Highlights Buffalo Wild Wings' Recent Board and Management
Notes Marcato's Board Nominees Have a Poor Track Record of Success
Reiterates Emil Lee Sanders's Clear Conflict of Interest
Urges Shareholders to Vote "FOR" Each of Buffalo Wild Wings'
Highly Qualified Director Nominees on the YELLOW Proxy Card
Buffalo Wild Wings, Inc. (NASDAQ:BWLD) today mailed a letter to its
shareholders in connection with the company's upcoming 2017 Annual
Meeting of Shareholders ("Annual Meeting") to be held on June 2, 2017.
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: Cynthia L. Davis, Andre J. Fernandez, Janice L. Fields, Harry
A. Lawton, J. Oliver Maggard, Jerry R. Rose, Sam B. Rovit, Harmit J.
Singh and Sally J. Smith.
This Smart News Release features multimedia. View the full release here:
(Graphic: Business Wire)
All materials regarding the Board's recommendation can be found at http://www.buffalowildwings.com/en/2017-annual-meeting/.
The full text of the letter follows:
VOTE "FOR" ALL OF BUFFALO WILD WINGS' HIGHLY QUALIFIED DIRECTOR
NOMINEES USING THE YELLOW PROXY CARD
May 22, 2017
Dear Fellow Shareholder:
The Buffalo Wild Wings 2017 Annual Meeting of Shareholders is fast
approaching. At the meeting, shareholders will have a choice of
directors. We encourage you to consider that choice carefully and to
vote for the Board's slate of nominees using the YELLOW proxy
One of our investors, Marcato Capital, L.P. ("Marcato"), wants you to do
something different. They want you to remove every director who has
served on the Board for more than one year. In fact, if you and your
fellow shareholders were to vote for Marcato's nominees, the average
tenure among the independent directors will be just four months.
And yet, Buffalo Wild Wings has been among the best performing casual
dining companies over the last one, three, five and ten years (and since
its 2003 IPO). Why would you want to radically change the Board of such
a successful company?
BUFFALO WILD WINGS HAS BEEN REFRESHING ITS BOARD AND STRENGTHENING
ITS MANAGEMENT TEAM
The Board and company have not been standing still. Despite our
outperformance and success, the Board has added three new independent
directors and nominated two additional new independent nominees to its
slate, together representing more than 50% of the total Board. These
candidates bring fresh and valuable perspective to the company. The
company's nominees have a mix of tenures and experience, ensuring that
the institutional knowledge and history of the company are used to avoid
pitfalls going forward.
The Board has also been changing and strengthening the management team
as part of its ongoing evaluation of the needs of the business. In the
last year, we have appointed a new Chief Financial Officer and,
recognizing a changing customer demographic and the importance of our
technology strategy in furthering our innovation and differentiation, we
also created the role of Chief Information Officer. We have also
restructured our North American management team, removing two layers of
management and improving our responsiveness to market developments.
As a Board, we remain committed to the ongoing evaluation of management
and will continue to make changes as appropriate. One thing we know for
certain is that in order to deliver returns for our shareholders over
the next 14 years that come close to the 24% annual returns we have
generated since our IPO, we will need to continue to innovate, manage
our business effectively and tackle entirely new challenges.
MARCATO'S NOMINEES, OTHER THAN SAM ROVIT, HAVE VERY SERIOUS
WEAKNESSES AND COULD DO LASTING HARM TO BUFFALO WILD WINGS
As you would expect, the Board has been disciplined in its evaluation of
strategy, management, Board composition and capital structure. When
changes are needed, we have carefully evaluated opportunities for
improvement and, based on rigorous analysis, sought the path that
maximizes value without undue risk.
We have applied this culture of discipline to our review of Marcato's
candidates for the Board. We concluded that one of Marcato's nominees,
Sam Rovit, would be a valuable addition to the Board. In our discussions
with Sam, it was clear that he prioritizes the interests of all
shareholders, has a distinguished record of achievement and brings
unique insights and skills in the food service and consumer sectors. We
therefore welcomed him onto our slate and encourage shareholders to vote
for him to join our Board.
That said, we have serious concerns about Marcato's other three nominees.
EMIL LEE SANDERS VASTLY EXAGGERATES HIS LIMITED ACHIEVEMENTS AND HAS
A MAJOR CONFLICT OF INTEREST
We are well acquainted with Mr. Sanders because he used to work for
Buffalo Wild Wings. Marcato's definitive proxy statement misrepresents
Mr. Sanders accomplishments while at the company. It falsely
states that he was responsible for opening 486 units in seven years,
while driving annual sales of $2.5 billion.
This is simply not true. During the period Mr. Sanders was employed by
the company, Buffalo Wild Wings only opened 281
units. And, in the year before Mr. Sanders left by mutual
arrangement, the company reported sales of less
than $1 billion.
As importantly, Mr. Sanders has a significant conflict of interest. He
has expressed a strong desire to buy Buffalo Wild Wings units and become
a franchisee. He has been soliciting our franchisees and attempting to
scare them into selling their restaurants by suggesting that Marcato's
plans for the company will soon make the restaurant units less valuable:
"[T]he timing for you and your investors [to sell to me] could not be
better," Mr. Sanders wrote to [several of] our franchisees because "the
Marcato Hedge Fund efforts [mean] too much available product in the
market will cause a commensurate decline in value."2
To be clear: Mr. Sanders wants to buy our restaurant units. He has every
interest in driving the value of those units lower so he can buy at a
bargain price. And, he has said that Marcato's plan will do precisely
But none of that is good for shareholders. If you vote for Mr. Sanders,
you are voting to put the proverbial ‘fox in the hen house.'
Mr. Sanders's claimed "achievements" are false and his conflict of
interest irrefutable. Shareholders have no reason to have confidence in
his ability to serve their interests.
MICK MCGUIRE'S PRIOR BOARD SERVICE HAS FAILED TO CREATE VALUE FOR
Mr. McGuire has no operating or execution experience at a public
company, and he has no track record of success in the boardroom:
A few months after joining the Board of Borders Group, Inc., the
company put itself up for sale, and then failed to find a buyer.
Subsequently, Mr. McGuire became Chairman.
Mr. McGuire resigned from that post shortly before Borders
filed for bankruptcy.
During Mr. McGuire's brief one-year stint on the Board of NCR
Corporation - infamously referred to as "the lost year" by NCR
insiders - the company's share price dropped 8%.
Since resigning and selling his stake at the end of 2015, NCR's
share price has risen 69%.
Shareholders should be wary of electing a short-term activist
investor with a poor track record of value creation.
SCOTT BERGREN HAD A POOR PERFORMANCE RECORD AS THE CEO OF PIZZA HUT
AND HIS SKILL SET IS ALREADY WELL REPRESENTED ON THE BOARD
Scott Bergren's experience at Yum! Brands is already well represented on
the Board by independent director Harmit Singh, who served for 14 years
at Yum! Brands and held various global leadership roles, including Chief
Financial Officer. In addition, our nominee, Janice Fields, former
President of McDonald's USA, LLC, strengthens the Board's restaurant and
Mr. Bergren's record at Pizza Hut between 2011 and 2014 is not
distinguished. During that period, Pizza Hut experienced material
same-store sales weakness compared to Domino's and Papa John's, its two
principal competitors. The stock price of Pizza Hut's parent company,
Yum! Brands, also performed very poorly compared to Domino's and Papa
John's during Mr. Bergren's tenure.
Mr. Bergren's history as a brand CEO is not distinguished and his
experience is duplicative with current members of the Board and its
PROTECT THE VALUE OF YOUR INVESTMENT -
VOTE THE YELLOW
PROXY CARD TODAY
We do not believe it would be prudent to radically shift the Board's
composition or the strategy of Buffalo Wild Wings. Marcato wants you to
empty the Board of all institutional knowledge so that there is room for
Mick McGuire (who has no operational experience and has not added value
for shareholders when he has served on public company Boards), Lee
Sanders (who has been less than accurate about his past and has
significant conflicts of interest) and Scott Bergren (who has no
demonstrated record of achievement). That would be a mistake.
Instead, we encourage you to protect the value of your investment in
Buffalo Wild Wings by using the YELLOW proxy card to vote by
telephone or Internet. No matter how few shares you own, it is important
that all shareholders have their voices heard in this critically
important decision regarding your investment. We further encourage you
to discard any proxy materials sent to you by Marcato.
We thank you for your continued support.
Jerry R. Rose
/s/ Jerry R. Rose
Chairman of the Board
and Independent Director
Cynthia L. Davis
/s/ Cynthia L. Davis
Andre J. Fernandez
/s/ Andre J. Fernandez
Harry A. Lawton III
/s/ Harry A. Lawton III
J. Oliver Maggard
/s/ J. Oliver Maggard
Harmit J. Singh
/s/ Harmit J. Singh
Sally J. Smith
/s/ Sally J. Smith
CEO & President and Director
James M. Damian
/s/ James M. Damian
Independent Director (retiring 2017)
Michael P. Johnson
/s/ Michael P. Johnson
Independent Director (retiring 2017)
If you have any questions or require any assistance with voting your
please contact the Company's proxy solicitor listed below:
105 Madison Avenue
New York, New York 10016
Call Collect: (212) 929-5500
Toll-Free (800) 322-2885
Lazard Ltd is serving as financial advisor and Faegre Baker Daniels is
serving as legal advisor to the company.
About the Company
Buffalo Wild Wings, Inc., founded in 1982 and headquartered in
Minneapolis, is a growing owner, operator and franchisor of Buffalo Wild
Wings(R) restaurants featuring a variety of boldly-flavored,
made-to-order menu items including its namesake Buffalo, New York-style
chicken wings. The Buffalo Wild Wings menu specializes in 21
mouth-watering signature sauces and seasonings with flavor sensations
ranging from Sweet BBQ(TM) to Blazin'(R). Guests enjoy a welcoming
neighborhood atmosphere that includes an extensive multi-media system
for watching their favorite sporting events. Buffalo Wild Wings is the
recipient of hundreds of "Best Wings" and "Best Sports Bar" awards from
across the country. There are currently more than 1,220 Buffalo Wild
Wings locations around the world.
To stay up-to-date on all the latest events and offers for sports fans
and wing lovers, like Buffalo Wild Wings on Facebook, follow @BWWings
on Twitter and visit www.BuffaloWildWings.com.
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 December 25,
2016, as updated or supplemented by subsequent reports we file with the
SEC. We do not assume any obligation to publicly update any
forward-looking statement after they are made, whether as a result of
new information, future events or otherwise.
Buffalo Wild Wings, Inc., its directors and certain of its executive
officers and employees are participants in the solicitation of proxies
from Buffalo Wild Wings shareholders in connection with its 2017 annual
meeting of shareholders to be held on June 2, 2017. Information
concerning the identity and interests of these persons is available in
the definitive proxy statement Buffalo Wild Wings filed with the SEC on
April 21, 2017.
Buffalo Wild Wings has filed a definitive proxy statement in connection
with its 2017 annual meeting. The definitive proxy statement, any
amendments thereto and any other relevant documents, and other materials
filed with the SEC concerning Buffalo Wild Wings are (or will be, when
filed) available free of charge at http://www.sec.gov
Shareholders should read carefully the definitive proxy statement and
any other relevant documents that Buffalo Wild Wings files with the SEC
when they become available before making any voting decision because
they contain important information.
1 Source: Company filings.
2 Source: Lee Sanders, August 2016 email. Permission to use
quotations neither sought nor obtained.
3 Source: Company filings and FactSet. Market data as of
December 31, 2014.
4 Represents U.S. same-store sales for Pizza Hut and North
American same-store sales for Papa John's and Domino's.
View source version on businesswire.com: http://www.businesswire.com/news/home/20170522005840/en/
Buffalo Wild Wings, Inc.
Additional Investor Contact
Bob Marese/Paul Schulman
Frank, Wilkinson Brimmer Katcher
Meaghan Repko / Nick Lamplough
Source: Buffalo Wild Wings, Inc.
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