dfan14a06824004_02222008.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. )
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the Registrant ¨
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x Definitive
Additional Materials
o Soliciting
Material Under Rule 14a-12
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.
BIGLARI
CAPITAL CORP.
WESTERN
SIZZLIN CORP.
WESTERN
ACQUISITIONS L.P.
WESTERN
INVESTMENTS INC.
SARDAR
BIGLARI
PHILIP
L. COOLEY
|
(Name
of Persons(s) Filing Proxy Statement, if Other Than the
Registrant)
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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 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 (the “Company”). Lion Fund and Western Sizzlin have
filed a definitive proxy statement with the SEC with regard to the Annual
Meeting.
Item
1. Letter from Sardar
Biglari to the stockholders of the Company, dated February 21, 2008, to be
mailed to stockholders and posted on 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
February
21, 2008
Dear
Fellow Shareholders:
The
annual meeting of stockholders for The Steak n Shake Company can be a highly
productive turning point for the company’s customers, employees, franchisees,
and shareholders. Your vote is imperative, irrespective of the number
of shares you own. My colleague Philip L. Cooley and I
plan to replace Alan B. Gilman and James Williamson,
Jr. at the annual meeting scheduled for March 7, 2008. We
are seeking your support for the permanent removal of Messrs. Gilman
and Williamson and your endorsement of our plan for the company as laid out in
my January 23, 2008 letter, a copy of which I have enclosed.
The
long-term record — during any period over the last decade — has been dismal for
owners of Steak n Shake stock. Current business prospects are no
better. Over the last several months, we have visited Steak n Shake
restaurants and spoken to current and former employees, franchisees,
shareholders, and other constituents, whose opinions confirm ours that the
company is handicapped by a lack of leadership, lack of execution, and lack of
strategic direction from headquarters. Furthermore, we have found
that Gilman and Williamson, through past and present actions, are a main source
of the company’s myriad problems. We believe that because of the
influential positions they hold on the board and their roles as past CEOs, they
have set the wrong tone at the top. They advocate rules for the
company, which, when these stipulations work against them, they quickly alter
for their own self-interest. Here is an example:
I
disclosed in my January 23rd letter
that it is our objective to replace Gilman and Williamson at the annual meeting
and then seek to call a special meeting to make further changes in board
composition. The following week the board amended the bylaws to
require 80% of the shares outstanding to call a special meeting instead of the
former 25%. This change effectively eliminates a shareholder’s
ability to call a special meeting. To require 80% of the votes cast
by the shareholders to call a meeting when only 50% is needed to replace
directors strips shareholders of a fundamental right they ought to
enjoy. Thus, this ill-advised amendment provides the board with
immunity, not the accountability they should embrace. Their actions
designed to disenfranchise shareholders do not deter us; rather, they reinforce
the presence of the firm’s problems and energize our desire to solve
them.
The
board, led by Gilman and Williamson, wrote you a letter on February 14 with the
headline, “Don’t let short-term investors gain control of your
company.” The board is being less than candid with you. I
have repeatedly said both privately to the current company leaders as well as
publicly to you via my letters that we have invested in Steak n Shake stock for
the long-term.
In
addition, the board’s letter reiterates the falsity that we are seeking to
control the company for our own personal benefit and therefore should pay a
control premium. Nothing could be further from the
truth. This is another erroneous argument designed, in my view, to
distract you from the serious problems confronting Steak n Shake. The
truth is that Steak n Shake will stay in the hands of its shareholders, and we
will remain a significant minority shareholder working for the benefit of all
shareholders. To change the minority or majority of the board’s
composition requires over 50% shareholder approval. Plainly,
shareholders are the only ones who can cast votes on whether or not they prefer current leaders or support a
change in leadership. Most importantly, we would not obtain a return on investment different
from that of any other shareholder. We seek to make money with you,
not off you.
What is
absolutely disingenuous of the board is their writing, “As fellow shareholders,
your Board and management team share your displeasure and have experienced
similar returns on their holdings.” We do not consider their
ownership by way of stock option grants as equal to the investment shareholders
have made by laying out cash. While the incumbent directors may own
stock, they have been net sellers over the past several years, disposing a
considerable amount of their holdings. In contrast, we paid cash for
our stock purchase, have not sold a single share, and own more than the entire
board combined.
The board
may discuss and write about maximizing value, through setting up committees and
hiring costly consultants, but their record clearly shows that all their ideas
espoused over the years have resulted in a significant decline in the company’s
value. Steak n Shake’s stock price has decreased over a three-,
five-, and ten-year period, whereas the S&P Restaurant Index has increased
in the same timeframe. The record speaks for itself.
We are
seeking your vote to replace Gilman and Williamson with the recommendation in my
letter of January 23rd outlining our plan for
the company. Our victory would be the basis on which the remaining
directors are obliged to act to benefit you, the owners of the
company. Once elected, we are hopeful that the remaining directors
will not take action against your wishes because doing so certainly is not in
anyone’s best interests. Otherwise, these directors would risk their
reputation. We are optimistic that we will be able to work with the
reelected directors who place shareholder interests above director
interests. Entrenchment strategies may be defendable under Indiana
law but not under the ethical laws that govern one’s reputation. We
will remain resolute in our pursuit because in order to resuscitate Steak n
Shake, we need to change its corporate culture.
In my
October 1, 2007 letter to you, I wrote, “Our principle is to tell you the facts
that we would want to know if our roles were reversed.” That
assertion encapsulates the code by which we operate, and which we will maintain
when we assume leadership positions. We wish to create a new ethos,
one that cares about shareholder rights and value and treats owners as they
should be — like true partners, both large and small.
Towards
that end, we have arranged for a shareholder gathering on March 6, 2008, the
evening before the annual meeting, at 6:00 pm at the Marriott Indianapolis
Downtown, 350 West Maryland Street, First Floor. This first meeting
will provide you with an opportunity to meet Phil and me and ask about our plans
and about anything else that is on your mind. We hope you can join us
and be there to support our candidacy. If you are going to attend, we
ask that you RSVP by emailing rsvp@enhancesteaknshake.com or calling
800-607-0088.
We look
forward to turning Steak n Shake around so once again it can be a place where
customers love to eat, where employees love to work, and which shareholders love
to own.
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Sincerely,
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/s/
Sardar Biglari
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Sardar
Biglari
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IMPORTANT PROXY
INFO
It
is imperative that you return only the GOLD card. Do not mail the
white proxy sent to you by the company. Remember: Only the last proxy
card you mail counts. If you have returned a white proxy card, you
may revoke that proxy by signing, dating, and returning the enclosed GOLD proxy
card. If you send both proxy cards, your vote may not be counted in
our favor. The best solution is to ignore all white
cards and mail
only the GOLD card. If you have any questions regarding the
process, please contact our proxy solicitors at 800-607-0088 or visit us at
enhancesteaknshake.com.
Shareholder
Meetings
Place: Marriott
Indianapolis Downtown
Address: 350 West
Maryland Street, First Floor
Shareholder
Gathering, March 6, 2008 at 6:00 pm
Shareholder
Annual Meeting, March 7, 2008 at 1:30 pm
To
RSVP for the Shareholder Gathering on March 6, 2008, call (800)
607-0088
or
e-mail rsvp@enhancesteaknshake.com
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