Biglari will accept seat on Steak n Shake board if bylaws changed

By Lisa Kerner

Charlotte, N.C., Feb. 4 - Investor Sardar Biglari agreed to accept two seats on the Steak n Shake Co.'s board of directors if the board restores the shareholders' ability to call a special meeting when votes from holders of 25%, instead of 80%, of the shares outstanding are cast.

Biglari is chairman and chief executive officer of Western Sizzlin Corp. and the Lion Fund, LP.

The bylaw amendment passed by the board to increase the percentage of shares needed effectively "eliminates a fundamental shareholder right to call a special meeting," Biglari said in a Feb. 4 letter to Dr. John W. Ryan, chairman of the nominating/governance committee. The letter was included in a schedule 13D filing with the Securities and Exchange Commission.

"This revision provides the board immunity, not accountability, and reveals a culture to which we cannot subscribe," Biglari added.

In addition, Biglari wants Steak n Shake's board to adopt an additional provision that future revisions to this particular bylaw require shareholder approval.

"Needless to say, as a byproduct of limitations on shareholder rights and privileges, the costs of a proxy fight and potential litigation pale in comparison to a decrease in the value of everyone's shares. Curtailing an owner's power is exactly the kind of behavior we do not approve of," the letter stated.

On Jan. 23, Biglari outlined his plans to create value in an open letter to fellow Steak n Shake shareholders.

It was previously reported that as part of the plan, Biglari would obtain two board seats and then call a special meeting to vote on replacing most of the board.

The investor also disagreed with chairman and chief executive officer Alan Gilman's plan to open nine new restaurants at a cost of up to $22.5 million.

Biglari would like to replace Gilman and former CEO and current lead director James Williamson.

Western Sizzlin and its affiliates reported owning 2,423,945 shares, or 8.5%, of the Indianapolis-based casual dining restaurant franchisor.

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