VOTING AGREEMENT
Exhibit
1
This
VOTING AGREEMENT ("Agreement") is made
and entered into as of October 22, 2009, by and among The
Steak n Shake Company, an Indiana corporation ("SNS"), and the
undersigned securityholder (the "Securityholder") of
Western Sizzlin Corporation, a Delaware corporation (the "Company"). All
capitalized terms herein not otherwise defined shall have the meaning ascribed
to them in the Merger Agreement (as defined below).
RECITALS
WHEREAS, pursuant to an
Agreement and Plan of Merger dated of even date herewith (the "Merger Agreement"),
by and among SNS, Grill Acquisition Corporation, a Delaware corporation ("Merger Sub"), and the
Company, Merger Sub will merge with and into the Company such that the Company
will continue as the surviving corporation and become a wholly-owned subsidiary
of SNS, as more fully described in the Merger Agreement (the "Transaction");
WHEREAS, the Securityholder is
the beneficial owner of, or exercises control and direction over, the number of
issued and outstanding shares of Common Stock of the Company as set forth on the
signature page hereof (the "Shares");
and
WHEREAS, as a material
inducement for SNS to enter into the Merger Agreement, the Securityholder is
willing to (i) in accordance with the terms hereof, not transfer or otherwise
dispose of any of such Securityholder's Shares or New Shares (as defined below),
or any and all other shares or securities of the Company issued, issuable,
exchanged or exchangeable, in respect of any Shares or New Shares (the "Securities"), and
(ii) vote such Securityholder's Securities as set forth herein;
NOW, THEREFORE, in
contemplation of the foregoing and in consideration of the mutual agreements,
covenants, representations and warranties contained herein and intending to be
legally bound hereby, the parties agree as follows:
1. Agreement
to Retain Shares.
1.1. Transfer and Encumbrance. The
Securityholder agrees that it will not take or permit any action to, directly or
indirectly, (i) transfer, sell, assign, give, pledge, exchange, or otherwise
dispose of or encumber the Securities (except as may be specifically required by
court order, in which case the Securityholder shall give SNS prior written
notice and any such transferee shall agree to be bound by the terms and
conditions of this Agreement) prior to the Expiration Date (as defined below),
or to make any offer or agreement relating thereto, at any time prior to the
Expiration Date; (ii) deposit any of the Securities into a voting trust or enter
into a voting agreement or arrangement with respect to such Securities or grant
any proxy or power of attorney with respect thereto, in each case, in a manner
that conflicts or may conflict with the Securityholder's obligations hereunder;
or (iii) enter into any contract, option or other arrangement or undertaking
with respect to the direct or indirect sale, assignment, transfer, exchange or
other disposition of or transfer of any interest in or the voting of any of the
Securities, in each case, in a manner that conflicts or may conflict with the
Securityholder's obligations hereunder. As used herein, the term
"Expiration
Date" shall mean the earlier to occur of (i) the Termination Date (as
such term is defined in the Merger Agreement), and (ii) the date on which the
Merger Agreement is terminated in accordance with its terms (including any
extensions to the Merger Agreement, as provided for therein).
1.2. New Shares. The
Securityholder agrees that any shares of the capital stock or securities of the
Company that the Securityholder purchases or with respect to which the
Securityholder otherwise acquires beneficial ownership after the date of this
Agreement and prior to the Expiration Date (the "New Shares"), and any
and all other shares or securities of the Company issued, issuable, exchanged or
exchangeable in respect of any New Shares, shall be subject to the terms and
conditions of this Agreement to the same extent as if they constituted
Shares.
2. Agreement
to Vote. Prior to the Expiration Date, at every meeting of the
stockholders of the Company called with respect to any of the following, and at
every adjournment thereof, and on every action or approval by written consent of
the stockholders of the Company with respect to any of the following, the
Securityholder agrees to vote the Securities, and, to the full extent legally
permitted, cause holders of record of the Securities to vote (and to provide
evidence thereof within ten (10) days prior to the meeting): (i) in favor of
approval of the Transaction, the Merger Agreement and the transactions
contemplated thereby and any matter that could reasonably be expected to
facilitate the Transaction; (ii) in favor of any alternative structure as may be
agreed upon by SNS and the Company to effect the Transaction; provided that such
alternative structure is on terms in the aggregate no less favorable to the
Securityholder than the terms of the Transaction set forth in the Merger
Agreement (including, without limitation, with respect to the consideration to
be received by the Securityholder); and (iii) against the consummation of any
Superior Proposal or any action, proposal, agreement or transaction (other than
the Transaction, the Merger Agreement or the transactions contemplated thereby)
that in any such case would result in a breach of any covenant, representation
or warranty or any other obligation or agreement of the Company under the Merger
Agreement, which could reasonably result in any of the conditions to the
Company's obligations under the Merger Agreement not being fulfilled or which
would be inconsistent with the Transaction or any other transaction contemplated
by the Merger Agreement. Prior to the Expiration Date, the Securityholder will
not enter into any agreement or understanding with any Person to vote or give
instructions in any manner inconsistent with this Section 2. In
addition, prior to the Expiration Date, the Securityholder agrees not to enter
into any agreement, discussions or negotiations with any Person other than SNS
or any of its affiliates with respect to an Acquisition Proposal or a potential
Acquisition Proposal. This Agreement is intended to bind the Securityholder as a
stockholder of the Company only with respect to the specific matters set forth
herein.
Notwithstanding
the foregoing, nothing in this Agreement shall limit or restrict the
Securityholder from voting in his, her or its sole discretion on any matter
other than those matters referred to in this Agreement.
3. No
Opposition. Prior to the Expiration Date, the Securityholder agrees not
to take, or cause to be taken, any action in its capacity as a stockholder of
the Company that would prevent the consummation of the Transaction and the
transactions contemplated by the Merger Agreement. Prior to the Expiration Date,
the Securityholder agrees to take, or cause to be taken in its capacity as a
stockholder of the Company, all actions necessary to effect the Transaction and
the transactions contemplated by the Merger Agreement.
4. Representations,
Warranties and Covenants of Securityholder. The Securityholder hereby
represents and warrants to, and covenants with, SNS that:
4.1. Ownership. The Securityholder
has good and marketable title to, and is the sole legal and beneficial owner of
the Shares, in each case free and clear of all Liens. As of the date hereof, the
Securityholder does not beneficially own any shares or securities of the capital
stock of the Company other than such Securityholder's Shares or shares issuable
upon exercise of outstanding options awarded under the Company's stock incentive
plans.
4.2. Authorization; Binding
Agreement. The Securityholder has all requisite power and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby and thereby and has sole voting power and sole power of
disposition, with respect to all of the Shares with no restrictions on its
voting rights or rights of disposition pertaining thereto. The Securityholder
has duly executed and delivered this Agreement and, assuming its due
authorization, execution and delivery by SNS, this Agreement is a legal, valid
and binding agreement of the Securityholder, enforceable against the
Securityholder in accordance with its terms.
4.3. No Violation. Neither the
execution, delivery and performance of this Agreement nor the consummation of
the transactions contemplated hereby and thereby will (i) require the
Securityholder to file or register with, or obtain any material permit,
authorization, consent or approval of, any Governmental Authority; (ii) violate,
or cause a breach of or default (or an event which with notice or the lapse of
time or both would become a default) under, any contract, agreement or
understanding, any Law or any arbitration award binding upon the Securityholder;
or (iii) cause the acceleration of any obligation under or give to others any
right of termination, amendment, acceleration or cancellation of, or result in
the creation of a Lien on any property or asset of the Securityholder pursuant
to any provision of any indenture, mortgage, lien, lease, agreement, contract,
instrument, order, judgment, ordinance, regulation or decree to which the
Securityholder is subject or by which the Securityholder or any of the
Securityholder's properties or assets are bound. No proceedings are pending
which, if adversely determined, will have a material adverse effect on any
ability to vote or dispose of any of the Shares. The Securityholder has not
previously assigned or sold any of the Shares to any third party.
4.4. Regulatory Approvals. The
Securityholder agrees that, so long as the Securityholder is required to vote
the Securities in favor of the Transaction, the Securityholder shall, at SNS's
or the Company's cost, cooperate with all reasonable requests by SNS in
obtaining all governmental and regulatory approvals required to permit SNS to
complete the Transaction as contemplated in the Merger Agreement.
4.5. Public Disclosure. The
Securityholder agrees not to make any public disclosure or announcement of or
pertaining to this Agreement, the Transaction, the Merger Agreement or the
transactions contemplated thereby nor to disclose that any discussions or
negotiations are taking place in connection therewith without the prior written
consent of SNS, except as required by Law or stock exchange rule.
5. Further
Assurances. The Securityholder hereby covenants and agrees to execute and
deliver, or cause to be executed or delivered, such proxies, consents, waivers
and other instruments, and undertake any and all further action, necessary or
desirable, in the reasonable opinion of SNS, to carry out the purpose and intent
of this Agreement and to consummate the Transaction, the Merger Agreement and
the transactions contemplated thereby.
6. Termination.
This Agreement shall terminate and shall have no further force or effect as of
the Expiration Date; provided, however, that nothing
herein shall relieve any party from liability hereof for breaches of this
Agreement prior to the Expiration Date.
7. Miscellaneous.
7.1. Severability. If any term,
provision, covenant or restriction of this Agreement is held by a court of
competent jurisdiction to be invalid, void or unenforceable, then the remainder
of the terms, provisions, covenants and restrictions of this Agreement shall
remain in full force and effect and shall in no way be affected, impaired or
invalidated. The terms and provisions of this Agreement shall not be construed
against the drafter or drafters hereof. All parties hereto agree that the
language of this Agreement shall be construed as a whole according to its fair
meaning and not strictly for or against any of the parties hereto.
7.2. Binding Effect and
Assignment. This Agreement and all of the provisions hereof shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns, but, except as otherwise specifically provided
herein, neither this Agreement nor any of the rights, interests or obligations
of the parties hereto may be assigned by either of the parties without the prior
written consent of the other; provided, however, that SNS may
freely assign its rights to a direct or indirect wholly-owned subsidiary of SNS
without such prior written approval but no such assignment shall relieve SNS of
any of its obligations hereunder. Any purported assignment without such consent
shall be void.
7.3. Amendment and Modification.
This Agreement may not be modified, amended, altered or supplemented except by
the execution and delivery of a written agreement executed by the parties
hereto.
7.4. Specific Performance; Injunctive
Relief. The parties hereto acknowledge that SNS will be irreparably
harmed and that there will be no adequate remedy at law for a violation of any
of the covenants or agreements of the Securityholder set forth herein.
Therefore, it is agreed that, in addition to any other remedies that may be
available to SNS upon such violation, SNS shall have the right to enforce such
covenants and agreements by specific performance, injunctive relief or by any
other means available to SNS at law or in equity.
7.5. Notices. All notices that are
required or may be given pursuant to the terms of this Agreement shall be in
writing and shall be sufficient in all respects if given in writing and
delivered by hand, national or international overnight courier service,
transmitted by telecopy or mailed by registered or certified mail, postage
prepaid (effective when delivered by hand or telecopy, one (1) day after
dispatch by overnight courier, and three (3) business days after dispatch by
mail), as follows:
(a) if
to SNS, to:
Xxxxxxx
X. Xxxxx, Xx.
Chair,
Special Committee of the Board of Directors
of The
Steak n Shake Company
0000
Xxxxxxx Xxxxx Xxxxx
Xxxx Xxxx
Xxxxx, XX 00000
Facsimile
No.: (000)
000-0000
with a
copy to:
Ice
Xxxxxx LLP
Xxx
Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxxxx,
XX 00000-0000
Attention:
Xxxx Xxxxxx
Facsimile
No.: (000)
000-0000
and/or
Xxxxxxx
Xxxxx
Facsimile
No.: (000)
000-0000
(b) if
to the Securityholder, to the address set forth beneath such Securityholder's
signature below.
7.6. Governing Law. This Agreement
shall be governed by, construed and enforced in accordance with the internal
laws of the State of Delaware without giving effect to any choice or conflict of
law provision, rule or principle (whether of the State of Delaware or any other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of Delaware.
7.7. Entire Agreement. This
Agreement contains the entire understanding of SNS and Securityholder in respect
of the subject matter hereof, and supersede all prior negotiations and
understandings between the parties with respect to such subject
matters.
7.8. Counterparts. This Agreement
may be executed in several counterparts, each of which shall be an original, but
all of which together shall constitute one and the same agreement.
7.9. Effect of Headings. The
section headings herein are for convenience only and shall not affect the
construction or interpretation of this Agreement.
7.10. Jurisdiction. The parties to
this Agreement agree that any suit, action or proceeding arising out of, or with
respect to, this Agreement, or any judgment entered by any court in respect
thereof shall be brought in the courts of Indiana or the applicable U.S.
District Court in Indiana as the commencing party may elect, and the
Securityholder hereby accepts the exclusive jurisdiction of those courts for the
purpose of any suit, action or proceeding. In addition, the Securityholder
hereby irrevocably waives, to the fullest extent permitted by law, any objection
which the Securityholder may now or hereafter have to the laying of venue of any
suit, action or proceeding arising out of or relating to this Agreement or any
judgment entered by any court in respect thereof brought in Indiana or the
applicable U.S. District Court in Indiana, as selected by the commencing party,
and hereby further irrevocably waives any claim that any suit, action or
proceedings brought Indiana or in such District Court has been brought in an
inconvenient forum.
7.11. No Limitation on Actions of the
Securityholder as Director. Notwithstanding anything to the contrary in
this Agreement, in the event the Securityholder, or a representative of the
Securityholder, is an officer or director of the Company, nothing in this
Agreement is intended or shall be construed to require the Securityholder, or
its representative, as the case may be, in such individual's capacity as an
officer or director of the Company, to act or fail to act in accordance with
such individual's fiduciary duties in such capacity.
7.12. Remedies Not Exclusive. All
rights, powers and remedies provided under this Agreement or otherwise available
in respect hereof at law or in equity will be cumulative and not alternative,
and the exercise of any thereof by either party will not preclude the
simultaneous or later exercise of any other such right, power or remedy by such
party.
7.13. Waiver of Jury Trial. EACH
PARTY HERETO IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OT OF OR RELATED TO THIS AGREEMENT, ANY PROXY OR THE
TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY.
7.14. Disclosure. The
Securityholder hereby authorizes SNS to publish or disclose in any SNS reports
required to be filed under the Exchange Act or the Securities Act, including,
without limitation, any report on Form 8-K or any Schedule 13D, if applicable,
and any other applicable Laws, its identity and the nature of its commitments,
arrangements and understandings under this Agreement.
[Signature
Page Follows]
IN
WITNESS WHEREOF, the parties have caused this Voting Agreement to be duly
executed on the day and year first above written.
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THE
STEAK N SHAKE COMPANY
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By:
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/s/
Xxxxxxx X. Xxxxx
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Printed:
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Xxxxxxx
X. Xxxxx
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Title:
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Ch.
SNS Special Committee
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SECURITYHOLDER
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THE
LION FUND, L.P.
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By:
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/s/
Xxxxxx Xxxxxxx
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Print
Name:
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Xxxxxx
Xxxxxxx
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Title:
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Chairman
& CEO
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Shares
beneficially owned:
_______
shares of Common Stock
[SIGNATURE
PAGE TO VOTING AGREEMENT]
