2006
|
||
|
Loss Prevention
· Sole
authority to hire, terminate and approve payments to the
independent registered public accounting firm
· Determines
financial expertise and continuing education
requirements of members of the committee
|
||||
|
|
||||
|
COMPENSATION
AND STOCK OPTION:
Robert
V. Dale, Chair
James
D. Carreker
Charles
E. Jones, Jr.
Andrea
M. Weiss
|
· Reviews
and recommends salaries, bonuses and other cash
compensation
of executive officers
·
Administers
compensation plans for executive officers, and
approves all option grants and stock grants
· Reviews
executive management’s performance, particularly
with
respect to financial goals for the concluding fiscal year
|
9
|
||
|
NOMINATING
AND CORPORATE GOVERNANCE:
Robert
V. Dale, Chair
Charles
E. Jones, Jr.
Martha
M. Mitchell
Erik
Vonk
|
· Considers
and recommends to the Board nominees for director
· Considers
nominees recommended by shareholders in writing
prior to the
annual deadline for submission of shareholder
proposals
· Reviews
and recommends changes to corporate governance
policies and practices
· Reviews
and recommends candidates to serve on Board
committees
· Reviews
annual Board self-assessment
|
3
|
||
|
PUBLIC
RESPONSIBILITY:
Martha
M. Mitchell, Chair
James
D. Carreker
B.F.
“Jack” Lowery
Andrea
M. Weiss
Jimmie
D. White
|
· Oversees
the Company’s corporate citizenship policies and
activities and recommends to the Board policies and initiatives
that will effectively position the Company with its
various
constituencies
· Determines
how public policies affect the Company and its
various constituencies
|
2
|
||
14
|
Name of
Committee & Members
|
Functions of
the Committee
|
Number
of
Meetings
in 2006
|
||
|
EXECUTIVE:
Michael
A. Woodhouse, Chair
James
D. Carreker
Robert
V. Dale
Robert
C. Hilton
Charles
E. Jones, Jr.
B.
F. “Jack” Lowery
|
· Meets
at the call of the Chairman of the Board
· Meets
when the timing of certain actions makes it appropriate
to convene the Committee rather than the entire Board
·
May
carry out all functions and powers of the Board subject to
certain exceptions under applicable law
· Advises
senior management regarding actions contemplated by
CBRL
whenever it is not convenient or appropriate to convene
the entire Board
|
0
|
15
EXECUTIVE
COMPENSATION
The
following tables discuss the compensation earned during the last three fiscal
years by our Chief Executive Officer and our four other most highly compensated
executive officers as of the end of 2006. In addition, the table contains
information on one executive who would have been included but for the fact
that
he was not an executive as of the end of 2006. We will refer to these officers
as our “named executive officers,” or “NEOs”, throughout this
document.
|
Summary
Compensation Table
|
|||||||
|
Annual
Compensation
|
Long-Term
Compensation
|
||||||
|
Name
and Principal
Position
in FY 2005
|
Year
|
Salary
($)
|
Bonus
($)
|
Restricted
Stock
Awards
($)(1)
|
Securities
Underlying
Options
Granted
(Shares)
|
All
Other Compensation
($)(2)
|
|
|
Michael
A. Woodhouse,
Chairman,
President and
Chief
Executive Officer
|
2006
2005
2004
|
937,500
867,235
800,000
|
-0-(3)
1,797,473
959,512
|
--(4)
4,891,250(4)
--
|
145,330
78,652
90,347
|
2,719,170
338,653
562,128
|
|
|
Lawrence
E. White,
Senior
Vice President,
Finance
and Chief Financial
Officer
|
2006
2005
2004
|
425,000
390,000
360,000
|
-0-(3)
404,166
287,854
|
--
498,300
--
|
24,202
12,135
25,000
|
633,060
63,543
100,357
|
|
|
N.B.
Forrest Shoaf,(5)
Senior
Vice President and
General
Counsel
|
2006
2005
2004
|
309,000
93,182
--
|
-0-(3)
77,253
--
|
--
283,206(6)
--
|
14,664
7,000
--
|
577,820
4,858
--
|
|
|
Cyril
J. Taylor,(7)
President
and Chief
Operating
Officer—Cracker
Barrel
Old Country Store, Inc.
|
2006
2005
2004
|
475,000
408,333
288,625
|
222,015
331,165
191,967
|
443,000(8)
--
--
|
33,119
17,729
15,000
|
131,718
67,985
93,617
|
|
|
G.
Thomas Vogel,
President
- Logan’s
Roadhouse,
Inc.
|
2006
2005
2004
|
375,000
299,231
250,000
|
219,804
363,000
208,000
|
--
--
251,775
|
23,075
8,764
14,533
|
236,354
40,183
256,624
|
|
|
David
L. Gilbert(9)
Chief
Administrative
Officer—Cracker
Barrel
Old
Country Store, Inc.
|
2006
2005
2004
|
364,000
350,000
335,000
|
136,945
255,679
251,816
|
364,165(10)
--
--
|
17,403
26,292
20,000
|
78,670
53,741
111,518
|
|
(1)
Includes
the dollar value of shares of restricted stock granted during the applicable
fiscal year, excluding Mid-Term Incentive Retention Plan (“MTIRP”)
awards
denominated in shares (see Footnote 2). All restricted stock awards were
valued
at the closing price of CBRL Group, Inc. common stock on the
applicable grant date. As of the end of 2006, the NEOs had holdings of unvested
restricted stock as follows: Mr. Woodhouse, 142,871 shares valued at
$4,630,449; Mr. White, 17,757 shares valued at $575,504; Mr. Shoaf, 7,594
shares
valued at
16
|
$246,122;
Mr. Taylor, 14,289 shares valued at $463,106; Mr. Vogel, 9,491 shares
valued at $307,603 and Mr. Gilbert, 2,566 shares valued at $83,164.
Values
are based upon the closing market price on July 28, 2006 of $32.41.
All
restricted stock vests in greater than three years from the date
of the
grant date, with the exception of certain shares held by Mr. Woodhouse
(see Footnote 4), Mr. Shoaf (see Footnote 6) and those granted to
NEOs
under the 2005 MTIRP that vest on August 3, 2007. Dividends are not
paid
on any unvested shares; however, dividends accrue to unvested shares
of
restricted stock granted under the MTIRP.
|
|
| (2) |
Amounts
shown in this column for 2006 include awards granted under the 2005
and
2006 MTIRPs, interim share ownership awards, the 2006 Success Plan
awards
and certain insurance premiums and relocation expenses. The MTIRP
awards
cliff vest at the end of 2007 and 2008, respectively. The following
amounts were accrued during 2006 for each of the NEOs: Mr. Woodhouse,
$506,771; Mr. White, $78,500; Mr. Shoaf, $35,714; Mr. Taylor, $120,192;
Mr. Vogel, $63,500 and Mr. Gilbert, $69,900 (this amount was forfeited
by
Mr. Gilbert upon his resignation (see Footnote 8)). Amounts accrued
during
2006 for interim share ownership awards as outlined in the Ownership
Incentive Plan were: Mr. Woodhouse, $45,374; Mr. White, $9,723; Mr.
Shoaf,
$3,321 and Mr. Vogel, $6,482.
|
|
Amounts
earned under the 2006 Success Plan represent awards for successful
implementation of the Company’s 2006 “Dutch auction” tender offer and
related $1.25 billion credit facility, or, in the case of Mr. Vogel,
efforts undertaken in connection with the proposed Logan’s Roadhouse, Inc.
divestiture. The following amounts, though earned during 2006, are
not
payable until six months after all conditions set forth in the 2006
Success Plan are satisfied: Mr. Woodhouse, $2,109,500; Mr. White,
$526,000; Mr. Shoaf, $526,000 and Mr. Vogel, $152,900. Additionally,
if
and when the Logan’s Roadhouse, Inc. divestiture is completed, certain of
the NEOs could earn up to the following additional amounts under
the 2006
Success Plan: Mr. Woodhouse, $2,109,500; Mr. White, $526,000; Mr.
Shoaf, $526,000 and Mr. Vogel, $691,100.
|
|
|
Amounts
shown in this column for 2006 for premiums paid on life and disability
insurance are: Mr. Woodhouse, $16,500; Mr. White, $7,950; Mr. Shoaf,
$7,071; Mr. Taylor, $4,950; Mr. Vogel, $7,071 and Mr. Gilbert, $4,550;
and
CBRL’s contributions to its 401(k) Employee Savings Plan and any
non-qualified deferred compensation plan for each named executive
officer
in 2006. Also includes $13,472 in 2006 for moving expenses reimbursed
to
Mr. Vogel.
|
|
| (3) |
Messrs.
Woodhouse, White and Shoaf received no bonus during 2006 because
the
strategic initiatives undertaken by the Company to increase shareholder
value resulted in lower net income at the Company disqualifying each
of
them for their bonuses. Subsequent to the end of the fiscal year,
the
Compensation and Stock Option Committee determined that Messrs. Woodhouse,
White and Shoaf should not have been adversely affected by implementing
measures that were designed to and did result in substantial shareholder
value. Accordingly, the Compensation and Stock Option Committee determined
to pay these executives bonuses based upon what they would have earned
had
the Company’s earnings not been adversely affected by the implementation
of these strategic initiatives as follows: Mr. Woodhouse, $1,232,315;
Mr.
White, $307,257 and Mr. Shoaf, $162,468. These bonuses will be reflected
in the Summary Compensation Table in the proxy statement sent in
connection with the 2007 Annual Meeting of
Shareholders.
|
| (4) |
The
restricted stock award made in 2005 consisted of 125,000 shares of
restricted stock that vest 60% on September 15, 2008, 20% on September
15,
2009 and 20% on September 15, 2010, subject to achieving performance
criteria relative to Earnings Before Interest, Taxes, Depreciation,
Amortization and Rent. Dividends will not be paid on any unvested
shares.
This award was terminated and a replacement award was made on July
27,
2006 of an equal number of shares vesting on the same schedule. The
only
change in the replacement award was to modify the performance criteria
to
reflect the potential divestiture of Logan’s Roadhouse, Inc. The value of
the replacement award on the grant date was $4,067,500, which was
less
than its value when originally granted in 2005.
|
| (5) |
Mr.
Shoaf joined the Company on April 11, 2005.
|
| (6) |
Represents
7,000 shares of restricted stock that vest 60% on April 11, 2008,
20% on
April 11, 2009 and 20% on April 11, 2010. Dividends will not be paid
on
any unvested shares.
|
| (7) | During 2004, Mr. Taylor served as Senior Vice President of Operations of Cracker Barrel Old Country Store, Inc. Mr. Taylor retired from the Company on July 28, 2006. |
| (8) |
Represents
10,000 shares of restricted stock that were to cliff vest on March
16,
2011. Upon Mr. Taylor’s retirement from Cracker Barrel Old Country Store,
Inc. on July 28, 2006, these shares were forfeited.
|
| (9) |
Mr.
Gilbert resigned from the Company effective July 15,
2006.
|
| (10) |
Represents
10,525 shares of restricted stock that were to cliff vest on September
22,
2010. Upon Mr. Gilbert’s resignation, these shares were
forfeited.
|
17
Option
Grants In Last Fiscal Year
|
Name
|
Number
of Securities Underlying Options Granted
|
%
of Total Options Granted to Employees in Fiscal
Year
|
Exercise
or Base Price ($/Share)(1)
|
Expiration
Date
|
Potential
Realizable
Value
at Assumed
Annual
Rates of Stock
Price
Appreciation for
Option
Term(2)
|
|
|
5%
|
10%
|
|||||
|
Mr.
Woodhouse
|
145,330
|
17.93%
|
$34.60
|
9/22/2015
|
$
3,162,345
|
$
8,014,003
|
|
Mr.
White
|
24,202
|
2.99%
|
$34.60
|
9/22/2015
|
$
526,630
|
$
1,334,583
|
|
Mr.
Shoaf
|
14,664
|
1.81%
|
$34.60
|
9/22/2015
|
$
319,085
|
$
808,624
|
|
Mr.
Taylor
|
33,119
|
4.09%
|
$34.60
|
9/22/2015
|
$
720,661
|
$ 1,826,297
|
|
Mr.
Vogel
|
23,075
|
2.85%
|
$34.60
|
9/22/2015
|
$
502,106
|
$
1,272,436
|
|
Mr.
Gilbert
|
17,403(3)
|
2.15%
|
$34.60
|
9/22/2015
|
$
378,685
|
$
959,662
|
(1) The
exercise price of the options granted equals the closing market price during
normal trading hours of our common stock on the grant date. The options
generally vest and become exercisable at a cumulative rate of 33-1/3% per year.
All remaining options also vest upon a defined change in control of
CBRL.
(2) The
potential realizable values illustrate values that might be realized upon
exercise immediately prior to the expiration of the option term using 5% and
10%
appreciation
rates
from the price at the grant date (which is equal to the exercise price), as
required by the SEC, compounded annually. These values do not,
and are not intended to, forecast possible future appreciation, if any, of
CBRL’s stock price. Also, these values do not take into consideration any
provisions
for vesting over a period of years or termination of options following
termination of employment.
(3) Mr.
Gilbert resigned from the Company effective July 15, 2006. Accordingly, 11,602
of these securities underlying the options granted to Mr. Gilbert in 2006
were
forfeited effective September 30, 2006.
Aggregated
Option Exercises In Last Fiscal Year
And
Fiscal Year-End Option Values
|
#
Shares Acquired Upon Exercise
|
Value
Realized(1)
|
Number
of Securities Underlying Unexercised Options
at FY-End
|
Value
of Unexercised
In-The-Money
Options at
FY-End(2)
|
|||
|
Name
|
Exercisable
|
Unexercisable
|
Exercisable
|
Unexercisable
|
||
|
Mr.
Woodhouse
|
0
|
$
0
|
627,486
|
227,880
|
$ 6,961,282
|
$0
|
|
Mr.
White
|
0
|
$
0
|
82,258
|
40,626
|
$
716,135
|
$0
|
|
Mr.
Shoaf
|
0
|
$
0
|
2,334
|
19,330
|
$ 0
|
$0
|
|
Mr.
Taylor
|
0
|
$
0
|
59,275
|
49,938
|
$ 504,475
|
$0
|
|
Mr.
Vogel
|
10,752
|
$
51,995
|
0
|
32,832
|
$
0
|
$0
|
|
Mr.
Gilbert
|
0
|
$
0
|
45,431
|
41,598
|
$
206,039
|
$0
|
(1) Value
realized is calculated based on the difference between the fair market value
of
the securities underlying the option and the exercise or base price of the
options at exercise or fiscal year-end, respectively.
(2) The
last
trade of CBRL common stock, as reported by Nasdaq on July 28, 2006, was at
$32.41. That price was used in calculating the value of unexercised
options.
18
Equity
Compensation Plan Information
The
following table summarizes share and exercise price information about our equity
compensation plans as of July 28, 2006.
|
Plan
Category
|
Number
of
Securities
to be
Issued
Upon
Exercise
of
Outstanding
Options, Warrants and
Rights
|
Weighted-Average
Exercise
Price of
Outstanding
Options,
Warrants
and Rights
|
Number
of Securities
Remaining
Available for
Future
Issuance Under
Equity
Compensation
Plans
(Excluding Securities Reflected in Column (A))
|
|
(A)
|
(B)
|
(C)
|
|
|
Equity
compensation plans approved by security holders (1)
|
3,197,575
|
$27.07
|
2,241,128
|
|
Equity
compensation plans not approved by security holders (2)
|
955,643
|
$29.63
|
0
|
|
Total
|
4,153,218
|
$27.66
|
2,241,128
|
(1) These
plans consist of our Amended and Restated Stock Option Plan, as amended; 1989
Stock Option Plan for Non-Employee Directors, as amended; and
2002 Omnibus Incentive Compensation Plan, as amended.
(2) This
plan
category consists of awards to non-officer employees under our 2000
Non-Executive Stock Option Plan.
Material
features of the 2000 Non-Executive Stock Option Plan (the “Stock Option
Plan”)
General.
The
Stock
Option Plan provides for the grant of stock options to non-officer employees.
As
of September 29, 2006, we have outstanding stock options under the Stock Option
Plan for future exercise of 925,922 shares of our common stock. There are no
shares of CBRL common stock reserved for future issuance under the Stock Option
Plan.
Eligibility.
The
persons eligible to participate in the Stock Option Plan as recipients of
options are employees of the Company or any of its subsidiaries who are not
officers or directors of the Company. In addition, any person who is a
participant in the long-term incentive program is not eligible to participate
in
or receive options under the Stock Option Plan.
Option
Price; Payment.
The
option price per share is the fair market value of the Company’s common stock.
From time to time the Compensation and Stock Option Committee selects, from
among those who are eligible, the individuals to whom options are granted and
determines the number of options to be granted. The date of the grant is
determined by the date on which the option recommendation is approved or
selection of an employee as a participant in any grant under the Stock Option
Plan is made by the Compensation and Stock Option Committee.
Shares
purchased by exercising an option must be paid in full by delivery to the
Company of consideration equal to the product of each option price and the
number of shares purchased, plus applicable taxes. The consideration must be
paid in cash or by check. The option price may also
19
Term.
Each
option specifies the rate at which the option vests or becomes exercisable,
which is in the discretion of the Compensation and Stock Option Committee.
Each
option expires at the end of a specified period, which shall not exceed 10
years. The option may expire earlier or even terminate if employment is
terminated. The Stock Option Plan expired on July 29, 2005.
Do
any named executive officers have employment agreements?
Yes.
We
have an employment agreement with Mr. Woodhouse.
What
are the terms of Mr. Woodhouse’s employment agreement?
Under
the
agreement, Mr. Woodhouse serves as the Chief Executive Officer of the Company
and also is required to hold either the title of Chairman or President. Unless
extended or earlier terminated, the agreement will terminate on July 31, 2008.
Beginning August 1, 2008, the agreement automatically will be extended for
one-year terms on each annual anniversary of the effective date of the agreement
unless either Mr. Woodhouse or the Company gives at least twelve months notice
of that party’s intention to allow the agreement to expire at the next
anniversary date. Additionally, in the event of a “change in control” (as
defined below), the then existing term of the agreement is extended for two
years.
Mr.
Woodhouse’s employment agreement currently provides for the payment of an annual
salary in the amount of $950,000, which may be increased from time to time
as
well as a target bonus potential of no less than 150% of Mr. Woodhouse’s base
salary, subject to the satisfaction of such performance and other criteria
as
may be established by the Company’s Compensation and Stock Option Committee. The
agreement originally provided for Mr. Woodhouse to receive a restricted stock
grant of 125,000 shares, which would vest 60% on September 15, 2008, 20% on
September 15, 2009, and 20% on September 15, 2010, subject to achieving
performance criteria established by the Committee relative to Earnings Before
Interest, Taxes, Depreciation, Amortization and Rent (as defined in the
agreement). However, this restricted stock award was terminated on July 27,
2006
and a replacement award was entered into. This replacement award is identical
to
the original grant, except that the performance criteria were modified to
reflect the potential divestiture of Logan’s Roadhouse, Inc. The agreement also
establishes bonus targets (as a percentage of base salary) for Mr. Woodhouse’s
participation in the Company’s annual incentive and retention plans for
officers, which plans are more fully described in the Compensation and Stock
Option Committee Report.
In
the
event CBRL terminates Mr. Woodhouse’s employment without “cause” (as defined in
the agreement), the agreement entitles him to a severance payment equal to
the
unpaid amount due during the employment term prior to the termination, plus
three times his annual salary in effect on the date of termination, as well
as a
lump sum cash distribution determined by a formula based on his unvested stock
options which otherwise would have vested during the current term. Any unvested
restricted stock granted to Mr. Woodhouse under the agreement will vest and
become distributable. The agreement specifies that Mr. Woodhouse’s participation
in
20
CBRL’s
life, medical and disability insurance programs will continue if his employment
is terminated by CBRL without “cause” for up to twenty-four months or the
expiration of the term of the agreement, so long as he is not employed elsewhere
and covered by that employer’s benefit plans. The agreement also describes
rights to compensation if Mr. Woodhouse’s employment is terminated or suspended
due to death, disability or “cause.” This agreement generally does not preclude
Mr. Woodhouse from participating in any other CBRL benefit plan or arrangement.
In
the
event of a “change in control” (as defined below) and Mr. Woodhouse is
terminated for reasons other than “cause,” the Company is required to pay Mr.
Woodhouse, in addition to any amounts owed through the date of termination
of
employment, including a prorated portion of any then existing incentive or
bonus
plan applicable to Mr. Woodhouse, three times the sum of: (i) his average annual
base salary for the three fiscal years prior to the termination; and (ii) the
greater of: (x) his actual annual incentive bonus for the fiscal year
immediately preceding the date of termination; or (y) his target bonus for
the
year in which the termination date falls. Also, the restricted stock grant
vests
and becomes distributable, subject to the achievement of performance goals
through the end of the fiscal quarter prior to the date of termination. With
respect to any unvested stock options that would have vested during the term
of
the agreement, the Company is required to pay Mr. Woodhouse an amount equal
to
the difference between the market value and the exercise price(s) of the shares
subject to such options. Mr. Woodhouse’s participation in the life, medical and
disability insurance programs of the Company continues for up to thirty-six
months following termination of the agreement.
A
“change
in control” means any change in control reportable as required by the federal
securities laws, but specifically including: (a) any person becoming a
beneficial owner of 35% or more of the Company’s voting securities, unless that
acquisition was approved or ratified by a vote of at least 2/3 of the members
of
the Company’s Board of Directors prior to the acquisition, (b) all or
substantially all of the assets of the Company are sold or transferred, (c)
shareholders approve a plan of liquidation or dissolution, or (d) a majority
of
the members of the Board of Directors change (unless approved by majority of
those directors who were directors at the beginning of the term of the
agreement).
The
agreement contains certain business protection provisions that include a
requirement that Mr. Woodhouse not disclose confidential information or trade
secrets of the Company and a requirement that, during the term of the agreement
and for two years following its termination, Mr. Woodhouse will neither solicit
employees of the Company to leave their employment nor hold any position with
any entity engaged wholly or in material part in the restaurant or retail
business that is similar to that in which the Company or any of its affiliates
is engaged.
Who
negotiated the terms of Mr. Woodhouse’s employment
agreement?
The
terms
were negotiated by the Compensation and Stock Option Committee and Mr.
Woodhouse, each of whom were represented by separate independent legal
counsel.
21
Does
CBRL have any other agreements with its named executive
officers?
Yes.
On
September 30, 1999, our Board of Directors approved a plan responding to change
in control issues. The plan is based on recommendations from an independent,
outside compensation consultant and is designed to encourage retention of key
employees. Some of our senior officers, including some of the named executive
officers, and other key personnel have been provided agreements stating that
upon a “change in control,” they will receive specified salary payments and
other benefits.
What
are the material terms of the change in control
agreements?
The
change in control agreements provide that the named executive officers, other
than Mr. Woodhouse, will receive specified benefits if after a “change in
control” there is: (1) a material change in duties or responsibilities resulting
in the assignment of duties and responsibilities inferior to the duties and
responsibilities in effect at the time of change in control, (2) a reduction
in
salary or a material change in benefits (excluding discretionary bonuses),
or
(3) a change in the location of work assignments from the location at the time
of change in control to any other location that is further than 50 miles away
from the location at the time of change in control. The salary payments will
equal 2.00 or 2.99 times the average salary and bonus for the 3 years prior
to a
change in control (including, when required, a gross-up payment to cover excise
taxes), and benefits will include continuation of and payments for health
benefits for a 2-year period. The agreements define “change in control” to
include certain circumstances in which a person becomes the beneficial owner
of
securities representing 20% or more of the combined voting power of our voting
stock, a majority of our Board changes within a 2-year period, or we merge,
consolidate or reorganize.
Has
the Board adopted a code of ethics for senior financial
officers?
The
Board
of Directors has adopted a code of ethics for its senior financial officers,
as
defined by SEC regulations, that applies to CBRL’s chief executive officer,
chief financial officer, and chief accounting officer. This code of ethics
is
posted on CBRL’s Internet website at cbrlgroup.com. Any amendments to, or a
waiver from, a provision of this code of ethics will be posted on CBRL’s
Internet website.
Compensation
Committee Interlocks and Insider Participation
No
member
of the Compensation and Stock Option Committee has been an officer or employee
of CBRL or any of our subsidiaries at any time, and no relationships exist
requiring disclosure under applicable regulations of the SEC. None of our
executive officers has served on the board of directors or on the compensation
committee of any other entity, any of whose executive officers served either
on
our Board or on our Compensation and Stock Option Committee.
22
COMPENSATION
AND STOCK OPTION
COMMITTEE
REPORT
What
is the Compensation and Stock Option Committee and what does it
do?
The
Compensation and Stock Option Committee of the Board of Directors (the
“Compensation Committee”) establishes the salaries and other compensation of the
Chairman and CEO, the other executive officers named in the Summary Compensation
Table, and other selected senior executives of the Company. The Compensation
Committee also is charged with the responsibility to review and approve the
Company’s executive compensation and benefits plans and policies, and the
administration of all executive compensation programs, incentive compensation
plans and equity-based plans currently in place at the Company. As it deems
necessary, the Compensation Committee engages independent compensation
consultants and counsel to advise the Compensation Committee on all matters
related to CEO and other executive compensation. In 2006, an independent
consultant was engaged for the purpose of conducting a competitive review
of
executive compensation, including long-term incentive compensation
levels.
There
were 9 meetings of the Compensation Committee in 2006, all of which involved
executive sessions with no Company employees present.
Are
the members of the committee “independent”?
This
committee is comprised of four directors, all of whom are independent
as
determined in accordance with Nasdaq’s listing standards and our Corporate
Governance Guidelines.
Has
the committee adopted a Charter?
On
May 24,
2001, the Board of Directors adopted a Compensation and Stock Option
Committee
Charter to govern this committee. A copy of that Charter is posted
on CBRL’s
Internet website at cbrlgroup.com.
What
is the philosophy and objective of executive compensation?
The
compensation program for executive officers is designed to:
| · |
Emphasize
performance-based compensation;
|
| · |
Encourage
strong financial performance by establishing aggressive goals
and highly
leveraged incentive programs; and
|
|
·
|
Encourage executive stock ownership and alignment with shareholder interests by providing a significant portion of compensation in CBRL common stock. |
23
The
Compensation Committee believes that compensation paid to executive officers
should be closely aligned with the performance of the Company on both a
short-term and long-term basis and that such compensation should assist the
Company in attracting and retaining key executives critical to its long-term
success. To that end, it is the view of the Compensation Committee that the
total compensation program for executive officers should consist primarily
of
the following:
| · |
Base
Salaries;
|
| · |
Annual
incentive awards; and
|
|
· |
Long-term incentive compensation (e.g., stock options and restricted stock grants). |
Base
salaries are targeted to be competitive at the 60th percentile and total
compensation generally is targeted to be competitive at the 75th percentile
of
the market for positions of similar responsibilities as determined by our
independent outside compensation consultant. We consider it necessary and
appropriate to position compensation packages at these levels to attract, retain
and motivate executives and other key management personnel with the essential
qualifications for managing our operations and growth.
Can
you more fully describe the elements of executive compensation?
Base
Salary.
The 2006
salaries of the named executive officers are shown in the “Salary” column of the
Summary Compensation Table. Salaries for executive officers are reviewed on
an
annual basis, as well as at the time of a promotion or other change in
responsibilities. Increases in salary are based on subjective evaluation of
such
factors as the individual’s level of responsibility, performance and level of
pay compared to Company peer group pay levels. Merit increases normally take
effect on August 1st of each year. In setting the base salary for each executive
officer, the Compensation Committee generally reviews the then-current salary
for each of the officers in relation to average salaries within the industry
for
comparable areas of responsibility as presented in a report prepared for the
Compensation Committee by its independent executive compensation consultant.
The
Compensation Committee also considers the contribution made by each executive
officer during the prior fiscal year, as reported by the Chief Executive
Officer, and the salary recommendations made by the Chief Executive Officer,
based on information prepared by management, for the executive officers other
than the Chief Executive Officer. Except for recommendations from management,
the Compensation Committee employs procedures similar to those used for each
of
the other executive officers to determine the salary for the Chief Executive
Officer.
Annual
Incentive Awards.
This
Compensation Committee has continued, and will continue, the policy that the
financial performance of CBRL should be a significant factor in rewarding our
executive officers. In July of each year, this committee reviews the expected
financial performance of CBRL for the concluding fiscal year and considers
the
internal budget established for the next fiscal year in setting certain
financial goals and specific objective criteria for annual incentive awards
for
executives.
Annual
incentive awards are determined as a percentage of each executive officer’s base
salary. The Compensation Committee determines the performance measures and
other
terms and
24
The
2006
annual incentive awards for the named executive officers are shown in the
“Bonus” column of the Summary Compensation Table.
Long-Term
Incentives. Our
long-term incentive program in effect in 2006 for executive officers was
designed to recognize market effects on senior management compensation, to
foster a long-term commitment to us and our subsidiaries, to encourage future
performance that contributes to stock price appreciation, to align shareholder
and executive long-term interest, and to provide a comprehensive method of
compensating executive officers while balancing our costs. Our officers’
long-term incentive is comprised of two parts: a stock option and separate
“Mid-Term Incentive Retention Plan Award” (“MTIRP Award”). MTIRP Awards consist
of, at the election of the executive, either 50% restricted stock and 50% cash,
or 100% restricted stock. In either case, the 2006 MTIRP Award vests at the
end
of 2008.
Stock
Options.
In
contrast to salary and bonus awards, which generally are for past effort and
performance, annual stock options are intended to engender loyalty and
commitment to CBRL and to encourage future performance that contributes to
stock
price appreciation. They generally are granted at an exercise price that is
equal to the closing market price of CBRL common stock when the option is
granted and, therefore, have no realizable value to the option holder until
the
stock trading price increases. The number of shares subject to the stock option
under the long-term incentive program is determined first by determining a
value
that is equal to a participant’s target percentage times the participant’s
applicable base salary times a performance factor based on degree of achievement
of the Company’s or subsidiaries’, as applicable, 2006 performance relative to
the Company’s or subsidiaries’, as applicable, 2006 annual plans. For 2006, the
targets for executive officers ranged from 50% to 175% of base salary depending
on the officer’s position (175% for Mr. Woodhouse, 87.5% for Mr. Taylor, 60% for
Messrs. White, Vogel and Gilbert, and 50% for Mr. Shoaf). This value is divided
by a generally accepted option valuation methodology to determine the number
of
stock options awarded (with a minimum award of 2,500 shares). These options
are
awarded after the 2006 Company performance is reviewed and certified by the
Compensation Committee.
MTIRP
Awards.
MTIRP
Awards, issued under the 2006 Mid-Term Incentive Retention Plan, were comprised
of restricted stock or restricted stock and cash and were awarded for
achievement of certain pre-established goals consisting of revenue growth and
return on average adjusted invested capital (as defined in the plan) during
2006
for the Company or its subsidiaries, as applicable. MTIRP Awards, while earned
based on 2006 actual results, cliff vest at the end of 2008. Dividends on these
shares of restricted stock accrue until vesting.
25
The
MTIRP
award is equal to a percentage of a participant’s 2006 base salary. The
percentage varies depending on whether the target or maximum performance goal
is
satisfied. The minimum MTIRP Award is equal to 50% of a participant’s target
percentage times a participant’s 2006 base salary. In 2006, only the minimum
MTIRP Award was earned.
The
2006
long term annual incentive awards for the named executive officers are included
in the “Securities Underlying Options Granted” and “All Other Compensation”
columns of the Summary Compensation Table.
Does
the Company provide any other compensation to named executive officers?
Yes.
From time to time the Compensation Committee has deemed it appropriate to
award restricted shares or additional options to individuals for hiring
inducement, performance or retention purposes. Such awards for named executive
officers are included in the “Restricted Stock Awards” and “Securities
Underlying Options Granted” columns of the Summary Compensation Table.
Also,
the
2006 Success Plan was adopted this past year in order to retain the services
of
certain key personnel, including certain named executive officers, during
the
implementation of the restructuring plan announced by the Company on March
16,
2006 and to reward those officers for achieving various degrees of success
in
the plan.
How
is Mr. Woodhouse’s compensation determined?
The
compensation of Mr. Woodhouse, our Chairman and CEO, generally is determined
by
the same method used with respect to our other executive officers. In mid 2005,
however, the Compensation Committee determined that it wanted both to reward
as
well as to obligate Mr. Woodhouse with a new employment agreement, the terms
of
which are described in the “Executive Compensation” section of this Proxy
Statement. The Compensation Committee considered the advice of its independent
compensation consultant in proposing the terms of Mr. Woodhouse’s agreement as
well as reviewing the terms of the agreements of other similarly situated
executives. The employment agreement was negotiated by the Compensation
Committee with the assistance of independent outside counsel.
How
are the limitations on deductibility of compensation
handled?
Section
162(m) of the Internal Revenue Code (the “Code”) limits the deductibility of
executive compensation paid by publicly held corporations to $1 million per
employee, unless certain requirements are met. The Compensation
Committee’s policy with respect to the tax deductibility of executive
compensation under Section 162(m) of the Code is to qualify such compensation
for deductibility whenever practicable. The Omnibus Plan was approved by
the Company’s shareholders pursuant to the requirements of Section 162(m) of the
Code so that certain awards earned under that plan will qualify for tax
deduction by the Company when paid. The annual incentive awards and the
long-term incentive program described above are established under the Omnibus
Plan so that amounts paid or distributed thereunder generally are deductible.
If, however, the Compensation Committee determines that the shareholders’
interests are best served by the implementation of compensation policies that
are not deductible
26
Does
the Company have a Stock Ownership Program for executives?
Yes.
The Compensation Committee believes that nothing aligns the interests of
executives with those of shareholders more than those executives owning
substantial amounts of the Company’s stock. The Company maintains stock
ownership guidelines for its executive officers and other executives (“Ownership
Guidelines”). The Ownership Guidelines (posted on the Company’s website at
cbrlgroup.com) set forth certain share ownership requirements that the Company’s
executives are expected to attain over a five-year period.
The
Compensation Committee, pursuant to the Omnibus Plan, established a plan (the
“Ownership Incentive Plan”) to give incentives to executives to achieve
specified progress toward the stock ownership levels under the Ownership
Guidelines. Under the Ownership Incentive Plan, an executive will be awarded
common stock in the amount of the greater of 100 shares or two percent (2%)
of
the number of shares specified in the Ownership Guidelines for such executive
if
the executive achieves certain specified progress each year during the five-year
period toward the Ownership Guidelines. In future years, failure to achieve
specified ongoing progress toward share ownership requirements would result
in
reduced stock option grants under the long-term incentive program. During 2006,
the Compensation Committee determined that certain of the named executive
officers had achieved the specified progress and, accordingly, were awarded
shares under the Ownership Incentive Plan that are shown in the “All Other
Compensation” column of the Summary Compensation Table.
Do
you anticipate any major changes in 2007 in the way compensation is
established?
No.
Although we receive regular advice from our independent consultants and counsel
regarding trends in executive compensation, we currently expect the structure
of
the compensation for the Company’s executives in 2007 to be substantially
similar to that in 2006.
Who
has furnished this report?
This
report on executive compensation has been furnished by the members of the
Compensation and Stock Option Committee:
| · |
Robert
V. Dale, Chair
|
| · |
James
D. Carreker
|
| · |
Charles
E. Jones
|
| · |
Andrea
M. Weiss
|
27
SECTION
16(a) BENEFICIAL OWNERSHIP REPORTING
COMPLIANCE
The
United States securities laws require our executive officers, directors, and
10%
shareholders to file reports of ownership and changes in ownership on Forms
3, 4
and 5 with the SEC and with us. Based solely upon a review of Forms 3, 4 and
5
and amendments thereto furnished to us during and with respect to 2006 and
written representations by our directors, executive officers and 10%
shareholders, each of such persons filed, on a timely basis, the reports
required by Section 16(a) of the Exchange Act with respect to 2006.
28
AUDIT
COMMITTEE REPORT
What
is the Audit Committee and what does it do?
The
Audit
Committee of the Board is responsible for providing independent, objective
oversight and review of CBRL’s accounting functions and internal controls. The
committee recommends to the Board that our audited financial statements be
included in our annual report.
Are
the members of the committee “independent”?
This
committee is comprised of four directors, all of whom are independent as
determined in accordance with Nasdaq’s listing standards and our Corporate
Governance Guidelines.
Is
a member of the committee an “audit committee financial
expert”?
The
Board
has determined that each of the members of the audit committee satisfy the
attributes of an audit committee financial expert, as defined by SEC
regulations.
Has
the committee adopted a Charter?
On
May
25, 2000, the Board of Directors adopted an Audit Committee Charter to govern
this committee, and, on September 25, 2003, the Board of Directors approved
amendments to that Charter to update it with respect to currently applicable
laws and rules. A copy of that amended Charter is included as Appendix A to
this
Proxy Statement and also is posted on CBRL’s Internet website at cbrlgroup.com.
What
steps did the committee take in recommending that our audited financial
statements be included in our annual report?
In
connection with recommending that our audited financial statements be included
in our annual report, this committee took the following steps:
| · |
Discussed
with our independent registered public accounting firm their judgment
as
to the quality, not just the acceptability, of our accounting policies
and
principles and such other matters as are required to be discussed
under
generally accepted auditing standards, including information concerning
the scope and result of the audit. These communications and discussions
are intended to assist this committee in overseeing the financial
reporting and disclosure process.
|
| · |
Discussed
with our independent registered public accounting firm its independence
and received written disclosures from our independent registered
public
accounting
|
29
|
firm
regarding independence as required under applicable independence
standards
for independent registered public accounting firms of public companies.
In
addition, this committee considered the compatibility of certain
non-audit
services with the independent registered public accounting firm’s
independence. This discussion and disclosure informed this committee
of
the independent registered public accounting firm’s independence, and
assisted this committee in evaluating that
independence.
|
| · |
Reviewed
and discussed, with our management and independent registered public
accounting firm, our audited consolidated balance sheets as of July
28,
2006 and July 29, 2005 and the related consolidated statements of
operations, shareholders’ equity and cash flows for each of the years in
the three-year period ended July 28, 2006, including associated footnotes
and Management’s Discussion and Analysis of Financial Condition and
Results of Operations.
|
| · |
Reviewed
and pre-approved all permissible non-audit services currently planned
for
2007 by our independent registered public accounting
firm.
|
| · |
Reviewed
and discussed CEO and CFO Certifications concerning the Company’s Form
10-K.
|
Based
on
the discussions with our independent registered public accounting firm
concerning the audit, the independence discussions, the financial statement
quarterly review, and additional matters deemed relevant and appropriate by
this
committee, including internal audit activities, this committee authorized these
audited financial statements to be included in our Annual Report on Form 10-K.
What
is the Audit Committee’s pre-approval policy and procedure with respect to audit
and non-audit services provided by our auditors?
In
order
to ensure that our independent registered public accounting firm is engaged
only
to provide audit and non-audit services that are compatible with maintaining
independence as defined by applicable laws and regulations, the Audit Committee
requires that all services provided and fees charged by the independent
registered public accounting firm be pre-approved by the Audit Committee. The
authority to grant any pre-approval sought by the Audit Committee during the
time period between regularly scheduled Audit Committee meetings is delegated
to
the Chair of the Audit Committee. All of the services described below under
the
caption “Fees Paid to Auditors” that required pre-approval were pre-approved by
the Audit Committee.
Who
has furnished this report?
This
report has been furnished by the members of the Audit Committee:
| · |
Robert
C. Hilton, Chair
|
| · |
Robert
V. Dale
|
| · |
Richard
J. Dobkin
|
| · |
Jimmie
D. White
|
30
CERTAIN
TRANSACTIONS
Except
as
disclosed under “Executive Compensation,” and except as set forth below, our
executive officers, directors and director nominees did not have significant
business relationships with us which would require disclosure under applicable
SEC regulations and no other transactions requiring such disclosure are
anticipated during 2007.
Through
a
subsidiary, we lease a restaurant property in Macon, Georgia from a limited
partnership controlled by B. F. “Jack” Lowery, one of our directors. The annual
rent is the greater of (i) 12% of the total initial cost of the land, buildings
and improvements, or (ii) 5% of the total restaurant sales plus 3% of retail
sales. The lease, which was originally entered into in 1981, expires on June
1,
2011 with one 10-year option remaining. During 2006, our subsidiary paid
$191,205 in
rent
to the limited partnership.
We
negotiated this transaction on an arms-length basis, and it was reviewed and
approved by the Audit Committee. We believe that the transaction is fair and
reasonable and that its terms are no less favorable than could be obtained
from
unaffiliated persons.
31
SHAREHOLDER
RETURN
PERFORMANCE
GRAPH
This
graph compares the cumulative percentage change in the return on the shares
of
our common stock (assuming reinvestment of dividends) each year for the last
five fiscal years with the Standard & Poor’s 400 MidCap Index and a Total
Return Index comprised of all companies listed with Nasdaq with the same
two-digit SIC (Standard Industrial Classification) code (58-Eating and Drinking
Places) as CBRL. The data set forth in the chart below has been provided by
Nasdaq.
|
2001
|
2002
|
2003
|
2004
|
2005
|
2006
|
|
|
CBRL
|
100
|
138
|
184
|
173
|
205
|
169
|
|
NASDAQ
(SIC Code 58)
|
100
|
115
|
146
|
204
|
241
|
248
|
|
S&P
400 MidCap
|
100
|
82
|
96
|
113
|
141
|
145
|
32
STOCK
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND
MANAGEMENT
Security
Ownership of Certain Beneficial Owners
The
following table shows information for those who, as of October 16, 2006, were
known by us to beneficially own more than 5% of our common stock. Percentage
computations are based on 30,976,505 shares of our common stock outstanding
as
of September 29, 2006.
|
Name
and Address of Beneficial Owner
|
Amount
and
Nature
of
Beneficial
Ownership
|
Percent
of Class
|
|
Barclays
Global Investors, NA
45
Fremont Street
San
Francisco, CA 94105
|
5,169,379(1)
|
16.7%
|
|
Wellington
Management Company, LLP
75
State Street
Boston,
MA 02109
|
2,168,636(2)
|
7.0%
|
__________________________
(1) Based
solely on the Schedule 13G filed for the period ending December 31, 2005 by
Barclays Global Investors, NA and what appear to be a number of its
affiliates. Item 4 of the Schedule 13 reports total beneficial ownership of
5,169,379 shares, with sole voting power over 4,490,058 shares and sole
investment
power over 5,169,379 shares. Item 6 of the Schedule 13 reports that the shares
are held in trust accounts for the economic benefit of the beneficiaries of
those accounts.
(2) Based
solely on the Schedule 13G/A filed for the period ending December 30, 2005
by
Wellington Management Company, LLP. Item 4 of the Schedule
13G/A reports total beneficial ownership of 2,168,636 shares, with shared voting
power over 1,903,536 shares and shared investment power over 2,168,636
shares. Item 6 of the Schedule 13G/A reports that the shares are owned of record
by clients of Wellington Management Company, LLP as investment
adviser. These clients have the right to receive, or the power to direct the
receipt of, dividends from, or the proceeds from the sale of, such securities.
33
Security
Ownership of Management
The
following table shows how much of our common stock is owned, as of September
29,
2006, by all directors and named executive officers, and by all current
directors and executive officers as a group. Unless otherwise noted, these
persons may be contacted at our executive offices, and they have sole voting
and
investment power with respect to the shares indicated.
|
Name
of Beneficial Owner
|
Shares
Beneficially Owned(1)
|
Percent
of Class
|
|
Michael
A.
Woodhouse........................................................................................................................................821,777
|
2.6%
|
|
|
Lawrence
E.
White..............................................................................................................................................114,514
|
*
|
|
|
N.B.
Forrest
Shoaf..................................................................................................................................................7,295
|
*
|
|
|
Cyril
J.
Taylor(2)....................................................................................................................................................81,231
|
*
|
|
|
G.
Thomas
Vogel..................................................................................................................................................16,513
|
*
|
|
|
David
L.
Gilbert(3).................................................................................................................................................71,363
|
*
|
|
|
James
D.
Carreker................................................................................................................................................10,334
|
*
|
|
|
Robert
V.
Dale......................................................................................................................................................79,750
|
*
|
|
|
Richard
J.
Dobkin......................................................................................................................................................334
|
*
|
|
|
Robert
C.
Hilton...................................................................................................................................................111,333
|
*
|
|
|
Charles
E. Jones,
Jr...............................................................................................................................................87,783
|
*
|
|
|
B.
F. “Jack”
Lowery............................................................................................................................................149,283
|
*
|
|
|
Martha
M.
Mitchell................................................................................................................................................50,920
|
*
|
|
|
Erik
Vonk..................................................................................................................................................................334
|
*
|
|
|
Andrea
M.
Weiss....................................................................................................................................................5,334
|
*
|
|
|
Jimmie
D.
White....................................................................................................................................................22,737
|
*
|
|
|
All
executive officers and directors
as
a group (20
persons)......................................................................................................................................1,652,196
|
5.1%
|
|
__________________________
*Less
than one percent.
(1) Includes
the following number of restricted shares and shares subject to options
exercisable by the named holders within 60 days:
|
Mr.
Woodhouse.................................................................................732,263
|
Mr.
Dobkin..............................................................................................334
|
|
|
Mr.
White.........................................................................................102,705
|
Mr.
Hilton..........................................................................................102,380
|
|
|
Mr.
Shoaf.............................................................................................7,222
|
Mr.
Jones............................................................................................77,068
|
|
|
Mr.
Taylor..........................................................................................80,224
|
Mr.
Lowery.......................................................................................133,004
|
|
|
Mr.
Vogel...........................................................................................14,528
|
Ms.
Mitchell........................................................................................49,756
|
|
|
Mr.
Gilbert..........................................................................................66,663
|
Mr.
Vonk................................................................................................334
|
|
|
Mr.
Carreker........................................................................................8,667
|
Ms.
Weiss.............................................................................................5,334
|
|
|
Mr.
Dale.............................................................................................77,068
|
Mr.
White...........................................................................................10,334
|
|
|
All
executive officers and directors
as
a group (20
persons)....................................................................1,489,041
|
The
shares described in this note are considered outstanding for the purpose of
computing the percentage of outstanding CBRL common stock owned by each
named
individual and by the group. They are not considered outstanding for the purpose
of computing the percentage ownership of any other person.
(2) Mr.
Taylor’s employment with the Company ended on July 28, 2006, and his share
ownership reported in this table is accurate only as of that date.
(3) Mr.
Gilbert’s employment with the Company ended on July 15, 2006, and his share
ownership reported in this table is accurate only as of that date.
34
PROPOSAL
2:
APPROVAL
OF APPOINTMENT OF INDEPENDENT
REGISTERED
PUBLIC ACCOUNTING FIRM
Who
has the Audit Committee retained as our independent registered public accounting
firm?
The
Audit
Committee has retained Deloitte & Touche LLP as our independent registered
public accounting firm for 2007.
How
long has Deloitte & Touche LLP served as our independent registered public
accounting firm?
Deloitte
& Touche LLP has served as our independent registered public accounting firm
since 1972.
Will
representatives of Deloitte & Touche LLP attend the Annual
Meeting?
Representatives
of Deloitte & Touche LLP have been requested to attend the Annual Meeting.
These representatives will have the opportunity to make a statement if they
so
desire and are expected to be available to respond to appropriate
questions.
What
happens if shareholders fail to approve the appointment of Deloitte & Touche
LLP as our independent registered public accounting firm?
If
shareholders fail to approve the appointment of Deloitte & Touche LLP, the
Audit Committee will reconsider the appointment but in its discretion may still
direct the appointment of Deloitte & Touche LLP. Also, if the appointment of
Deloitte & Touche LLP is approved, the Audit Committee in its discretion may
still direct the appointment of a different independent registered public
accounting firm at any time and without shareholder approval if the Audit
Committee believes that such a change would be in our best interest and the
best
interest of our shareholders.
What
does the Board of Directors recommend?
Our
Board
recommends that you vote FOR
the
appointment of Deloitte & Touche LLP as our independent registered public
accounting firm for the 2007 fiscal year.
35
FEES
PAID TO AUDITORS
What
fees have been paid to the independent registered public accounting firm during
the last two years?
The
following table sets forth certain fees billed to CBRL by Deloitte & Touche
LLP in connection with various services provided to us throughout fiscal year
2006 and fiscal year 2005.
|
Service
|
Aggregate
Fees
Billed
for FY 2006 ($)
|
Aggregate
Fees
Billed
for FY 2005 ($)
|
|||||
|
Audit
Fees(1)
|
$
|
1,218,816
|
$
|
1,156,169
|
|||
|
Audit-Related
Fees(2)
|
1,079,006
|
31,051
|
|||||
|
Tax
Fees(3)
|
711,085
|
1,014,265
|
|||||
|
All
Other Fees(4)
|
3,000
|
3,000
|
|||||
|
Total
Fees
|
$
|
3,011,907
|
$
|
2,204,485
|
|||
(1) Represents
aggregate fees for professional services rendered for: the audit of our
consolidated financial statements contained in our Annual Reports on Form
10-K
for 2006 ($722,630) and 2005 ($370,012); reviews of our consolidated financial
statements contained in our Quarterly Reports on Form 10-Q for the first
three
quarters of 2006 ($121,328) and 2005 ($75,575); attestation report on
management’s assessment of internal control over financial reporting as required
by
the Sarbanes-Oxley Act of 2002, Section 404 for 2006 ($374,858) and 2005
($593,782); review of our internal control documentation for our assessment
of
internal
control as required by the Sarbanes-Oxley Act of 2002, Section 404 during 2005
($41,013); the issuance of consents during 2005 ($4,500); and review
of
documents filed with the SEC during 2005 ($71,287).
(2) Represents
aggregate fees for professional services rendered for: the stand-alone audit
of
the Company’s wholly-owned subsidiary, Logan’s Roadhouse, Inc.
for
fiscal years 2003-2005 conducted during for 2006 ($1,079,006); the audit of
the
Company’s retirement savings plan for 2005 ($18,033); permitted
Sarbanes-
Oxley Act of 2002, Section 404 advisory services during 2005 ($9,839); and
permitted financial accounting and reporting consultations during the fiscal
year
ended 2005 ($3,179).
(3) Represents
aggregate fees for tax services rendered for tax authority examination support,
consulting and compliance for 2006 ($125,713, $96,666, and
$488,706,
respectively) and 2005 ($146,531, $427,300, and $440,434,
respectively).
(4) Represents
aggregate expenses for licenses to access financial accounting technical
database.
36
SHAREHOLDER
PROPOSALS FOR 2007 ANNUAL MEETING
To
be
considered for inclusion in our proxy materials relating to the 2007 Annual
Meeting of Shareholders, proposals must be submitted by eligible shareholders
who have complied with the relevant regulations of the SEC and must be received
no later than June 29, 2007. In addition, if we are not notified of a
shareholder proposal by September 12, 2007, then the proxies held by our
management may provide the discretion to vote against such shareholder proposal,
even though the proposal is not discussed in our proxy materials sent in
connection with the 2007 Annual Meeting of Shareholders. Shareholder proposals
should be mailed to Corporate Secretary, CBRL Group, Inc., P. O. Box 787,
Lebanon, Tennessee 37088-0787.
SHAREHOLDER
COMMUNICATIONS
Our
Board
provides a process for shareholders to send communications to the Board. All
correspondence addressed to the Board of Directors or to one or more members
of
the Board of Directors should be sent to: CBRL Group, Inc., c/o Corporate
Secretary, P. O. Box 787, Lebanon, TN, 37088-0787, or e-mail at
forrest.shoaf@cbrlgroup.com, or via fax at (615) 443-9818, or website
communication on the Investor Relations section of our website located at
cbrlgroup.com.
All
correspondence received by the Corporate Secretary will be promptly acknowledged
and reviewed by the Corporate Secretary, who will determine whether the
correspondence should be forwarded immediately to the Board of Directors or
any
member of the Board of Directors or whether the correspondence should be
presented to the Board of Directors at its next regular meeting. The Corporate
Secretary will consult with the chair of the Nominating and Corporate Governance
Committee if there is a question concerning the need for immediate review by
the
Board of Directors or by any member of the Board of Directors.
ANNUAL
REPORT AND FINANCIAL INFORMATION
A
copy of
our Annual Report to Shareholders for fiscal year 2005 is being mailed to each
shareholder with this Proxy Statement. A
copy of our Annual Report on Form 10-K, and a list of all its exhibits, will
be
supplied without charge to any shareholder upon written request sent to our
principal executive offices: CBRL Group, Inc., Attention: Investor Relations,
P.
O. Box 787, Lebanon, Tennessee 37088-0787. Exhibits to the Form 10-K are
available for a reasonable fee.
You may
also view our Annual Report on Form 10-K and its exhibits on-line at the SEC
website at sec.gov, or via our website at cbrlgroup.com.
37
OTHER
BUSINESS
Our
management is not aware of any other matters to be brought before the Annual
Meeting. If, however, any other matters are properly brought before the Annual
Meeting, the persons named in the enclosed form of proxy will have discretionary
authority to vote all proxies with respect to those matters in accordance with
their best judgment.
38
Appendix
A
Audit
Committee
Charter
CBRL
GROUP, INC.
AUDIT
COMMITTEE CHARTER
1. BACKGROUND.
Pursuant
to Section 48-18-206 of the Tennessee Business Corporation Act, and subject
to
the specific provisions of the corporation’s Bylaws, the Board of Directors (the
“Board”) of CBRL Group, Inc. (the “Company”) may create one or more committees
and each committee may consist of one or more members. All members of committees
of the Board of Directors which exercise the powers of the Board must be members
of the Board, and they serve at the pleasure of the Board of
Directors.
2. ORGANIZATION.
There
shall be a committee of the Board known as the Audit Committee. The Audit
Committee shall consist of not less than 3 directors all of whom are
“independent.” In order to be considered independent, a member of the Audit
Committee may not accept any consulting, advisory, or other compensatory fee
from the Company, may not be affiliated with the Company or any subsidiary,
and
must meet the “independence” definition set forth by the stock exchange on which
the Company’s stock is traded. All members of the Audit Committee shall be able
to read and understand fundamental financial statements at the time of their
appointment, and at least one member of the Audit Committee shall possess
accounting or related financial management experience or professional expertise
and shall be designated the “audit committee financial expert,” in accordance
with Securities and Exchange Commission (“SEC”) regulations. The Board shall
appoint the Audit Committee members and its Chairperson, on recommendation
of
the Nominating and Corporate Governance Committee, and the Board shall review
the appointments annually. The Audit Committee shall operate in accordance
with
the Bylaws of the Company.
3. PURPOSE.
3.01 Oversight
and Liaison. The
Audit
Committee shall engage in oversight of the Company’s financial reporting and
internal controls. The Audit Committee acts as the Board’s liaison with the
Company’s outside auditors in
order
to assist Board oversight of: (a) the integrity of the Company’s financial
statements, (b) the Company’s compliance with legal and regulatory requirements,
(c) the qualifications, independence, and performance of independent
accountants, and (d) the performance and direction of the Company’s internal
audit function. In discharging its responsibilities, the Audit Committee shall
have direct access to the Company’s financial, legal and other advisors and
staff. The Audit Committee shall also maintain open communications among the
Board, the Company’s independent and internal auditors, and Company management.
A-1
3.02 Limited
Scope.
This
Charter is not intended to, and it does not, impose on the Audit Committee
any
duties other than those required by applicable law and regulations and
applicable stock exchange rules. Absent such specific rules, it is not the
Audit
Committee’s role or duty to conduct audits, or to otherwise act in the role of
independent auditors.
4. POWERS.
The
Audit
Committee has the authority to gather any information appropriate in fulfilling
its responsibilities, and it has direct access to the independent auditors
as
well as all Company personnel. The Audit Committee is responsible for the
appointment, retention, compensation, evaluation and termination of the
Company’s independent auditors. The Audit Committee also has the power and
authority to engage, as the Audit Committee considers necessary in the
performance of its duties, and at the Company’s expense, legal counsel or other
consultants, experts or advisors to assist the Committee and to conduct
independent investigations.
5. MEETINGS.
The
Audit
Committee shall meet at least 5 times annually, or more frequently when
appropriate or necessary. The Committee Chairperson shall prepare or approve
an
agenda in advance of each meeting. The Audit Committee will also periodically
meet separately with management, with internal auditors and with independent
auditors. In addition, the Audit Committee should communicate with management
and the independent auditors quarterly to discuss the Company’ s financial
statements and any significant findings based upon the auditors’ limited review
procedures.
6. AUDIT
COMMITTEE RESPONSIBILITIES AND DUTIES.
When
appropriate, the Audit Committee will, without limitation to the listed matters,
engage in the following activities:
a.
Review
Procedures.
(1) Submit
the Charter to the Board of Directors for approval, and review and reassess
the
adequacy of this Charter at least annually. Include the Charter as an appendix
to the Company’s proxy statement at least every 3 years, in accordance with
applicable SEC rules.
(2) Review
the Company’s annual audited financial statements and discuss with management
and the independent auditors all significant issues regarding accounting
principles, practices and judgments, prior to filing or distribution of those
statements. Specifically, review the results of each audit, including the
independent auditors’ opinion, any related management letter, management’s
responses to recommendations made by the independent auditors in connection
with
the audit, reports submitted to the Committee by the internal audit department
that are material to the Company as a whole, and management’s responses to the
those reports. Recommend to the Board of Directors whether or not the audited
financial statements should be included in the Company’s annual report on Form
10-K.
A-2
(3) Require
the independent auditors to perform timely reviews of the Company’s quarterly
financial results prior to the release of earnings, and discuss the Company’s
annual and quarterly financial statements with management and the independent
auditors prior to filing or distribution.
(4) Consider
the independent auditors’ judgments about the quality and appropriateness of the
Company’s accounting principles as applied in its financial reporting, and
discuss any significant changes to the Company’s accounting principles and any
items required to be communicated by the independent auditors in accordance
with
Statement on Auditing Standards No. 61.
(5) Review,
through the independent auditors, periodic filings with the SEC; specifically,
review Management’s Discussion and Analysis before publication in the annual and
quarterly reports, and review the Statement of Management’s Responsibility for
Financial Statements, and the required CEO and CFO certifications, as signed
by
senior management and included in any published document.
b.
Independent
Auditors.
(1) The
independent auditors are ultimately accountable to the Audit Committee and
the
Board of Directors. The Audit Committee, or a designated member of the Audit
Committee, shall pre-approve all auditing services and non-audit services as
set
forth in the Securities Exchange Act of 1934. The Audit Committee shall insure
that the independent auditors provide only services that are permitted by
applicable law, regulations or the rules of the stock exchange that lists the
Company’s capital stock. The Audit Committee shall review and approve the terms
of engagement and the fees and other significant compensation to be paid to
the
independent auditors. The Audit Committee shall also review the independence
and
performance of the auditors and annually approve the appointment of the
independent auditors, or approve any discharge of auditors.
(2) On
an
annual basis, the Audit Committee should review and discuss with the independent
auditors the written independence disclosures required by Independence Standards
Board Statement No. 1 and the auditors’ independence, including all significant
relationships they have with the Company that could impair their independence.
(3) Meet
with
the independent auditors and financial management of the Company during the
planning of each annual audit to review the audit plan and to discuss the scope
of the audit, staffing, locations, reliance upon management, and the internal
and general audit procedures to be used, and accounting principles and practices
to be followed when preparing the Company’s financial statements.
(4) Periodically,
or when necessary or appropriate, meet with the internal and independent
auditors without members of management present. Among the items to be discussed
in these meetings are the independent auditors’ evaluation of the Company’s
financial, accounting, and auditing personnel, and the cooperation that the
independent auditors received during the course of the audit.
A-3
(5) In
consultation with the Company’s independent auditors and the senior internal
audit executive, review and consider the adequacy and effectiveness of the
Company’s internal accounting and financial controls in order to ensure that
these controls are designed to provide reasonable assurance that the Company’s
publicly reported financial statements are presented fairly and in conformity
with generally accepted accounting principles. Particular emphasis should be
given to the adequacy of internal controls to expose any payments, transactions,
or procedures that might be deemed illegal or otherwise improper.
(6) Review
with the independent auditor any audit problems or difficulties with
management’s response to those problems or difficulties.
(7) Ensure
that Company hiring policies with respect to employees or former employees
(or
their relatives) of the independent auditors comply with applicable rules
designed to avoid conflicts of interest.
c.
Internal
Audit and Legal Compliance.
(1) Review
the appointment, performance and termination or replacement of the Company’s
senior internal audit executive.
(2) Review
the internal audit function of the Company, including the independence and
authority of its participants and their reporting obligations, the proposed
internal audit plans for the coming year, and the coordination of those plans
with the external audit.
(3) Receive,
at least annually, a summary of findings from completed internal audits and
an
internal audit progress report, with explanations for any deviations from the
original plan, and review significant reports prepared by the internal audit
department, together with management’s responses and follow-up to the reports.
(4) Whenever
appropriate, at least annually, review with the Company’s legal counsel any
inquiries received from regulators or governmental agencies and any legal
matters or proceedings that could have a significant impact on the Company’s
financial statements or its compliance with applicable laws and regulations.
d.
Other
Duties.
(1) Report
annually through the Board to the shareholders, in the Company’s annual proxy
statement, the existence of the Audit Committee, the responsibilities assigned
to it by the Board, the independence of its members and the manner in which
the
Committee has fulfilled its duties, as required by the SEC.
(2) Review
and pre-approve directors’ and officers’ related-party transactions, and
annually review a summary of directors’ and officers’ related- party
transactions and potential conflicts of interest, and review policies and
procedures, as well as any specific audit results, associated with directors’
and officers’ expense accounts and perquisites.
(3) Review
the procedures established to monitor compliance by the Company with any loan
and indenture covenants and restrictions.
A-4
(4) Maintain
minutes of meetings and periodically report to the Board of Directors on
significant Audit Committee activities.
(5) Establish
procedures for the receipt, retention, and treatment of complaints received
by
the Company regarding accounting, internal accounting controls, or auditing
matters, and establish procedures for confidential, anonymous submission by
employees of the Company of concerns regarding questionable accounting or
auditing matters.
(6) Review
earnings press releases before such information is released.
(7) Review
policies with respect to risk assessment and risk management.
(8) Report
regularly to the Board of Directors.
7. EFFECTIVE
DATE AND CHARTER AMENDMENTS.
This
Charter is effective as of the date it is adopted by the Board, and it will
remain in effect until modified, superseded or cancelled by appropriate Board
action. This Charter may be amended at any time by the Board in accordance
with
the Charter and Bylaws of the Company and applicable law.
Effective
Date: September 25, 2003
A-5
Appendix
B
Form
of Proxy
Card
[CBRL
GROUP, INC. LOGO] [SCAN
SHEET BAR
CODE]
000004
Least
Address Line
| MR A. SAMPLE |
000000000.000
ext
|
| DESIGNATION (IF ANY) |
000000000.000
ext
|
| ADD 1 |
000000000.000
ext
|
| ADD 2 |
000000000.000
ext
|
| ADD 3 |
000000000.000
ext
|
| ADD 4 |
000000000.000 ext
|
| ADD 5 |
000000000.000
ext
|
| ADD 6 |
[SCAN
SHEET BAR
CODE]
[SCAN SHEET BAR CODE]
[
] Mark
this box with
an X if you have made changes to your name or
address
details above.
Annual
Meeting Proxy Card
PLEASE REFER TO THE REVERSE SIDE FOR TELEPHONE AND INTERNET VOTING
INSTRUCTIONS.
A. Election of
Directors
The Board of Directors recommends a vote "FOR" the listed nominees.
1. TO ELECT DIRECTORS:
01 - James D. Carreker, 02 - Robert V. Dale, - 03 - Richard J. Dobkin,
04 -
Robert C. Hilton,
05 - Charles E. Jones, Jr., 06 - B.F. "Jack" Lowery, 07 - Martha M.
Mitchell, 08 - Erik Vonk,
09 - Andrea M. Weiss, 10 - Jimmie D. White, 11 - Michael A. Woodhouse
| [ ] To Vote FOR All Nominees [ ] To WITHOLD Vote From All Nominees | 01 - [ ] 02 - [ ] 03 - [ ] 04 - [ ] |
| [ ] For All Except - To withhold a vote for a specific nominee, mark this box with an X and | 05 - [ ] 06 - [ ] 07 - [ ] 08 - [ ] |
| the appropriately numbered box to the right from the list above. | |
| 09 - [ ] 10 - [ ] 11 - [ ] |
B. Issues
The Board of Directors recommends a vote "FOR" the following
proposal.
For Against Abstain
2. TO APPROVE
THE SELECTION OF DELOITTE
&
[
] [
]
[ ] 3. IN
THEIR DISCRETION, TO TRANSACT
TOUCHE LLP AS THE COMPANY'S
INDEPENDENT ALL
OTHER BUSINESS, INCLUDING A
REGISTERED PUBLIC ACCOUNTING
FIRM
FOR VOTE
TO ADJOURN THE MEETING,
FISCAL YEAR
2007.
THAT IS PROPERLY BROUGHT BEFORE
THE
MEETING OR ANY
ADJOURNMENT
OF THE MEETING.
C. Authorized
Signatures
- Sign Here - This section must be completed for your instructions to be
executed.
Please sign exactly as your name appears at left. If registered in
the name of two or more persons, each should sign. Executors,
administrators, trustees, guardians, attorneys and corporate officers should
show their full titles.
Date (mm/dd/yyyy) Signature
1 - Please
keep signature within the box Signature
2 - Please
keep signature within the box
[ __ __/__ __/__ __ __ __] [_____________________________________]
[_____________________________________]
Proxy - CBRL GROUP, INC.
Proxy Solicited by and on behalf of the Board of Directors for
the
Annual Meeting of Shareholders to be held on Tuesday, November
28,
2006.
The
undersigned hereby appoints Michael A. Woodhouse and
N.B.
Forrest
Shoaf, and each of
them,
as
proxies, with full power of substitution, to
vole
all
shares of the
undersigned as
snown
below on this proxy at
the
Annual Meeting
of
Shareholders
of
CBRL
Group, Inc. to be held at the Company’s offices located
at
305
Hartmann Drive, Lebanon, Tennessee,
on Tuesday,
November 28, 2006,
at
10:00
am., Central Time, and at any adjoumments of that meeting.
Your
shares
will
be
voted
in accordance with your instiuctions. If no choIce is specified,
shares
will be voted FOR all nominees in the
election of
directors and
FOR
approval of the selection of Deloitte & Touche LLP as the Company’s
independent registered
public
accounting firm.
PLEASE
SIGN HERE AND
RETURN
PROMPTLY
Telephone
and Internet Voting Instructions
You
can
vote
by
telephone OR
Internet! Available 24 hours
a
day 7
days a week!
Instead
of mailing your
proxy you
may
choose one of the two voting methods outlined
below to vote
your
proxy.
To
vote using the Telephone (within U.S. and Canada) To
vote using
the Internet
·
Call
toll
free
1-800-652-VOTE (8683) in the United States or Canada
any time
on
·
Go
to the
following web site:
a touch
tone telephone, There is
NO
CHARGE to you
for
the
call
WWW.COMPUTERSHARE.COM/EXPRESSVOTE
·
Follow
the simple
instructions provided by the recorded message. ·
Enter the information requested on your computer
screen and follow the simple instructions.
VALIDATION
DETAILS ARE LOCATED ON THE FRONT OF THIS FORM IN
THE COLORED BAR.
If
you vote by telephone of the Internet, please DO NOT mail
back this proxy card.
Proxies
submitted by telephone or the internet must be
received by 1:00 a.m., Central Time, on November 28, 2006.
THANK
YOU FOR
VOTING