dfan14a06824004_09282007.htm
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14A
(RULE
14a-101)
Information
Required In Proxy Statement
Schedule
14a Information
Proxy
Statement Pursuant To Section 14(a) Of The Securities Exchange Act Of 1934
(Amendment
No. )
Filed by
the
Registrant
o
Filed by a
Party other than the
Registrant
x
Check the
appropriate box:
THE STEAK N SHAKE COMPANY
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(Name of Registrant as Specified in Its Charter)
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THE LION FUND L.P.
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BIGLARI CAPITAL CORP.
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WESTERN SIZZLIN CORP.
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WESTERN ACQUISITIONS L.P.
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WESTERN INVESTMENTS INC.
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SARDAR BIGLARI
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(Name of Persons(s) Filing Proxy Statement, if Other Than the
Registrant)
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Payment of
Filing Fee (Check the appropriate box):
(1) Title of
each class of securities to which transaction applies:
(2) Aggregate
number of securities to which transaction applies:
|
|
(3)
|
Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
|
(4) Proposed
maximum aggregate value of transaction:
(5) Total fee
paid:
(1) Amount
previously paid:
(2) Form,
Schedule or Registration Statement No.:
(3) Filing
Party:
(4) Date
Filed:
The Lion
Fund L.P. (“Lion Fund”) and Western Sizzlin Corp. (“Western
Sizzlin”), together with the other participants named herein, are filing
materials contained in this Schedule 14A with the Securities and Exchange Commission
(“SEC”) in connection with the anticipated solicitation of proxies for the
election of two nominees as directors at the next annual meeting of stockholders (the
“Annual Meeting”) of The Steak N Shake Company. Lion Fund and
Western Sizzlin have not yet filed a proxy statement with the SEC with regard to the
Annual Meeting.
Item 1:
The following materials were posted to http://www.enhancesteaknshake.com:
* * *
*
THE
LION
FUND,
L.P.
9311 SAN PEDRO AVENUE, SUITE 1440
SAN ANTONIO, TEXAS 78216
TELEPHONE (210) 344-3400
FAX (210) 344-3411
SARDAR BIGLARI, CHAIRMAN
October 1, 2007
Dear Fellow Shareholders:
The group I represent, composed of The Lion Fund, L.P. and
Western Sizzlin Corp. together with certain of their affiliates, is one of the largest
stockholders of The Steak n Shake Company. As owners of 7% of the corporation, we naturally
are deeply concerned about its mismanagement by the present board of directors. Under the
current board’s watch, shareholder value has been significantly diminished. Time has
long since passed to add new board members who aspire to create value for all shareholders
— and to do so with a sense of urgency. Our aim was to join the board without the
distraction of a potentially contentious and expensive proxy fight. However, our efforts to
discuss representation with the board have been fruitless. We are therefore appealing to
you the shareholders, the true owners of Steak n Shake, to assert your
dissatisfaction.
In our opinion, the optimal avenue to achieve good
corporate governance and enhance long-term value is to place shareholders with substantial
holdings on the board to ensure the proper coalescence of interests between the board and
shareholders. We own more stock than all the directors and officers of the company combined
and thus justifiably look askance at the troublesome turn Steak n Shake’s top
leadership has persisted in taking. We believe a board of directors should participate in
the future of its company by making considerable financial commitments on the same basis as
other shareholders do, not simply through stock options or other stock grants.
We are disturbed by the present direction of The Steak n
Shake Company as exemplified by its failed vision, failed strategy, failed execution, and
failed board. The amalgam of poor corporate governance, lack of strategic direction, and
deteriorating operating and financial performance has led to dismal shareholder returns. To
illustrate the mismanagement, corporate general and administrative (“G&A”)
costs over the last five years have escalated from approximately $98,000 per company-owned
store to roughly $125,000 per unit. Just returning to past G&A levels — on a per
unit basis — would save the company around $12 million annually. Clearly, the board
has exhibited a lack of discipline about expenses and capital allocation, thereby damaging
shareholder value. Yet G&A overspending is only one symptom of the firm’s myriad
problems that must be confronted and corrected.
Needless to say, we are disenchanted by both the recent and
long-term performance of the company. We are not alone; other shareholders have expressed
to us a similar degree of disappointment. Consequently, we believe that
now is a
critical period for the company, so critical it warrants change of board
leadership.
Towards that end, our group has nominated Dr. Philip L.
Cooley — Lion Fund director and Western Sizzlin’s Vice Chairman — and me
for election to Steak n Shake’s board at the next annual shareholders’ meeting
to be held in 2008. We have chosen a pro-active approach because we see opportunities to
create tremendous value. We are convinced the company has not yet attained its full
potential. But to reach that potential requires forward-looking leadership. Phil and I have
the experience to serve knowledgeably and impartially.
Because we are tenacious by
nature, we would commit ourselves for the long term and would work
tirelessly to ensure that the board explores all paths to
maximize shareholder value.
Over the coming months we will be communicating with you
regarding details of our ideas to improve Steak n Shake. Our recently launched web site,
www.enhancesteaknshake.com, will be the primary channel over which we will impart
information on vital matters. I will also be writing you directly. Our principle is to tell
you the facts that we would want to know if our roles were reversed. We encourage
shareholders to visit our web site regularly and to share their thoughts with us about
Steak n Shake.
We look forward to serving
your best
interests.
Sincerely,
/s/
Sardar Biglari
CERTAIN INFORMATION CONCERNING THE PARTICIPANTS
THIS COMMUNICATION IS NOT A SOLICITATION OF A PROXY WHICH MAY BE DONE ONLY PURSUANT TO A
DEFINITIVE PROXY STATEMENT. STOCKHOLDERS ARE ADVISED TO READ THE PROXY STATEMENT AND OTHER
DOCUMENTS RELATED TO THE SOLICITATION OF PROXIES BY THE LION FUND, L.P. ("LION FUND"),
BIGLARI CAPITAL CORP. ("BCC"), WESTERN SIZZLIN CORP. ("WSC"), WESTERN ACQUISITIONS L.P.
("WAL"), WESTERN INVESTMENTS, INC. ("WII"), SARDAR BIGLARI AND PHILIP L. COOLEY, FROM THE
STOCKHOLDERS OF THE STEAK N SHAKE COMPANY, FOR USE AT ITS NEXT ANNUAL MEETING OF
STOCKHOLDERS WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.
WHEN COMPLETED, A DEFINITIVE PROXY STATEMENT AND A FORM OF PROXY WILL BE MAILED TO
STOCKHOLDERS OF THE STEAK N SHAKE COMPANY AND WILL BE AVAILABLE AT NO CHARGE AT THE
SECURITIES AND EXCHANGE COMMISSION'S WEBSITE AT HTTP://WWW.SEC.GOV. IN ADDITION, COPIES OF
THE PROXY STATEMENT AND OTHER DOCUMENTS WILL BE PROVIDED WITHOUT CHARGE UPON REQUEST.
REQUESTS FOR COPIES SHOULD BE DIRECTED TO OUR PROXY SOLICITOR, MORROW & CO., INC. AT
ITS TOLL-FREE NUMBER (800) 607-0088. THE PARTICIPANTS IN THE PROXY SOLICITATION ARE
ANTICIPATED TO BE LION FUND, BCC, WSC, WAL, WII, SARDAR BIGLARI AND PHILIP L. COOLEY (THE
"PARTICIPANTS"). INFORMATION REGARDING THE PARTICIPANTS, INCLUDING THEIR DIRECT OR INDIRECT
INTERESTS, BY SECURITY HOLDINGS OR OTHERWISE, IS CONTAINED IN THE SCHEDULE 13D FILED BY
THEM WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 17, 2007 WITH RESPECT TO THE
STEAK N SHAKE COMPANY, AS AMENDED. THAT SCHEDULE 13D, AS AMENDED, IS CURRENTLY AVAILABLE AT
NO CHARGE ON THE SECURITIES AND EXCHANGE COMMISSION'S WEBSITE AT HTTP://WWW.SEC.GOV. AS OF
SEPTEMBER 28, 2007, EACH OF THE PARTICIPANTS MAY BE DEEMED TO BENEFICIALLY OWN 2,071,945
SHARES OF COMMON STOCK OF THE STEAK N SHAKE COMPANY, CONSISTING OF THE FOLLOWING: (1)
929,200 SHARES HELD DIRECTLY BY LION FUND AND 20,000 SHARES UNDERLYING AMERICAN-STYLE CALL
OPTIONS HELD DIRECLTY BY LION FUND, (2) 561,100 SHARES UNDERLYING AMERICAN-STYLE CALL
OPTIONS HELD DIRECLTY BY WSC, (3) 555,345 SHARES HELD DIRECTLY BY WAL, (4) 4,300 SHARES
HELD DIRECTLY BY PHILIP L. COOLEY, (5) 2,000 SHARES HELD DIRECTLY BY PHILIP L. COOLEY'S
SPOUSE. EACH OF THE PARTICIPANTS DISCLAIMS BENEFICIAL OWNERSHIP OF SUCH SHARES EXCEPT TO
THE EXTENT OF HIS/ITS PECUNIARY INTEREST THEREIN.
Terms
and Conditions
This
Website http://www.enhancesteaknshake.com (the “Site”), sponsored by The
Lion Fund, L.P., Western Sizzlin Corp., and Western Acquisitions L.P. (together, the
“Sponsor”), is for informational purposes only. You may use the
Site for non-commercial, lawful purposes only. Your access to and use of the
Site is subject to and governed by the Terms and Conditions set forth
below. By accessing and browsing the Site, you accept, without limitation or
qualification, and agree to be bound by, the Terms and Conditions set forth below and
all applicable laws.
Nothing on
this Site is intended to be, nor should it be construed or used as, investment, tax,
legal or financial advice, a recommendation whether or how to vote any proxy or any
other kind of recommendation, an opinion of the appropriateness of any security or
investment, nor intended to be an offer, or the solicitation of any offer, to buy or
sell any security or investment. The Sponsor is not soliciting any action
based upon the Site, is not responsible for any decision by any shareholder and the
Site should not be construed as a solicitation to procure, withhold or revoke any
proxy.
Terms
and Conditions
1. You
should assume that everything you see or read on the Site is material owned or
exclusively represented by the Sponsor and protected by copyright unless otherwise
expressly noted, and may not be used except as provided in these Terms and Conditions
or in the text of the Site without the Sponsor’s written
permission. The Sponsor expressly neither warrants nor represents that your
use of materials displayed on the Site will not infringe rights of third parties not
owned by or affiliated with the Sponsor.
2. While
the Sponsor endeavors to ensure that only accurate and up to date information is on the
Site, the Sponsor makes no warranties or representations as to the accuracy of any of
the posted information. The Sponsor assumes no liability or responsibility
for any errors or omissions in the content of the Site.
3. The
Site is provided “AS IS.” The Sponsor does not make any
representations or warranties, whether express or implied, regarding or relating to the
Site or any associated hardware or software, including the content or operations of
either.
4. YOU
EXPRESSLY ACKNOWLEDGE THAT USE OF THE SITE IS AT YOUR SOLE RISK. NEITHER THE
SPONSOR OR ITS AFFILIATED COMPANIES NOR ANY OF THEIR RESPECTIVE EMPLOYEES, AGENTS,
THIRD PARTY CONTENT PROVIDERS OR LICENSORS (COLLECTIVELY THE “SPONSOR
PARTIES”) WARRANT THAT THE SITE WILL BE UNINTERRUPTED OR ERROR FREE, NOR DO THEY
MAKE ANY WARRANTY AS TO THE RESULTS THAT MAY BE OBTAINED FROM USE OF THE SITE, OR AS TO
THE ACCURACY, RELIABILITY OR CONTENT OF ANY INFORMATION, SERVICE, OR MERCHANDISE
PROVIDED THROUGH THE SITE. THE SITE IS PROVIDED ON AN “AS IS” BASIS WITHOUT
WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO,
WARRANTIES OF TITLE OR IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE, OTHER THAN THOSE WARRANTIES WHICH ARE IMPLIED BY AND INCAPABLE OF
EXCLUSION, RESTRICTION OR MODIFICATION UNDER THE LAWS APPLICABLE TO THIS
AGREEMENT.
THIS
DISCLAIMER OF LIABILITY APPLIES TO ANY DAMAGES OR INJURY CAUSED BY ANY FAILURE OF
PERFORMANCE, ERROR, OMISSION, INTERRUPTION, DELETION, DEFECT, DELAY IN OPERATION OR
TRANSMISSION, COMPUTER VIRUS, COMMUNICATION LINE FAILURE, THEFT OR DESTRUCTION OR
UNAUTHORIZED ACCESS TO, ALTERATION OF, OR USE OF RECORD, WHETHER FOR BREACH OF
CONTRACT, TORTIOUS BEHAVIOR, NEGLIGENCE, OR UNDER ANY OTHER CAUSE OF ACTION. YOU
SPECIFICALLY ACKNOWLEDGE THAT THE SPONSOR IS NOT LIABLE FOR THE DEFAMATORY, OFFENSIVE
OR ILLEGAL CONDUCT OF OTHER USERS OR THIRD-PARTIES AND THAT THE RISK OF INJURY FROM THE
FOREGOING RESTS ENTIRELY WITH YOU.
IN NO
EVENT WILL THE SPONSOR, THE SPONSOR PARTIES, OR ANY PERSON OR ENTITY INVOLVED IN
CREATING, PRODUCING OR DISTRIBUTING THE SITE BE LIABLE FOR ANY INDIRECT, INCIDENTAL,
SPECIAL, CONSEQUENTIAL OR PUNITIVE DAMAGES ARISING OUT OF THE USE OF OR INABILITY TO
USE THE SITE. YOU HEREBY ACKNOWLEDGE THAT THE PROVISIONS OF THIS SECTION
SHALL APPLY TO ALL CONTENT ON THE SITE.
IN
ADDITION TO THE TERMS SET FORTH ABOVE, NEITHER THE SPONSOR NOR THE SPONSOR PARTIES
SHALL BE LIABLE REGARDLESS OF THE CAUSE OR DURATION, FOR ANY ERRORS, INACCURACIES,
OMISSIONS, OR OTHER DEFECTS IN, OR UNTIMELINESS OR UNAUTHENTICITY OF, THE INFORMATION
CONTAINED WITHIN THE SITE, OR FOR ANY DELAY OR INTERRUPTION IN THE TRANSMISSION THEREOF
TO YOU, OR FOR ANY CLAIMS OR LOSSES ARISING THEREFROM OR OCCASIONED THEREBY. NONE OF
THE FOREGOING PARTIES SHALL BE LIABLE FOR ANY THIRD-PARTY CLAIMS OR LOSSES OF ANY
NATURE, INCLUDING, BUT NOT LIMITED TO, LOST PROFITS, PUNITIVE OR CONSEQUENTIAL DAMAGES
AND THE AGGREGATE, TOTAL LIABILITY OF THE SPONSOR PARTIES TO YOU OR ANY END USER FOR
ALL DAMAGES, INJURY, LOSSES AND CAUSES OF ACTION (WHETHER IN CONTRACT, TORT OR
OTHERWISE) ARISING FROM OR RELATING TO THIS AGREEMENT OR THE USE OF OR INABILITY TO USE
THE SITE SHALL BE LIMITED TO PROVEN DIRECT DAMAGES IN AN AMOUNT NOT TO EXCEED ONE
HUNDRED DOLLARS ($100).
SOME
JURISDICTIONS DO NOT ALLOW THE LIMITATION OR EXCLUSION OF CERTAIN LIABILITY OR
WARRANTIES SO SOME OF THE ABOVE LIMITATIONS MAY NOT APPLY TO YOU. In such
jurisdictions, the Sponsor’s liability is limited to the greatest extent
permitted by law. You should check your local laws for any restrictions or limitations
regarding the exclusion of implied warranties.
5. Artwork,
images, names, and likenesses displayed on the Site are either the property of, or used
with permission by, the Sponsor. The reproduction and use of any of these by
you is prohibited unless specific permission is provided on the Site or
otherwise. Any unauthorized use may violate copyright laws, trademark laws,
privacy and publicity laws, and/or communications regulations and statutes.
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6. The
trademarks, service marks, logos, and other indicia, including of the
Sponsor (collectively the “Trademarks”) which appear on the Site
are registered and unregistered trademarks of the Sponsor and
others. Nothing contained on the Site should be construed as granting, by
implication or otherwise, any right, license or title to any of the Trademarks without
the advance written permission of the Sponsor or such third party as may be
appropriate. All rights are expressly reserved and retained by the
Sponsor. Your misuse of any of the Trademarks displayed on the Site, or any
other content on the Site, except as provided in these Terms and Conditions, is
strictly prohibited. You are also advised that the Sponsor considers its
intellectual property to be among its most valuable assets, and will aggressively
enforce its intellectual property rights to the fullest extent of the law.
7. For
your convenience, the Site may contain links to the websites of third parties on which
you may be able to obtain content and/or download software. Except as
otherwise noted, such websites, and such content and software are provided by companies
which are not affiliated with and independent of the Sponsor. The Sponsor
does not endorse or make any representations or warranties concerning such websites,
and may have not reviewed such content or software. As such, the Sponsor
makes no representation as to the accuracy or any other aspect of the information
contained in or on such sites, sources or servers, nor does the Sponsor necessarily
endorse such sites or sources.
8. If
any provision of the Terms and Conditions or any application thereof is held to be
invalid or unenforceable for any reason, that provision shall be deemed severable and
the remainder of the Terms and Conditions and the application of that provision in
other situations shall not be affected.
9. YOU
AGREE TO INDEMNIFY, DEFEND AND HOLD HARMLESS THE SPONSOR FROM AND AGAINST ANY AND ALL
THIRD PARTY CLAIMS, DEMANDS, LIABILITIES, COSTS OR EXPENSES, INCLUDING REASONABLE
ATTORNEYS’ FEES, ARISING FROM OR RELATED TO ANY BREACH BY YOU OF ANY OF THE TERMS
AND CONDITIONS OR APPLICABLE LAW, INCLUDING THOSE REGARDING INTELLECTUAL
PROPERTY.
10. The
Sponsor may at any time revise these Terms and Conditions by updating this
posting. You are bound by any such revisions and should therefore
periodically visit this page to review the then current Terms and Conditions to which
you are bound.
11. The
Sponsor knows that the privacy of your personal information is important to you.
Therefore, the Sponsor has established a Privacy Policy governing the use of this
information, which is located at http://www.enhancesteaknshake.com/privacy.html and is
part of this Agreement.
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12. The
Sponsor owns, protects and enforces copyrights in its own creative material and
respects the copyright properties of others. Materials may be made available
on or via the Site by third parties not within the control of the
Sponsor. It is our policy not to permit materials known by us to be
infringing to remain on the Site. You should notify us promptly if you believe any
materials on the Site infringe a third party copyright. Upon our receipt of a proper
notice of claimed infringement under the Digital Millennium Copyright Act
(“DMCA”), the Sponsor will respond expeditiously to follow the procedures
specified in the DMCA to resolve the claim between the notifying party and the alleged
infringer who provided the content in issue, including, where applicable, removing, or
disabling access to material claimed to be infringing or by removing or disabling
access to links to such material. Pursuant to the DMCA 17 U.S.C. 512(c), the Sponsor
has designated Sardar Biglari, as its agent for notification of claims of copyright
infringement with respect to information residing, at the direction of a user, on the
Site. The contact information is: Sardar Biglari, 9311 San Pedro Avenue, Suite 1440,
San Antonio, Texas 78216, Tel: (210) 344-3400, Email:
info@enhancesteaknshake.com.
Copyright
© 2007 The Lion Fund, L.P. / Western Sizzlin Corp. / Western Acquisitions L.P. All
rights reserved. The Site is the property of The Lion Fund, L.P., Western
Sizzlin Corp. and Western Acquisitions L.P., and is protected by United States and
international copyright, trademark, and other applicable laws. This includes
the content, appearance, and design of the Site, as well as the trademarks, product
names, graphics, logos, service names, slogans, colors, and designs.
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Privacy
Statement
Our
Commitment to Privacy.
The
sponsors of this website, http://www.enahncesteaknshake.com (the “Site”),
are The Lion Fund, L.P., Western Sizzlin Corp. and Western Acquisitions L.P. (together,
the “Sponsor”). We respect and value your privacy. This
statement outlines our privacy policies (the “Privacy Policy”) which is
designed to assist you in understanding how we collect, use and safeguard information
you provide to us or we collect and to assist you in making informed decisions when
using the Site. The core of our Privacy Policy is this: We will not release, sell,
rent, or trade your Personal Information (as defined below) to any third party without
your permission, except when we believe in good faith that the law requires it, or to
protect our own rights and properties.
We want
you to feel safe and comfortable when you use the Site, and we are dedicated to
developing and upholding high standards for protecting your privacy and securing your
Personal Information. You should read and familiarize yourself with this Privacy Policy
and with our Terms and Conditions. When you use the Site, you agree to abide by these
terms.
What
Information Do We Collect?
When you
visit any website you may provide two types of information: personal information you
knowingly choose to disclose that is collected on an individual basis, and website use
information collected on an aggregate basis as you browse the website.
Personal
Information You Choose to Provide.
In order
to allow you to send us any comments you may have or to request printed copies of
documents posted on the Site, we ask you to provide certain personal information
consisting of your name, e-mail address, telephone number, company, mailing address,
whether you are a shareholder of The Steak n Shake Co. and your comments (the
“Personal Information”). We do not share or otherwise disclose
any Personal Information except as otherwise set forth herein. Only the
staff and authorized agents of the Sponsor have access to the Personal
Information. We do not knowingly lease, rent, or sell the Personal
Information we collect. People who affirmatively submit their contact information
through the Site may be contacted by or receive information from us or our authorized
agents. We may also compile and maintain lists of Personal Information
affirmatively provided through the Site.
Although
we will protect your privacy on the Site as described in this Privacy Policy, you
should keep in mind that if you voluntarily disclose Personal Information online, it is
possible that despite our efforts that information may be accessed by others. You can
help guard against this by not giving anyone else access to your personal computer,
such as an employer or family member.
Website
Use Information.
Our Site
does not utilize “cookies”.
Clickstream
Data.
As you use
the Internet, a trail of electronic information is left at each website you visit. This
information, which is sometimes referred to as “clickstream data,” can be
collected and stored by a website’s server. Clickstream data can tell us the type
of computer and browsing software you use and the address of the website from which you
linked to our Site. We may use clickstream data as a form of non-personally
identifiable information to anonymously determine how much time visitors spend on each
page of the Site, how visitors navigate throughout the Site and how we may tailor our
web pages to better meet the needs of visitors. This information will only be used to
improve the Site. Any collection or use of clickstream data will be anonymous and
aggregate.
Do
We Disclose Information to Outside Parties?
We may
provide aggregate information about our users, Site traffic patterns and related Site
information to our affiliates or reputable third parties, but this information will not
include Personal Information, except as otherwise provided in this Privacy
Policy.
What
About Legally Compelled Disclosure of Information?
We may
disclose information when we, in good faith, believe that the law requires it or for
the protection of our legal rights.
What
About Other Websites Linked to Our Site?
We are not
responsible for the practices employed by websites linked to or from our Site nor the
information or content contained therein. Often links to other websites are provided
solely as pointers to information on topics that may be useful to the users of our
Site.
Please
remember that your browsing and interaction on any other website, including websites
which have a link on our Site, is subject to that website’s own rules and
policies. Please read over those rules and policies before
proceeding.
Your
Consent.
By using
the Site you consent to our collection and use of your Personal Information as
described in this Privacy Policy. We reserve the right to make changes to
this Privacy Policy from time to time. Revisions will be posted on this
page. We suggest you check this page occasionally for updates.
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Contacting
Us.
If you
have any questions about this Privacy Policy, the practices of the Site, or your
dealings with the Site, you can contact:
The Lion
Fund, L.P.
9311 San
Pedro Avenue, Suite 1440
San
Antonio, Texas 78216
Tel: (210)
344-3400
Email:
info@enhancesteaknshake.com
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CERTAIN
INFORMATION CONCERNING THE PARTICIPANTS
THIS
COMMUNICATION IS NOT A SOLICITATION OF A PROXY WHICH MAY BE DONE ONLY PURSUANT TO A
DEFINITIVE PROXY STATEMENT. STOCKHOLDERS ARE ADVISED TO READ THE PROXY STATEMENT AND
OTHER DOCUMENTS RELATED TO THE SOLICITATION OF PROXIES BY THE LION FUND, L.P. ("LION
FUND"), BIGLARI CAPITAL CORP. ("BCC"), WESTERN SIZZLIN CORP. ("WSC"), WESTERN
ACQUISITIONS L.P. ("WAL"), WESTERN INVESTMENTS, INC. ("WII"), SARDAR BIGLARI AND PHILIP
L. COOLEY, FROM THE STOCKHOLDERS OF THE STEAK N SHAKE COMPANY, FOR USE AT ITS NEXT
ANNUAL MEETING OF STOCKHOLDERS WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION. WHEN COMPLETED, A DEFINITIVE PROXY STATEMENT AND A FORM OF PROXY
WILL BE MAILED TO STOCKHOLDERS OF THE STEAK N SHAKE COMPANY AND WILL BE AVAILABLE AT NO
CHARGE AT THE SECURITIES AND EXCHANGE COMMISSION'S WEBSITE AT HTTP://WWW.SEC.GOV. IN
ADDITION, COPIES OF THE PROXY STATEMENT AND OTHER DOCUMENTS WILL BE PROVIDED WITHOUT
CHARGE UPON REQUEST. REQUESTS FOR COPIES SHOULD BE DIRECTED TO OUR PROXY SOLICITOR,
MORROW & CO., INC. AT ITS TOLL-FREE NUMBER (800) 607-0088. THE PARTICIPANTS IN THE
PROXY SOLICITATION ARE ANTICIPATED TO BE LION FUND, BCC, WSC, WAL, WII, SARDAR BIGLARI
AND PHILIP L. COOLEY (THE "PARTICIPANTS"). INFORMATION REGARDING THE PARTICIPANTS,
INCLUDING THEIR DIRECT OR INDIRECT INTERESTS, BY SECURITY HOLDINGS OR OTHERWISE, IS
CONTAINED IN THE SCHEDULE 13D FILED BY THEM WITH THE SECURITIES AND EXCHANGE COMMISSION
ON AUGUST 17, 2007 WITH RESPECT TO THE STEAK N SHAKE COMPANY, AS AMENDED. THAT SCHEDULE
13D, AS AMENDED, IS CURRENTLY AVAILABLE AT NO CHARGE ON THE SECURITIES AND EXCHANGE
COMMISSION'S WEBSITE AT HTTP://WWW.SEC.GOV. AS OF SEPTEMBER 28, 2007, EACH OF THE
PARTICIPANTS MAY BE DEEMED TO BENEFICIALLY OWN 2,071,945 SHARES OF COMMON STOCK OF THE
STEAK N SHAKE COMPANY, CONSISTING OF THE FOLLOWING: (1) 929,200 SHARES HELD DIRECTLY BY
LION FUND AND 20,000 SHARES UNDERLYING AMERICAN-STYLE CALL OPTIONS HELD DIRECLTY BY
LION FUND, (2) 561,100 SHARES UNDERLYING AMERICAN-STYLE CALL OPTIONS HELD DIRECLTY
BY WSC, (3) 555,345 SHARES HELD DIRECTLY BY WAL, (4) 4,300 SHARES HELD DIRECTLY
BY PHILIP L. COOLEY, (5) 2,000 SHARES HELD DIRECTLY BY PHILIP L. COOLEY'S SPOUSE.
EACH OF THE PARTICIPANTS DISCLAIMS BENEFICIAL OWNERSHIP OF SUCH SHARES EXCEPT TO THE
EXTENT OF HIS/ITS PECUNIARY INTEREST THEREIN.
