Mails Letter to Shareholders Highlighting Proven Record of Value Creation and Right Plan to Deliver Continued Growth
Urges Shareholders to Vote "FOR" Each of Buffalo Wild Wings' Highly-Qualified Director Nominees on the YELLOW Proxy Card
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The Buffalo Wild Wings Board of Directors unanimously recommends that
shareholders vote the YELLOW proxy card "FOR" the election of all nine
of the Board's experienced and highly-qualified director nominees:
In connection with the filing of the proxy statement, the Buffalo Wild Wings Board mailed the following letter to shareholders:
VOTE THE ENCLOSED YELLOW PROXY CARD TODAY
"FOR" ALL OF BUFFALO WILD WINGS' HIGHLY-QUALIFIED DIRECTOR NOMINEES
Dear Fellow Shareholder:
We are writing to encourage you to elect our highly-qualified directors
at the upcoming
Please use the enclosed YELLOW proxy card to vote "FOR"
each of Buffalo Wild Wings' nine nominees:
This year's Annual Meeting is a particularly important one. After
generating industry-leading total shareholder returns for our
shareholders since our IPO in 2003 - indeed,
We have made considerable efforts to resolve this unnecessary proxy contest, but Marcato has rejected every one of our proposals. We believe that Marcato's plans for the business - involving a massive refranchising of our company-owned stores, among other things - will not create sustainable shareholder value but will create substantial risk.
BUFFALO WILD WINGS HAS DELIVERED FOR SHAREHOLDERS1
Our record of outstanding performance is compelling. If you invested with us at our IPO, ten years ago, five years ago, three years ago or even just a year ago, you have earned a return that exceeds the median return generated by other casual dining restaurant companies.1
We have also outperformed those peers, on average, in key operating and financial metrics such as same store sales, restaurant level margins, returns on invested capital and growth of earnings per share, among other things, over most time periods.3 Our earnings per share have grown at a compounded annual rate of more than 18% over the last ten years. Returns on the capital we have deployed in the business exceed the returns generated by our peers on their capital and far exceed our cost of capital.
And we are not sitting still.
We recognize that the casual dining sector in
To help us do this, we have made some significant changes to our
leadership team, strategy and Board of Directors. We added three
extraordinary individuals to our Board of Directors in October, 2016 -
We therefore enthusiastically nominated him ourselves.
Ms. Fields' qualifications speak for themselves. She served as the
President of McDonald's USA, LLC and she is simply one of the best chain
restaurant operators in
These five new directors bring important and relevant experience and further diversity to our Board as we face the industry's challenges; they are energetic and proven leaders from the restaurant, food service, technology, retailing and consumer sectors.
We are also asking you to re-elect four members of the Board who have
tenure and who bring critical insights into our future based on their
history with the company. In addition to helping steer the company
through a very successful period, all of these board members have
exceptional careers in restaurants, food service, retailing and
financial services. Included in this group is
Our proposed Board - which, if elected, will be one of the
shortest-tenured Boards in the casual dining sector at an average of
just 3.8 years of service - brings fresh perspectives, financial acumen
and great enthusiasm for our business and all our shareholders. We will
This past year, we have also named a new Chairman of the Board and rotated the Chairs of each of our committees. We have re-examined our executive compensation programs - which have always received strong shareholder support - to focus them even more tightly on metrics that we believe will be critical to the business going forward. And, four of our longer-serving directors have retired or will retire as of the upcoming Annual Meeting to provide Board seats to new directors that bring us fresh perspective.
Our strategy is focused on driving sales and profitability through our innovative approach to the global casual dining market. We are focused on extending our unique offerings - elevating the social, entertainment and sports aspects of dining - to population-dense urban locations with smaller footprint restaurants and expanding our takeout and delivery business. In addition, we are implementing exciting in-restaurant technologies and programs that enhance every fan's sports-watching experience throughout the day, including take-out options for fans hosting parties at home. We are also focused on profitability initiatives that will drive productivity and improve margins over the longer term. And we are optimizing our mix of owned restaurants and franchised restaurants while we adjust our balance sheet through additional leverage and stock buybacks.
WE BELIEVE MARCATO HAS NO CREDIBLE PLAN
Despite the extraordinary record of performance at
Why would you do that?
Marcato has provided no credible plan for sustainable growth in shareholder value. Removing all of our longer-serving directors will leave the Board bereft of institutional knowledge, to say nothing of the gaps in our experience base it would create.
Our management team and Board have invested significant effort in engaging with Marcato. Our Board has evaluated and debated all of Marcato's suggestions openly and objectively, with the advice of an independent financial advisor. Some of Marcato's ideas had merit (many of which we had been considering ourselves) and were welcomed. We have implemented or are implementing them. In our view, the remainder of Marcato's suggestions, however, would add substantial risk to our business, with no identifiable, long-term benefit.
Marcato appears primarily focused on having us sell 80% of our company-owned restaurants to franchisees. We have engaged an outside financial advisor to review this plan and believe Marcato's analysis is based on a lack of understanding of our business and unrealistic assumptions. We continuously evaluate the right mix of owned and franchised restaurants and will continue to do so; we recently announced, for example, that we are going to sell approximately 70 restaurants. Marcato's vastly more aggressive and unproven plan, however, simply does not pencil out.
Given our focus on extending our successful long-term track record, we will not support risky financial engineering strategies that provide an unlikely and modest short-term benefit but create substantial long-term risk. We do not believe that is what you want us to do, nor would you be well-served by it.
Instead, we trust that you want us to implement strategies and
programs that are calculated to sustain our exceptional long-term
performance without undue risk. If that is indeed what you desire,
we encourage you to vote "FOR" each of Buffalo Wild Wings' nine
nominees today by telephone, by
We thank you for your continued support.
Chairman of the Board
Harry A. Lawton III
/s/ Harry A. Lawton III
CEO & President and Director
Independent Director (retiring
Independent Director (retiring
If you have any questions or require any assistance with voting your
please contact the company's proxy solicitor listed below:
Lazard Ltd is serving as financial advisor and
About the Company
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Cautionary Statement Regarding Certain Information
This communication contains "forward-looking statements" within the
meaning of the federal securities laws. Such statements include
statements concerning anticipated future events and expectations that
are not historical facts. All statements other than statements of
historical fact are statement that could be deemed forward-looking
statements. Actual results may vary materially from those expressed or
implied by forward-looking statements based on a number of factors,
including the factors described under "Risk Factors" in Part I, Item 1A
of our Annual Report on Form 10-K for the fiscal year ended
Source: Company filings and FactSet. Market data as of
|2||Constituents include BH, BJRI, BOBE, CHUY, PLAY, DIN, LOCO, FRGI, RRGB, RT, RUTH, SHAK, SONC and WING.|
|3||Performance as compared to the mean of the peer group over one, three, five and ten year periods. Peers include BBRG, BRJI, BLMN, CAKE, CBRL, CHUY, DENN, DIN, DRI, EAT, IRGT, RRGB, RT and TXRH. Same store sales figures are as reported. Where consolidated same store sales is not reported (i.e., DIN, DRI, TXRH), the figures used in the analysis reflect the weighted average same store sales by concept (i.e., DIN, DRI) or by ownership type (i.e., TXRH). Domestic same stores sales used for DIN, DENN and BLMN. Restaurant level margins are calculated as restaurant revenues less COGS, labor, occupancy and operating expenses. Restaurant level margins include marketing expenses in all cases except for DRI, prior to FY 2014, and RT, and include any reported one-time adjustments. EPS analysis utilizes adjusted fiscal year EPS, as reported, only for years in which each company was public. Mean EPS CAGR for the peer group excludes IRG due to negative EPS in FY 2016. EBITDA calculated as operating income, less stock-based comp and pre-opening expenses when not accounted for in the reported figure, plus depreciation and amortization. EBITDA is adjusted for impairment and closure expenses and one-time items. ROIC is calculated as after-tax EBIT divided by the average sum of total debt and total shareholders' equity over a given fiscal year. EBIT is calculated as operating income, less stock-based comp and pre-opening expenses when not excluded in the reported figure, and is adjusted for impairment and closure expenses and one-time items.|
NCR's stock price declined approximately 8% during Mr. McGuire's
tenure on its board; Borders Group's stock price declined
approximately 77% during Mr. McGuire's tenure as a director;
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