sec document
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
--------------
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(a)
(Amendment No. )(1)
The Steak N Shake Company
-------------------------
(Name of Issuer)
Common Stock, $.50 Par Value
----------------------------
(Title of Class of Securities)
857873-10-3
-----------
(CUSIP Number)
STEVEN WOLOSKY, ESQ.
OLSHAN GRUNDMAN FROME ROSENZWEIG & WOLOSKY LLP
Park Avenue Tower
65 East 55th Street
New York, New York 10022
(212) 451-2300
--------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
July 30, 2007
-------------
(Date of Event Which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition that is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the
following box / /.
NOTE. Schedules filed in paper format shall include a signed original and
five copies of the schedule, including all exhibits. SEE Rule 13d-7 for other
parties to whom copies are to be sent.
(Continued on following pages)
(Page 1 of 29 Pages)
------------
(1) The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, SEE the
NOTES).
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CUSIP No. 857873-10-3 13D Page 2 of 29 Pages
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================================================================================
1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
The Lion Fund, L.P.
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) / /
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY - 0 -
OWNED BY -----------------------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON WITH 1,659,445
-----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
- 0 -
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
1,659,445
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
1,659,445
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.8%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
================================================================================
*SEE INSTRUCTIONS BEFORE FILLING OUT!
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CUSIP No. 857873-10-3 13D Page 3 of 29 Pages
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================================================================================
1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Biglari Capital Corp.
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
AF, WC
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) / /
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Texas
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY - 0 -
OWNED BY -----------------------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON WITH 1,659,445
-----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
- 0 -
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
1,659,445
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
1,659,445
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.8%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
================================================================================
*SEE INSTRUCTIONS BEFORE FILLING OUT!
---------------------- ----------------------
CUSIP No. 857873-10-3 13D Page 4 of 29 Pages
---------------------- ----------------------
================================================================================
1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Sardar Biglari
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
AF, WC
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) / /
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
USA
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY - 0 -
OWNED BY -----------------------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON WITH 1,659,445
-----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
- 0 -
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
1,659,445
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
1,659,445
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.8%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
================================================================================
*SEE INSTRUCTIONS BEFORE FILLING OUT!
---------------------- ----------------------
CUSIP No. 857873-10-3 13D Page 5 of 29 Pages
---------------------- ----------------------
================================================================================
1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Western Sizzlin Corp.
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) / /
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY - 0 -
OWNED BY -----------------------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON WITH 1,659,445
-----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
- 0 -
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
1,659,445
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
1,659,445
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.8%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
================================================================================
*SEE INSTRUCTIONS BEFORE FILLING OUT!
---------------------- ----------------------
CUSIP No. 857873-10-3 13D Page 6 of 29 Pages
---------------------- ----------------------
================================================================================
1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Dr. Philip L. Cooley
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
AF, WC, PF
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) / /
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
USA
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY - 0 -
OWNED BY -----------------------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON WITH 1,659,445
-----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
- 0 -
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
1,659,445
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
1,659,445
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.8%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
================================================================================
*SEE INSTRUCTIONS BEFORE FILLING OUT!
---------------------- ----------------------
CUSIP No. 857873-10-3 13D Page 7 of 29 Pages
---------------------- ----------------------
The following constitutes the Schedule 13D filed by the undersigned (the
"Schedule 13D").
Item 1. SECURITY AND ISSUER.
This statement relates to shares of the Common Stock, par value $.50 (the
"Shares"), of The Steak N Shake Company (the "Issuer"). The address of the
principal executive offices of the Issuer is 36 S. Pennsylvania Street, Suite
500, Indianapolis, Indiana 46204. Certain of the Reporting Persons own
American-style call options ("Options") to purchase Shares that are immediately
exercisable. The Shares and Options are collectively referred to herein as the
"Securities".
Item 2. IDENTITY AND BACKGROUND.
(a-c, f) This Schedule 13D is being filed jointly by (i) The Lion Fund,
L.P., a Delaware limited partnership (the "Lion Fund"), (ii) Biglari Capital
Corp., a Texas corporation ("BCC"), (iii) Sardar Biglari, a United States
citizen, (iv) Western Sizzlin Corp., a Delaware corporation ("WSC"), and (iv)
Dr. Philip L. Cooley, a United States citizen (collectively, the "Reporting
Persons").
The principal business address of the Lion Fund, BCC and Sardar Biglari is
9311 San Pedro Avenue, Suite 1440, San Antonio, Texas 78216. The principal
business address of Dr. Philip L. Cooley is c/o Trinity University, One Trinity
Place, San Antonio, Texas 78212. The principal business address of WSC is 1338
Plantation Road, Roanoke, Virginia 24012.
Sardar Biglari is the Chairman and Chief Executive Officer of BCC, an
investment management firm that serves as the general partner to the Lion Fund.
The principal business of the Lion Fund is purchasing, holding and selling
securities for investment purposes. Mr. Biglari is also the Chairman of the
Board, Chief Executive Officer and President of WSC. Dr. Philip L. Cooley is the
Prassel Distinguished Professor of Business at Trinity University, San Antonio,
Texas. Dr. Cooley is also an advisory director of BCC and Vice Chairman of the
Board of WSC. The principal business of WSC is to operate and/or franchise
restaurants. Set forth in Schedule A annexed hereto is the name and present
principal occupation or employment and the name, principal business and address
of any corporation or other organization in which such employment is conducted,
of each of WSC's directors and executive officers, as of the date hereof.
(d) Neither the Reporting Persons nor any person listed on Schedule A
has, during the last five years, been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors).
(e) Neither the Reporting Persons nor any person listed on Schedule A
has, during the last five years, been a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction and as a result of
such proceeding was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to, Federal
or state securities laws or finding any violation with respect to such laws.
---------------------- ----------------------
CUSIP No. 857873-10-3 13D Page 8 of 29 Pages
---------------------- ----------------------
Item 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
The aggregate purchase price of the Shares owned directly by the Lion Fund
is $15,220,138. The aggregate purchase price of the Options owned directly by
the Lion Fund is $50,400. The Securities owned directly by the Lion Fund were
acquired with the working capital of the Lion Fund.
The aggregate purchase price of the Shares owned directly by WSC is
$2,148,828. The aggregate purchase price of the Options owned directly by WSC is
$1,630,937. The Securities owned directly by WSC were acquired with the working
capital of WSC.
The aggregate purchase price of the Shares owned directly by Dr. Cooley
and owned directly by Dr. Cooley's spouse, Sandy Cooley who shares the same
business address as Dr. Cooley, which he may also be deemed to beneficially own
is $93,297. Of the 6,300 Shares beneficially owned by Dr. Cooley, 3,800 Shares
were acquired with Dr. Cooley's personal funds, 2,000 Shares were acquired with
his spouse's personal funds and 500 Shares were acquired with the working
capital of BCC and subsequently gifted to Dr. Cooley.
The Lion Fund and WSC effect purchases of securities primarily through
margin accounts maintained for them with prime brokers, which may extend margin
credit to them as and when required to open or carry positions in the margin
accounts, subject to applicable federal margin regulations, stock exchange rules
and the prime brokers' credit policies. In such instances, the positions held in
the margin accounts are pledged as collateral security for the repayment of
debit balances in the accounts.
Item 4. PURPOSE OF TRANSACTION.
On August 13, 2007, Sardar Biglari and Philip L. Cooley met with Alan B.
Gilman, Chairman of the Board, and management of the Issuer concerning the
business, operations and future plans of the Issuer. During this meeting, Mr.
Biglari requested representation on the Board of Directors. On August 16, 2007,
the Lion Fund delivered a letter to the Issuer nominating Sardar Biglari and
Philip L. Cooley (collectively, the "Nominees"), as set forth therein, for
election to the Issuer's Board of Directors at the Issuer's 2008 annual meeting
of shareholders, or any other meeting of shareholders held in lieu thereof, and
any adjournments, postponements, rescheduling or continuations thereof (the
"Annual Meeting"). The Lion Fund submitted its nomination of the Nominees in
accordance with the procedures set forth in the Issuer's By-laws. A copy of the
letter is attached hereto and is incorporated herein by reference.
The Reporting Persons acquired the Securities for investment purposes. The
Reporting Persons continue to evaluate the business prospects of the Issuer, as
well as its present and future intentions. The Reporting Persons may from time
to time communicate with management, with members of the Board of Directors, or
with other shareholders of the Issuer.
The Reporting Persons reserve the right to acquire additional Securities,
to dispose of such Securities at any time, or to formulate other purposes, plans
or proposals regarding the Issuer or the Securities, to the extent deemed
advisable in light of their general investment policies, market conditions or
other factors.
---------------------- ----------------------
CUSIP No. 857873-10-3 13D Page 9 of 29 Pages
---------------------- ----------------------
No Reporting Person has any present plan or proposal which would relate to
or result in any of the matters set forth in subparagraphs (a) - (j) of Item 4
of Schedule 13D except as set forth herein or such as would occur upon
completion of any of the actions discussed above.
Item 5. INTEREST IN SECURITIES OF THE ISSUER.
(a-e) As of the date hereof, each of the Reporting Persons may be deemed
to be the beneficial owner of 1,659,445 Shares or 5.8% of the outstanding Shares
of the Issuer, based upon the 28,469,808 Shares outstanding as of July 31, 2007,
according to the Issuer's most recent Form 10-Q. The 1,659,445 Shares reported
herein as beneficially owned by the Reporting Persons consist of the following:
(1) 929,200 Shares held directly by the Lion Fund and 20,000 Shares underlying
Options held directly by the Lion Fund, (2) 142,845 Shares held directly by WSC
and 561,100 Shares underlying Options held directly by WSC, (3) 4,300 Shares
held directly by Dr. Cooley, and (4) 2,000 Shares held directly by Dr. Cooley's
spouse which Dr. Cooley may also be deemed to beneficially own.
Each of the Reporting Persons may be deemed to have the sole power to vote
or direct the vote of 0 Shares and the shared power to vote or direct the vote
of 1,659,445 Shares.
Each of the Reporting Persons may be deemed to have the sole power to
dispose or direct the disposition of 0 Shares and the shared power to dispose or
direct the disposition of 1,659,445 Shares.
Schedule B annexed hereto lists all transactions in the Securities by the
Reporting Persons during the past sixty days. All of such transactions were
effected in the open market, except as otherwise noted on Schedule B.
No person other than the Reporting Persons is known to have the right to
receive, or the power to direct the receipt of dividends from, or proceeds from
the sale of, the Securities except for Dr. Cooley's spouse with respect to the
2,000 Shares she owns directly. The Reporting Persons specifically disclaim
beneficial ownership of the Securities reported herein except to the extent of
their pecuniary interest therein.
Item 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
On August 16, 2007, the Reporting Persons entered into a Joint Filing and
Solicitation Agreement in which, among other things, (a) the parties agreed to
the joint filing on behalf of each of them of statements on Schedule 13D with
respect to the securities of the Issuer, (b) the parties agreed to solicit
proxies or written consents for the election of the Nominees, or any other
person(s) nominated by the Lion Fund, to the Issuer's Board of Directors at the
Annual Meeting (the "Solicitation"), and (c) the Lion Fund and WSC agreed to
share equally all expenses incurred in connection with the Reporting Persons'
activities, including approved expenses incurred by any of the parties in
connection with the Solicitation, subject to certain limitations. A copy of the
Joint Filing and Solicitation Agreement is attached hereto and is incorporated
herein by reference.
---------------------- ----------------------
CUSIP No. 857873-10-3 13D Page 10 of 29 Pages
---------------------- ----------------------
Other than as described herein, there are no contracts, arrangements,
understandings or relationships among the Reporting Persons, or between the
Reporting Persons and any other person, with respect to the securities of the
Issuer.
Item 7. MATERIAL TO BE FILED AS EXHIBITS.
A. Nomination Letter from The Lion Fund, L.P. to The Steak N Shake
Company dated August 16, 2007 (filed herewith as Exhibit A).
B. Joint Filing and Solicitation Agreement by and among The Lion Fund,
L.P., Biglari Capital Corp., Sardar Biglari, Western Sizzlin Corp.
and Dr. Philip L. Cooley dated August 16, 2007 (filed herewith as
Exhibit B).
C. Power of Attorney (filed herewith as Exhibit C).
---------------------- ----------------------
CUSIP No. 857873-10-3 13D Page 11 of 29 Pages
---------------------- ----------------------
SIGNATURES
After reasonable inquiry and to the best of his knowledge and
belief, each of the undersigned certifies that the information set forth in this
statement is true, complete and correct.
Dated: August 16, 2007 THE LION FUND L.P.
By: Biglari Capital Corp.
General Partner
By: /s/ Sardar Biglari
---------------------------------------
Sardar Biglari, Chief Executive Officer
BIGLARI CAPITAL CORP.
By: /s/ Sardar Biglari
---------------------------------------
Sardar Biglari, Chief Executive Officer
/s/ Sardar Biglari
-------------------------------------------
SARDAR BIGLARI
WESTERN SIZZLIN CORP.
By: /s/ Sardar Biglari
---------------------------------------
Sardar Biglari, Chief Executive Officer
/s/ Philip L. Cooley
-------------------------------------------
DR. PHILIP L. COOLEY
---------------------- ----------------------
CUSIP No. 857873-10-3 13D Page 12 of 29 Pages
---------------------- ----------------------
SCHEDULE A
DIRECTORS AND EXECUTIVE OFFICERS OF WESTERN SIZZLIN CORP.
NAME AND POSITION WITH PRESENT PRINCIPAL BUSINESS
WESTERN SIZZLIN OCCUPATION ADDRESS
--------------- ---------- -------
Sardar Biglari, Chairman Chairman of the Board c/o The Lion Fund L.P.
of the Board, Chief and Chief Executive 9311 San Pedro Avenue,
Executive Officer and Officer of Biglari Suite 1440
President Capital Corp., an San Antonio, Texas 78216
investment management
firm
Philip L. Cooley, Vice Prassel Distinguished c/o Trinity University
Chairman of the Board Professor of Business at One Trinity Place
Trinity University, San San Antonio, Texas 78212
Antonio, Texas
Titus W. Greene, Director Director of Western c/o Western Sizzlin Corp.
Sizzlin Corp., an 1338 Plantation Road
operator and/or Roanoke, Virginia 24012
franchiser of restaurants
Jonathan Dash, Director President of Dash c/o Dash Acquisitions, LLC
Acquisitions, LLC, an 183 Rodeo Drive
investment management Beverly Hills, California
company 90212
Kenneth R. Cooper, Attorney with the Law c/o Law Office of Kenneth
Director Office of Kenneth R. R. Cooper
Cooper 14607 San Pedro Avenue,
Suite 130
San Antonio, Texas 78232
Robyn B. Mabe, Vice Vice President, Chief c/o Western Sizzlin Corp.
President, Chief Financial Officer and 1338 Plantation Road
Financial Officer and Secretary / Treasurer of Roanoke, Virginia 24012
Secretary / Treasurer Western Sizzlin Corp.,
an operator and/or
franchiser of restaurants
---------------------- ----------------------
CUSIP No. 857873-10-3 13D Page 13 of 29 Pages
---------------------- ----------------------
SCHEDULE B
TRANSACTIONS IN THE SECURITIES BY THE REPORTING PERSONS DURING THE PAST 60
DAYS
TRANSACTIONS IN COMMON STOCK
Shares Purchased Price Per Share ($) Date of Purchase
---------------- ------------------- ----------------
THE LION FUND, L.P.
-------------------
2,000 15.2050 06/22/07
6,000 14.9258 06/25/07
85,000 17.1033 06/26/07
20,000 17.0338 06/27/07
140,000 17.0646 06/28/07
53,300 16.7723 06/29/07
3,000 16.5680 07/02/07
10,000 16.7836 07/03/07
6,000 16.6042 07/05/07
6,000 15.6992 07/26/07
7,500 15.6211 07/27/07
12,500 15.0877 07/30/07
18,000 15.2569 07/31/07
9,300 15.0200 08/01/07
17,000 14.9690 08/03/07
3,000 14.7708 08/06/07
2,000 16.0100 08/07/07
12,800 13.3579 08/13/07
70,000 13.6622 08/14/07
18,000 14.0286 08/15/07
WESTERN SIZZLIN CORP.
---------------------
1,500 16.6007 07/18/07
3,000 16.8190 07/19/07
4,500 15.6992 07/26/07
7,500 15.6111 07/27/07
12,500 15.0777 07/30/07
12,000 15.2569 07/31/07
4,000 15.0200 08/01/07
3,000 14.9690 08/03/07
1,600 14.7708 08/06/07
3,000 13.3579 08/13/07
30,000 13.6622 08/14/07
7,300 14.0286 08/15/07
BIGLARI CAPITAL CORP.
---------------------
500 16.7099 04/11/07
DR. PHILIP L. COOLEY
--------------------
500* -- 04/26/07
3,800 14.9900 06/15/07
2,000** 13.9900 08/15/07
--------------------------------------------------------------------------------
* Shares gifted from Biglari Capital Corp. to Dr. Philip L. Cooley. Biglari
Capital Corp. no longer owns directly any securities of the Issuer.
** Shares acquired by Dr. Cooley's spouse that may be deemed to be
beneficially owned by Dr. Cooley.
---------------------- ----------------------
CUSIP No. 857873-10-3 13D Page 14 of 29 Pages
---------------------- ----------------------
TRANSACTIONS IN AMERICAN-STYLE CALL OPTIONS / STRIKE PRICE: $15 / EXPIRATION:
12.22.07
Units Purchased Price Per Unit ($) Date of Purchase
--------------- ------------------ ----------------
THE LION FUND, L.P.
-------------------
200 2.5200 07/25/07
WESTERN SIZZLIN CORP.
---------------------
40 2.7700 07/06/07
1,900 2.7349 07/10/07
500 2.9130 07/11/07
110 3.0241 07/12/07
100 3.1150 07/13/07
500 3.0950 07/16/07
100 3.1050 07/17/07
10 2.9300 07/18/07
461 3.0933 07/19/07
1,000 2.6580 07/24/07
500 2.5150 07/25/07
50 1.7650 07/31/07
TRANSACTIONS IN AMERICAN-STYLE CALL OPTIONS / STRIKE PRICE: $12.50 /
EXPIRATION: 12.22.07
Units Purchased Price Per Unit ($) Date of Purchase
--------------- ------------------ ----------------
WESTERN SIZZLIN CORP.
---------------------
50 4.9150 07/11/07
10 5.2300 07/12/07
10 5.2300 07/19/07
10 5.2300 07/20/07
200 4.7650 07/24/07
60 3.8150 07/31/07
---------------------- ----------------------
CUSIP No. 857873-10-3 13D Page 15 of 29 Pages
---------------------- ----------------------
EXHIBIT A
---------
THE LION FUND, L.P.
9311 SAN PEDRO AVENUE, SUITE 1440
SAN ANTONIO, TEXAS 78216
TELEPHONE (210) 344-3400
FAX (210) 344-3411
August 16, 2007
VIA FACSIMILE AND FEDERAL EXPRESS
The Steak N Shake Company
36 S. Pennsylvania Street, Suite 500
Indianapolis, Indiana 46204
Attn: Corporate Secretary
Re: NOTICE OF INTENTION TO NOMINATE INDIVIDUALS FOR ELECTION AS
DIRECTORS AT THE 2008 ANNUAL MEETING OF SHAREHOLDERS OF THE STEAK N
SHAKE COMPANY
Dear Sir:
This letter shall serve to satisfy the advance notice requirements of
Article IV, Section 9 of the Restated By-Laws (the "By-Laws") of The Steak N
Shake Company ("Steak N Shake") as to the nomination by The Lion Fund, L.P., a
Delaware limited partnership ("Lion Fund"), of two (2) nominees for election to
the Board of Directors of Steak N Shake (the "Board") at the 2008 annual meeting
of shareholders of Steak N Shake, or any other meeting of shareholders held in
lieu thereof, and any adjournments, postponements, reschedulings or
continuations thereof (the "Annual Meeting").
This letter and the Exhibits attached hereto are collectively referred to
as the "Notice." Lion Fund directly owns 929,200 shares of common stock, $0.50
par value per share (the "Common Stock"), of Steak N Shake, 100 shares of which
are held of record by Lion Fund, and American-style call options (the "Options")
to acquire 20,000 shares of Common Stock that are immediately exercisable.
Through this Notice, Lion Fund hereby nominates and notifies you of its intent
to nominate Sardar Biglari and Dr. Philip L. Cooley as nominees (the "Nominees")
to be elected to the Board at the Annual Meeting. Lion Fund believes that the
terms of the ten (10) directors currently serving on the Board expire at the
Annual Meeting. To the extent there are in excess of ten (10) vacancies on the
Board to be filled by election at the Annual Meeting or Steak N Shake increases
the size of the Board above its existing size, Lion Fund reserves the right to
nominate additional nominees to be elected to the Board at the Annual Meeting.
Additional nominations made pursuant to the preceding sentence are without
prejudice to the position of Lion Fund that any attempt to increase the size of
the current Board or to classify the Board constitutes an unlawful manipulation
of Steak N Shake's corporate machinery. If this Notice shall be deemed for any
reason by a court of competent jurisdiction to be ineffective with respect to
the nomination of any of the Nominees at the Annual Meeting, or if any
individual Nominee shall be unable to serve for any reason, this Notice shall
continue to be effective with respect to the remaining Nominee and as to any
replacement Nominee selected by Lion Fund.
---------------------- ----------------------
CUSIP No. 857873-10-3 13D Page 16 of 29 Pages
---------------------- ----------------------
The information concerning Lion Fund and the Nominees required by Article
IV, Section 9 of the By-Laws is set forth below:
(i) STATEMENT OF THE QUALIFICATIONS OF EACH NOMINEE:
SARDAR BIGLARI (AGE 29) has served as the Chairman and Chief
Executive Officer of Biglari Capital Corp., the general partner of
The Lion Fund, L.P., a private investment fund, since its inception
in 2000. He has also served as the Chairman of the Board of Western
Sizzlin Corp., a steak and buffet restaurant chain operating and
franchising in approximately 125 locations, since March 2006 and as
its Chief Executive Officer and President since May 2007. In 1996,
Mr. Biglari founded INTX. Networking, LLC, an internet service
provider sold to Internet America, Inc. in 1999. Mr. Biglari is a
member of the CFA Institute and CFA Society of San Antonio and is a
director of Consumer Credit Counseling Service of Greater San
Antonio and the CFA Society of San Antonio. He earned a Bachelor of
Science degree with a concentration in finance and international
business from Trinity University. The principal business address of
Mr. Biglari is c/o Biglari Capital Corp., 9311 San Pedro Avenue,
Suite 1440, San Antonio, Texas 78216.
DR. PHILIP L. COOLEY (AGE 63) has been an advisory director of
Biglari Capital Corp., the general partner of The Lion Fund, L.P., a
private investment fund, since 2000. He has served as Vice Chairman
of the Board of Western Sizzlin Corp., a steak and buffet restaurant
chain operating and franchising in approximately 125 locations,
since March 2006. Dr. Cooley has been the Prassel Distinguished
Professor of Business at Trinity University, San Antonio, Texas,
since 1985. Previously, he taught at the University of South
Carolina for 12 years and served on the faculties of the U.S. Armed
Forces Institute and the Far-East Division of the University of
Maryland. Dr. Cooley is a director of the Consumer Credit Counseling
Service of Greater San Antonio and the Credit Research Center at
Georgetown University. He serves on the board of trustees of the
Financial Management Association and the Eastern Finance
Association. Dr. Cooley holds a Ph.D. from Ohio State University, an
MBA from the University of Hawaii and a BME from the General Motors
Institute. The principal business address of Dr. Cooley is c/o
Trinity University, One Trinity Place, San Antonio, Texas 78212.
(ii) ALL INFORMATION RELATING TO EACH NOMINEE THAT IS REQUIRED TO BE
DISCLOSED IN SOLICITATIONS OF PROXIES FOR ELECTION OF DIRECTORS, OR
IS OTHERWISE REQUIRED, IN EACH CASE PURSUANT TO REGULATION 14A UNDER
THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED (THE "EXCHANGE
ACT"):
On August 16, 2007, Lion Fund, Biglari Capital Corp., a Texas
corporation ("BCC"), Western Sizzlin Corp., a Delaware corporation
("Western Sizzlin"), Sardar Biglari and Dr. Philip L. Cooley
(collectively, the "Group") entered into a Joint Filing and
Solicitation Agreement in which, among other things, (i) the parties
agreed to the joint filing on behalf of each of them of statements
on Schedule 13D with respect to the securities of Steak N Shake to
the extent required by applicable law, (ii) the parties agreed to
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CUSIP No. 857873-10-3 13D Page 17 of 29 Pages
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solicit proxies or written consents to elect the Nominees or any
other person designated by the Group as directors of Steak N Shake
and to take all other action necessary or advisable to achieve the
foregoing (the "Solicitation"), and (iii) Lion Fund and Western
Sizzlin agreed to share equally all expenses incurred in connection
with the Group's activities, including approved expenses incurred by
any of the parties in connection with the Solicitation, subject to
certain limitations.
Sardar Biglari's and Dr. Philip L. Cooley's biographical extracts
are set forth above. Sardar Biglari is Chairman and Chief Executive
Officer of BCC. Dr. Philip L. Cooley is an advisory director of BCC.
BCC serves as the general partner to Lion Fund. Mr. Biglari is also
Chairman of the Board, Chief Executive Officer and President of
Western Sizzlin. Dr. Philip L. Cooley is Vice Chairman of the Board
of Western Sizzlin. Lion Fund owns approximately 34% of the
outstanding common stock of Western Sizzlin. As of the date hereof,
Lion Fund directly owns 929,200 shares of Common Stock (100 shares
of which are held of record) and Options to purchase 20,000 shares
of Common Stock; Western Sizzlin directly owns 142,845 shares of
Common Stock and Options to purchase 561,100 shares of Common Stock;
Dr. Cooley directly owns 4,300 shares of Common Stock (500 shares of
which are held of record); and Dr. Cooley's spouse, Sandy Cooley who
shares the same business address as Dr. Cooley, directly owns 2,000
shares of Common Stock which Dr. Cooley may also be deemed to
beneficially own. In the aggregate, Lion Fund, Western Sizzlin, Dr.
Cooley and Dr. Cooley's spouse own 1,078,345 shares of Common Stock
and Options to purchase 581,100 shares of Common Stock. By virtue of
the relationships among the members of the Group discussed above and
the formation by them of a Group in connection with the
Solicitation, all the members of the Group may be deemed to
beneficially own all the securities of Steak N Shake beneficially
owned in the aggregate by the Group. Each member of the Group
disclaims beneficial ownership of such securities except to the
extent of his/its pecuniary interest therein. For information
regarding purchases and sales of securities beneficially owned by
each member of the Group during the past two years, see EXHIBIT A.
Lion Fund and Western Sizzlin effect purchases of securities
primarily through margin accounts maintained for them with prime
brokers, which may extend margin credit to them as and when required
to open or carry positions in the margin accounts, subject to
applicable federal margin regulations, stock exchange rules and the
prime brokers' credit policies. In such instances, the positions
held in the margin accounts are pledged as collateral security for
the repayment of debit balances in the accounts.
Except as set forth in this Notice (including the Exhibits attached
hereto), (i) during the past 10 years, no Nominee has been convicted
in a criminal proceeding (excluding traffic violations or similar
misdemeanors); (ii) no Nominee directly or indirectly beneficially
owns any securities of Steak N Shake; (iii) no Nominee owns any
securities of Steak N Shake which are owned of record but not
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CUSIP No. 857873-10-3 13D Page 18 of 29 Pages
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beneficially; (iv) no Nominee has purchased or sold any securities
of Steak N Shake during the past two years; (v) no part of the
purchase price or market value of the securities of Steak N Shake
owned by any Nominee is represented by funds borrowed or otherwise
obtained for the purpose of acquiring or holding such securities;
(vi) no Nominee is, or within the past year was, a party to any
contract, arrangements or understandings with any person with
respect to any securities of Steak N Shake, including, but not
limited to, joint ventures, loan or option arrangements, puts or
calls, guarantees against loss or guarantees of profit, division of
losses or profits, or the giving or withholding of proxies; (vii) no
associate of any Nominee owns beneficially, directly or indirectly,
any securities of Steak N Shake; (viii) no Nominee owns
beneficially, directly or indirectly, any securities of any parent
or subsidiary of Steak N Shake; (ix) no Nominee or any of his
associates was a party to any transaction, or series of similar
transactions, since the beginning of Steak N Shake's last fiscal
year, or is a party to any currently proposed transaction, or series
of similar transactions, to which Steak N Shake or any of its
subsidiaries was or is to be a party, in which the amount involved
exceeds $120,000; (x) no Nominee or any of his associates has any
arrangement or understanding with any person with respect to any
future employment by Steak N Shake or its affiliates, or with
respect to any future transactions to which Steak N Shake or any of
its affiliates will or may be a party; and (xi) no person, including
any of the Nominees, who is a party to an arrangement or
understanding pursuant to which the Nominees are proposed to be
elected has a substantial interest, direct or indirect, by security
holdings or otherwise in any matter to be acted on at the Annual
Meeting. There are no material proceedings to which any Nominee or
any of his associates is a party adverse to Steak N Shake or any of
its subsidiaries or has a material interest adverse to Steak N Shake
or any of its subsidiaries. With respect to each of the Nominees,
none of the events enumerated in Item 401(f)(1)-(6) of Regulation
S-K of the Securities Exchange Act of 1934 occurred during the past
five years.
A representative of Lion Fund intends to appear in person at the
Annual Meeting to nominate the persons specified in this Notice for
election to the Board.
(iii) DESCRIPTION OF ALL ARRANGEMENTS OR UNDERSTANDINGS AMONG THE
SHAREHOLDER SUBMITTING THIS NOTICE AND EACH NOMINEE.
Other than as stated herein, there are no arrangements or
understandings between Lion Fund and each Nominee or any other
person or persons pursuant to the nominations described herein.
(iv) WRITTEN CONSENT OF EACH NOMINEE TO BEING NAMED IN THE PROXY
STATEMENT AS A NOMINEE AND TO SERVING AS A DIRECTOR IF ELECTED.
Each of the Nominees has consented to be named as a nominee in any
proxy statement filed by Lion Fund in connection with the
solicitation of proxies for the election of the Nominees to the
Board and to serve as a director of Steak N Shake, if so elected.
Such consents are attached hereto as EXHIBIT B.
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CUSIP No. 857873-10-3 13D Page 19 of 29 Pages
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(v) AS TO THE SHAREHOLDER SUBMITTING THIS NOTICE AND THE BENEFICIAL
OWNER, IF ANY, ON WHOSE BEHALF THE NOMINATION IS MADE, THE NAME AND
ADDRESS OF SUCH SHAREHOLDER, AS THEY APPEAR ON STEAK N SHAKE'S
BOOKS, AND OF SUCH BENEFICIAL OWNER.
Name Address
---- -------
The Lion Fund LP 9311 San Pedro Avenue, Suite 1440
San Antonio, Texas 78216
(vi) AS TO THE SHAREHOLDER SUBMITTING THIS NOTICE AND THE BENEFICIAL
OWNER, IF ANY, ON WHOSE BEHALF THE NOMINATION IS MADE, THE CLASS AND
NUMBER OF SHARES OF STOCK OF STEAK N SHAKE WHICH ARE OWNED
BENEFICIALLY AND OF RECORD BY SUCH SHAREHOLDER AND SUCH BENEFICIAL
OWNER.
Name Class and Number of Shares
---- --------------------------
The Lion Fund, L.P.* 929,200 shares of Common Stock owned
directly, including 100 shares held
of record.
Options to purchase 20,000 shares of
Common Stock owned directly.
-----------------
* Lion Fund may also be deemed to beneficially own all securities
of Steak N Shake beneficially owned by Western Sizzlin and Dr.
Cooley as discussed in further detail above. Accordingly, Lion
Fund may be deemed to beneficially own in the aggregate
1,659,445 shares of Common Stock.
Please address any correspondence to The Lion Fund, L.P., Attention:
Sardar Biglari, telephone (210) 344-3400, facsimile (210) 344-3411 (with a copy
to our counsel, Olshan Grundman Frome Rosenzweig & Wolosky LLP, Park Avenue
Tower, 65 East 55th Street, New York, New York 10022, Attention: Steven Wolosky,
Esq., telephone (212) 451-2333, facsimile (212) 451-2222). The giving of this
Notice is not an admission that any procedures for notice concerning the
nomination of directors to the Board are legal, valid or binding, and Lion Fund
reserves the right to challenge their validity.
Very truly yours,
THE LION FUND, L.P.
By: Biglari Capital Corp.
General Partner
By: /s/ Sardar Biglari
-------------------------------------
Name: Sardar Biglari
Title: Chief Executive Officer
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CUSIP No. 857873-10-3 13D Page 20 of 29 Pages
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EXHIBIT A
TRANSACTIONS IN SECURITIES OF STEAK N SHAKE
DURING THE PAST TWO YEARS
TRANSACTIONS IN COMMON STOCK
Shares Purchased Price Per Share ($) Date of Purchase
---------------- ------------------- ----------------
THE LION FUND, L.P.
-------------------
25,000 16.7683 03/22/07
60,000 16.8493 03/23/07
68,000 17.0291 03/26/07
2,900 16.7966 03/27/07
13,300 16.7065 03/28/07
14,500 16.6361 03/29/07
20,600 16.6775 03/30/07
10,100 16.6889 04/02/07
10,200 17.0796 04/04/07
4,000 17.0608 04/05/07
38,300 16.9491 04/09/07
27,400 16.8361 04/10/07
17,144 16.7367 04/11/07
29,594 16.5294 04/12/07
1,000 16.4540 04/13/07
12,100 16.6511 04/17/07
8,919 16.5621 04/18/07
1,400 16.5114 04/19/07
16,200 16.7565 04/23/07
5,500 16.7238 04/24/07
10,943 16.8093 04/26/07
2,900 16.7317 04/27/07
27,800 16.3508 05/01/07
2,000 15.2050 06/22/07
6,000 14.9258 06/25/07
85,000 17.1033 06/26/07
20,000 17.0338 06/27/07
140,000 17.0646 06/28/07
53,300 16.7723 06/29/07
3,000 16.5680 07/02/07
10,000 16.7836 07/03/07
6,000 16.6042 07/05/07
6,000 15.6992 07/26/07
7,500 15.6211 07/27/07
12,500 15.0877 07/30/07
18,000 15.2569 07/31/07
9,300 15.0200 08/01/07
17,000 14.9690 08/03/07
3,000 14.7708 08/06/07
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CUSIP No. 857873-10-3 13D Page 21 of 29 Pages
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2,000 16.0100 08/07/07
12,800 13.3579 08/13/07
70,000 13.6622 08/14/07
18,000 14.0286 08/15/07
WESTERN SIZZLIN CORP.
---------------------
1,500 16.4293 03/07/07
3,200 16.5570 03/08/07
845 16.6410 03/09/07
8,700 16.8379 03/12/07
6,000 16.7830 03/13/07
700 16.7929 03/14/07
2,000 16.8065 03/15/07
30,000 14.9658 05/10/07
1,500 16.6007 07/18/07
3,000 16.8190 07/19/07
4,500 15.6992 07/26/07
7,500 15.6111 07/27/07
12,500 15.0777 07/30/07
12,000 15.2569 07/31/07
4,000 15.0200 08/01/07
3,000 14.9690 08/03/07
1,600 14.7708 08/06/07
3,000 13.3579 08/13/07
30,000 13.6622 08/14/07
7,300 14.0286 08/15/07
BIGLARI CAPITAL CORP.
---------------------
500 16.7099 04/11/07
DR. PHILIP L. COOLEY
--------------------
500* -- 04/26/07
3,800 14.9900 06/15/07
2,000** 13.9900 08/15/07
TRANSACTIONS IN AMERICAN-STYLE CALL OPTIONS / STRIKE PRICE: $15 / EXPIRATION:
12.22.07
Units Purchased Price Per Unit ($) Date of Purchase
--------------- ------------------ ----------------
THE LION FUND, L.P.
-------------------
200 2.5200 07/25/07
WESTERN SIZZLIN CORP.
---------------------
40 2.7700 07/06/07
1,900 2.7349 07/10/07
------------
* Shares gifted from Biglari Capital Corp. to Dr. Philip L. Cooley. Biglari
Capital Corp. no longer owns directly any securities of the Issuer.
** Shares acquired by Dr. Cooley's spouse that may be deemed to be beneficially
owned by Dr. Cooley.
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CUSIP No. 857873-10-3 13D Page 22 of 29 Pages
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500 2.9130 07/11/07
110 3.0241 07/12/07
100 3.1150 07/13/07
500 3.0950 07/16/07
100 3.1050 07/17/07
10 2.9300 07/18/07
461 3.0933 07/19/07
1,000 2.6580 07/24/07
500 2.5150 07/25/07
50 1.7650 07/31/07
TRANSACTIONS IN AMERICAN-STYLE CALL OPTIONS / STRIKE PRICE: $12.50 /
EXPIRATION: 12.22.07
Units Purchased Price Per Unit ($) Date of Purchase
--------------- ------------------ ----------------
WESTERN SIZZLIN CORP.
---------------------
50 4.9150 07/11/07
10 5.2300 07/12/07
10 5.2300 07/19/07
10 5.2300 07/20/07
200 4.7650 07/24/07
60 3.8150 07/31/07
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CUSIP No. 857873-10-3 13D Page 23 of 29 Pages
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EXHIBIT B
NOMINEE CONSENTS
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CUSIP No. 857873-10-3 13D Page 24 of 29 Pages
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SARDAR BIGLARI
c/o Biglari Capital Corp.
9311 San Pedro Avenue, Suite 1440
San Antonio, Texas 78216
August 16, 2007
The Steak N Shake Company
36 S. Pennsylvania Street, Suite 500
Indianapolis, Indiana 46204
Attn: Corporate Secretary
Dear Sir:
You are hereby notified that the undersigned consents to (i) being named
as a nominee in the notice provided by The Lion Fund, L.P. ("Lion Fund") of its
intention to nominate the undersigned as a director of The Steak N Shake Company
("Steak N Shake") at the 2008 annual meeting of shareholders, or any other
meeting of shareholders held in lieu thereof, and any adjournments,
postponements, reschedulings or continuations thereof (the "Annual Meeting"),
(ii) being named as a nominee in any proxy statement filed by Lion Fund in
connection with the solicitation of proxies or written consents for election of
the undersigned at the Annual Meeting, and (iii) serving as a director of Steak
N Shake if elected at the Annual Meeting.
Very truly yours,
/s/ Sardar Biglari
Sardar Biglari
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CUSIP No. 857873-10-3 13D Page 25 of 29 Pages
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DR. PHILIP L. COOLEY
c/o Trinity University
One Trinity Place
San Antonio, Texas 78212
August 16, 2007
The Steak N Shake Company
36 S. Pennsylvania Street, Suite 500
Indianapolis, Indiana 46204
Attn: Corporate Secretary
Dear Sir:
You are hereby notified that the undersigned consents to (i) being named
as a nominee in the notice provided by The Lion Fund, L.P. ("Lion Fund") of its
intention to nominate the undersigned as a director of The Steak N Shake Company
("Steak N Shake") at the 2008 annual meeting of shareholders, or any other
meeting of shareholders held in lieu thereof, and any adjournments,
postponements, reschedulings or continuations thereof (the "Annual Meeting"),
(ii) being named as a nominee in any proxy statement filed by Lion Fund in
connection with the solicitation of proxies or written consents for election of
the undersigned at the Annual Meeting, and (iii) serving as a director of Steak
N Shake if elected at the Annual Meeting.
Very truly yours,
/s/ Philip L. Cooley
Dr. Philip L. Cooley
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CUSIP No. 857873-10-3 13D Page 26 of 29 Pages
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EXHIBIT B
JOINT FILING AND SOLICITATION AGREEMENT
WHEREAS, the undersigned are shareholders, direct or beneficial, of The
Steak N Shake Company, an Indiana corporation ("Steak N Shake");
WHEREAS, The Lion Fund, L.P., a Delaware limited partnership ("Lion
Fund"), Biglari Capital Corp., a Texas corporation ("BCC"), Western Sizzlin
Corp., a Delaware corporation ("Western Sizzlin"), Sardar Biglari and Dr. Philip
L. Cooley wish to form a group for the purpose of soliciting proxies or written
consents to elect Mr. Biglari and Dr. Cooley or any other person designated by
the undersigned as directors of Steak N Shake and taking all other action
necessary or advisable to achieve the foregoing.
NOW, IT IS AGREED, this 16th day of August 2007 by the parties hereto:
1. In accordance with Rule 13d-1(k)(1)(iii) under the Securities
Exchange Act of 1934, as amended, each of the undersigned (collectively, the
"Group") agrees to the joint filing on behalf of each of them of statements on
Schedule 13D with respect to the securities of Steak N Shake to the extent
required by applicable law. Each member of the Group shall be responsible for
the accuracy and completeness of his/its own disclosure therein, and is not
responsible for the accuracy and completeness of the information concerning the
other members, unless such member knows or has reason to know that such
information is inaccurate.
2. Each of the undersigned agrees to solicit proxies or written
consents to elect Sardar Biglari and Dr. Philip L. Cooley or any other person
designated by the Group as directors of Steak N Shake and to take all other
action necessary or advisable to achieve the foregoing (the "Solicitation").
3. Each of Lion Fund and Western Sizzlin agrees to share equally all
expenses incurred in connection with the Group's activities, including expenses
incurred by any of the parties in the Solicitation. Notwithstanding the
foregoing, Lion Fund and Western Sizzlin shall not be required to reimburse any
party for (i) out-of-pocket expenses incurred by a party in the aggregate in
excess of $250 without Lion Fund's and Western Sizzlin's prior written approval;
(ii) the value of the time of any party; (iii) legal fees incurred without Lion
Fund's and Western Sizzlin's prior written approval; or (iv) the costs of any
counsel, other than Olshan, employed in connection with any pending or
threatened litigation without Lion Fund's and Western Sizzlin's prior written
approval.
4. The relationship of the parties hereto shall be limited to
carrying on the business of the Group in accordance with the terms of this
Agreement. Such relationship shall be construed and deemed to be for the sole
and limited purpose of carrying on such business as described herein. Nothing
herein shall be construed to authorize any party to act as an agent for any
other party, or to create a joint venture or partnership, or to constitute an
indemnification. Nothing herein shall restrict any party's right to purchase or
sell securities of Steak N Shake, as he/it deems appropriate, in his/its sole
discretion, provided that all such sales are made in compliance with all
applicable securities laws.
5. This Agreement may be executed in counterparts, each of which
shall be deemed an original and all of which, taken together, shall constitute
one and the same instrument, which may be sufficiently evidenced by one
counterpart.
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CUSIP No. 857873-10-3 13D Page 27 of 29 Pages
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6. In the event of any dispute arising out of the provisions of this
Agreement, the parties hereto consent and submit to the exclusive jurisdiction
of the Federal and State Courts in the State of New York.
7. Any party hereto may terminate his obligations under this
Agreement at any time on 24 hours' written notice to all other parties, with a
copy by fax to Steven Wolosky at Olshan, Fax No. (212) 451-2222.
8. Each party acknowledges that Olshan shall act as counsel for the
Group, Lion Fund and Western Sizzlin.
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CUSIP No. 857873-10-3 13D Page 28 of 29 Pages
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
THE LION FUND, L.P.
By: Biglari Capital Corp.
General Partner
By: /s/ Sardar Biglari
-------------------------------------
Name: Sardar Biglari
Title: Chief Executive Officer
BIGLARI CAPITAL CORP.
By: /s/ Sardar Biglari
-------------------------------------
Name: Sardar Biglari
Title: Chief Executive Officer
WESTERN SIZZLIN CORP.
By: /s/ Sardar Biglari
-------------------------------------
Name: Sardar Biglari
Title: Chief Executive Officer
SARDAR BIGLARI
By: /s/ Sardar Biglari
-------------------------------------
Name: Sardar Biglari
DR. PHILIP L. COOLEY
By: /s/ Philip L. Cooley
-------------------------------------
Name: Dr. Philip L. Cooley
---------------------- ----------------------
CUSIP No. 857873-10-3 13D Page 29 of 29 Pages
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EXHIBIT C
POWER OF ATTORNEY
Know all by these presents, that the undersigned hereby constitutes and
appoints SARDAR BIGLARI, signing singly, the undersigned's true and lawful
attorney-in-fact to take any and all action in connection with the investment by
The Lion Fund, L.P., the undersigned or any of their affiliates in the
securities of The Steak N Shake Company ("Steak N Shake"), including, without
limitation, relating to the formation of a Group (as defined below) whose
members include The Lion Fund, L.P. and the undersigned, all filings on Schedule
13D (as defined below) to the extent required under applicable law, all filings
on Forms 3, 4 and 5 (as defined below) to the extent required under applicable
law, any solicitation of proxies or written consents in support of the election
of directors of Steak N Shake or other proposal(s) and all other matters
related, directly or indirectly, to Steak N Shake (together, the "Investment").
Such action shall include, but not be limited to:
1. executing for and on behalf of the undersigned all Schedules 13D
("Schedule 13D") required to be filed under Section 13(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and the rules thereunder
in connection with the Investment;
2. executing for and on behalf of the undersigned all Forms 3, 4 and 5
("Forms 3, 4 and 5") required to be filed under Section 16(a) of the Exchange
Act and the rules thereunder in connection with the Investment;
3. executing for and on behalf of the undersigned all Joint Filing and
Solicitation Agreements or similar documents pursuant to which the undersigned
shall agree to be a member of a group, as contemplated by Rule 13d-1(k)
promulgated under the Exchange Act (a "Group"), in connection with the
Investment;
4. performing any and all acts for and on behalf of the undersigned that
may be necessary or desirable to complete and execute any such document,
complete and execute any amendment or amendments thereto, and timely file such
form with the United States Securities and Exchange Commission and any stock
exchange or similar authority; and
5. taking any other action of any type whatsoever in connection with the
Investment which, in the opinion of such attorney-in-fact, may be of benefit to,
in the best interest of, or legally required by, the undersigned, it being
understood that the documents executed by such attorney-in-fact on behalf of the
undersigned pursuant to this Power of Attorney shall be in such form and shall
contain such terms and conditions as such attorney-in-fact may approve in such
attorney-in-fact's discretion.
The undersigned hereby grants to such attorney-in-fact full power and
authority to do and perform any and every act and thing whatsoever requisite,
necessary or proper to be done in the exercise of any of the rights and powers
herein granted, as fully to all intents and purposes as the undersigned might or
could do if personally present, with full power of substitution or revocation,
hereby ratifying and confirming all that such attorney-in-fact, or such
attorney-in-fact's substitute or substitutes, shall lawfully do or cause to be
done by virtue of this Power of Attorney and the rights and powers herein
granted. The undersigned acknowledges that the foregoing attorney-in-fact, in
serving in such capacity at the request of the undersigned, is not assuming any
of the undersigned's responsibilities to comply with Section 13(d), Section 16
or Section 14 of the Exchange Act.
This Power of Attorney shall remain in full force and effect until July
31, 2008 unless earlier revoked by the undersigned in a signed writing delivered
to the foregoing attorney-in-fact.
IN WITNESS WHEREOF, the undersigned has caused this Power of Attorney to
be executed as of this 16th day of August, 2007.
/s/ Philip L. Cooley
--------------------------------------------
Dr. Philip L. Cooley