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 / /
Filed by a Party other than the Registrant /X/
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/X/ Soliciting Material Under Rule 14a-12
THE STEAK N SHAKE COMPANY
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(Name of Registrant as Specified in Its Charter)
THE LION FUND L.P.
BIGLARI CAPITAL CORP.
WESTERN SIZZLIN CORP.
WESTERN ACQUISITIONS L.P.
WESTERN INVESTMENTS INC.
SARDAR BIGLARI
PHILIP L. COOLEY
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(Name of Persons(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / Fee paid previously with preliminary materials:
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/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(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 press release was issued and posted to
HTTP://WWW.ENHANCESTEAKNSHAKE.COM and HTTP://WWW.WESTERN-SIZZLIN.COM:
* * * *
FOR IMMEDIATE RELEASE
SARDAR BIGLARI ISSUES LETTER TO SHAREHOLDERS OF THE
STEAK N SHAKE COMPANY
SAN ANTONIO, TX. (OCTOBER 1, 2007) -- Sardar Biglari, Chairman and CEO of
Western Sizzlin Corporation (OTC Bulletin Board: WSZL) and The Lion Fund, L.P.,
issued the following letter today to the shareholders of The Steak n Shake
Company (NYSE: SNS) concurrent with the launch of WWW.ENHANCESTEAKNSHAKE.COM:
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
Sardar Biglari
************
Western Sizzlin Corp., The Lion Fund, L.P., Biglari Capital Corp., Western
Acquisitions, LP, Western Investments Inc., Sardar Biglari, and Philip L. Cooley
as a group are owners of 7% of the outstanding common stock of The Steak n Shake
Company. The group has nominated Mr. Biglari and Dr. Philip L. Cooley -- a
director of The Lion Fund and Vice Chairman of Western Sizzlin -- for election
to Steak n Shake's board at the next annual meeting of shareholders to be held
in 2008.
Western Sizzlin Corp. is a holding company which owns a number of subsidiaries.
Its most important business activity is conducted through Western Sizzlin
Franchise Corp., a steak and buffet restaurant chain franchising and operating
approximately 125 units. Common stock of the company is listed on OTC Bulletin
Board trading symbol WSZL.
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.
Contact:
Thomas Ball or Ronald Knox
Morrow & Co., Inc.
(203) 658-9400
Or
Robyn B. Mabe, Chief Financial Officer
Western Sizzlin Corp.
(540) 345-3195
Lion Fund
Filed: 1 Oct 07, 12:00am