MINNEAPOLIS, Jan. 22, 2015 /PRNewswire/ -- Groveland Capital
LLC announced today that it has sent a letter to the Board of
Directors of Biglari Holdings Inc. (NYSE: BH) proposing corporate
governance reform. Groveland Capital believes that good corporate
governance practices can drive significant value to all
shareholders. The body of the letter is as follows:
Dear Members of the Board of Directors:
We believe that good corporate governance practices can drive
significant value to all shareholders, as well as accrue to the
benefit of management over the long-term. In this regard, we
are concerned that board practices of Biglari Holdings Inc. (the
"Company") have ranked at the bottom of the possible range of the
ISS Governance QuickScore, and that ISS has commented repeatedly on
the outsized Chief Executive Officer (CEO) compensation not being
in alignment with company performance. So, we are proposing a
corporate governance reform plan to the Board of Directors.
Specifically, we believe the Board should implement the following
actions as soon as possible:
- Redeem the Company's limited partner interests in The Lion
Fund, L.P. and The Lion Fund II, L.P. (collectively, the
"investment partnerships"), with the redemption being effected
in-kind.
- After the in-kind redemption of the Company's limited partner
interests in the investment partnerships, retire or treat as
treasury shares all of the Company's shares formerly held by the
investment partnerships, and implement a binding Company policy
that all shares of the Company that are held by affiliates of the
Company, where the Company funded, directly or indirectly, the
purchase of such shares, are either not voted on matters brought
before shareholders of the Company, or are mirror voted based on
the votes cast by shareholders unaffiliated with such
affiliates.
- Eliminate the licensing agreement between the Company and its
CEO.
- Establish a binding Company policy that all direct and indirect
compensation of Mr. Sardar Biglari,
including compensation and fees received from investment
partnerships in which the Company (or any of its subsidiaries) is a
limited partner, and Mr. Biglari or his affiliate is the general
partner, be approved by a Committee of the Board of Directors that
is comprised of (1) members who have no long-time association with
Mr. Biglari or any members of management of the Company, and (2)
members who are independent in accordance with the director
independence standards of the New York Stock Exchange.
- Restructure the composition of the Company's Board of Directors
by appointing to the Board (a) two members elected by the Company's
current management; (b) two members elected by Groveland Master
Fund Ltd., formerly known as Groveland Hedged Credit Master Fund
Ltd. ("Groveland"), with both such members being independent in
accordance with the director independence standards of the New York
Stock Exchange; and (c) two members elected jointly by the
Company's current management and Groveland, with both such members
being independent in accordance with the director independence
standards of the New York Stock Exchange and both being selected
from a list of 10 candidates prepared by a nationally recognized
director search firm.
We request that the Board of Directors adopt the governance
reform plan outlined above, in advance of the 2015 Annual Meeting.
This will save the Company the time and expense of a proxy contest
and allow management to focus on the day to day management of the
Company.
Please feel free to call me at anytime at 612-843-4302.
Please distribute a copy of this letter to every member of the
Board of Directors. We look forward to a prompt response from the
Board.
Important Information
This press release is not a solicitation of a proxy from any
security holder of Biglari Holdings Inc. (the "Company"). The
Groveland Group (whose members are identified below) has nominated
Nicholas J. Swenson, Seth G. Barkett, Thomas
R. Lujan, James W. Stryker,
Stephen J. Lombardo III, and
Ryan P. Buckley as nominees to the
Company's board of directors and presently intends to solicit votes
for the election of Nicholas J.
Swenson, Seth G. Barkett,
Thomas R. Lujan, James W. Stryker, Stephen J. Lombardo III, and Ryan P. Buckley as members of the Company's
board of directors (the "Groveland Nominees"). The Groveland Group
will send a definitive proxy statement, WHITE proxy card and
related proxy materials to shareholders of the Company seeking
their support of the Groveland Nominees at the Company's 2015
Annual Meeting of Shareholders. Shareholders are urged to read
the definitive proxy statement and WHITE proxy card when they
become available, because they will contain important information
about the Groveland Group, the Groveland Nominees, the Company and
related matters. Shareholders may obtain a free copy of
the definitive proxy statement and WHITE proxy card (when
available) and other documents filed by the Groveland Group with
the Securities and Exchange Commission ("SEC") at the SEC's web
site at www.sec.gov. The definitive proxy statement (when
available) and other related SEC documents filed by the Groveland
Group with the SEC may also be obtained free of charge from the
Groveland Group.
Participants in Solicitation
The "Groveland Group" currently consists of the following
persons who will be participants in the solicitation from the
Company's shareholders of proxies in favor of the Groveland
Nominees: Groveland Master Fund Ltd. (formerly known as Groveland
Hedged Credit Master Fund Ltd.), Groveland Hedged Credit Fund LLC,
Groveland Capital LLC, Nicholas J.
Swenson, and Seth G.
Barkett. Along with the Groveland Group, the following
are also participants in the solicitation: Thomas R. Lujan, James
W. Stryker, Stephen J. Lombardo
III, and Ryan P. Buckley. The
participants may have interests in the solicitation, including as a
result of holding shares of the Company's common stock.
Information regarding the participants and their interests may
be found in the Notice of Intent to Nominate Directors and Submit
Nominees for Election that the Groveland Group sent to the Company
on November 21, 2014, as filed with
the SEC on that same date. These materials may be accessed
from the SEC's website free of charge.
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/groveland-calls-for-improved-corporate-governance-at-biglari-holdings-300024166.html
SOURCE Groveland Capital LLC