| 1. | Grant                of                Options.  The Company hereby grants to the Grantee the                right and option to purchase, on the terms and conditions hereinafter                set                forth, all or any part of an aggregate of                               shares (hereinafter called "Subject Shares") of the presently                authorized, but unissued, or treasury Common Stock of the Company                at a                purchase price of  $7.48 per share, exercisable in whole or in                part from time to time subject to the limitation that no option may                be                exercised with respect to fewer than one hundred (100) shares unless                there                are fewer than one hundred (100) shares then subject to purchase                hereunder, in which event any exercise must be as to all such shares                and                subject to the further limitation that the options represented by                this                Agreement shall be exercisable only at such times and in such amounts                as                are set forth on Schedule I, attached hereto and made a part                hereof.  The option shall expire as to all Subject Shares on the                tenth anniversary date of this Agreement if not exercised on or before                such date. |
|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2. | Regulatory                Compliance.  This option may not be exercised until all                applicable federal and state securities requirements pertaining to                the                offer and sale of the securities issued pursuant to the Plan have                been met                and the Company has been advised by counsel that all applicable                requirements have been met. |
|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3. | Exercise                of                Options.  Subject to the limitation specified in Section                2 and Schedule I hereof, the Grantee may from time to time exercise                this                option by delivering a written notice of exercise and subscription                agreement to the Secretary of the Company specifying the number of                whole                shares to be purchased, accompanied by payment in cash, by certified                check, or bank cashier's check, of the aggregate option price of                such                number of shares; provided, however, that the Grantee may make payment                in                the form of delivery to the Company of Common Stock of the Company                owned                by the Grantee, the fair market value of which equals the aggregate                option                price, or by payment partially in cash and partially in Common Stock                of                the aggregate option price.  For this purpose, any shares so                tendered by the Grantee shall be deemed to have a fair market value                equal                to the closing sales price for the shares on the New York Stock Exchange                on the last trading day prior to the exercise.  Only the Grantee                may exercise the option during the lifetime of the Grantee.  No                fractional shares may be purchased at any time hereunder. |
|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4. | Termination                of                Employment.  If the Grantee ceases to be an employee of                the Company or any of its subsidiaries for any reason other than                retirement, disability, or death, this option shall forthwith terminate. |
|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| a. | If                the Grantee's employment by the Company or any of its subsidiaries                is                terminated by reason of retirement (which means such termination                of                employment as shall entitle the Grantee to benefits under the Company's                401k Plan or any successor plan of the Company), the Grantee may                exercise                any option granted hereunder (whether vested or not under the terms                hereof) in whole or in part at any time within three months after                such                retirement, but not later than the date upon which this option would                otherwise expire. |
|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| b. | If                the Grantee ceases to be an employee of the Company or any of its                subsidiaries because of death or disability, the Grantee (or his/her                estate) may exercise any option granted hereunder (whether vested                or not                under the terms hereof) in whole or in part at any time within one                year                after such termination of employment by reason of such disability,                but not                later than the date upon which this option would otherwise expire. |
|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| c. | If                Grantee is terminated without cause (as that term is defined in the                Plan)                within on e year of a Change in Control (as that term is defined                in the                Plan) then the Grantee may exercise any options granted hereunder                which                were vested at the date of termination within one year of the termination,                although in no event after the options would otherwise expire. |
|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5. | Incentive                Stock                Options.  This Stock Option Agreement is intended to                grant an option which meets the requirements of stock options as                defined                in Section 422A of the Internal Revenue Code.  Subject to and                upon the terms, conditions and provisions of the Plan, each and every                provision of this Stock Option Agreement shall be administered, construed                and interpreted so that the option granted herein shall qualify as                an                incentive stock option. |
|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 6. | Effect                of Change of                Control.  If a tender offer or exchange offer for Shares                (other than such an offer by the Company) is commenced, or if a Change                in                Control (as defined in the Plan) occurs, awards hereunder that are                not                fully exercisable will become exercisable in full upon the happening                of                such event and will remain exercisable in accordance with their terms;                provided, however, that no Options which have previously been exercised                or                otherwise terminated will become exercisable. |
|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 7. | Delivery                of                Certificates.  Upon the effective exercise of the option,                or any part thereof, certificates representing the shares so purchased,                marked fully paid and non-assessable shall be delivered to the person                who                exercised the option as soon as the Company is reasonably able to                do so.                Until certificates representing such shares shall have been issued                and                delivered, the Grantee shall not have any of the rights or privileges                of a                shareholder of the Company in respect of any of such shares. |
|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 8. | Stock                Splits or                Dividends.  In the event that prior to the delivery by                the Company of all the Subject Shares, there shall be an increase                or                reduction in the number of shares of Common Stock of the Company                issued                and outstanding by reason of any subdivision or consolidation of                the                Common Stock or any other capital adjustment, the number of shares                then                subject to this option shall be increased or decreased as provided                in the                Plan. |
|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 9. | No                Assignment.  The option and the rights and privileges                conferred by this Option Agreement shall not be assigned or transferred                by                the Grantee in any manner except by will or under the laws of descent                and                distribution.  In the event of any attempted assignment or                transfer in violation of this paragraph, the option, rights and privileges                conferred by this Stock Option Agreement shall become null and void. |
|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 10. | Employment                at                Will.  Nothing herein contained shall be deemed to create                any limitation or restriction upon such                rights as the Company would otherwise have to terminate a person                as an                employee of the Company |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 11. | Notices.  Any                notices to be given or served under the terms of this Option Agreement                shall be addressed to the Secretary of the Company at 36 South                Pennsylvania Street, Indianapolis, Indiana, 46204, and to the Grantee                at                the address on file with the Company from time to time, or such other                address or addresses as either party may hereafter designate in writing                to                the other.  Any such notice shall be deemed to have been duly                given or served, if and when enclosed in a properly sealed envelope                addressed as aforesaid, postage prepaid, and deposited in the United                States mail or set via reputable overnight carrier. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 12. | Interpretation                of                Agreement and Plan.  The interpretation by the Board of                Directors’ Compensation Committee of any provisions of the Plan or of this                Stock Option Agreement shall be final and binding on the Grantee                unless                otherwise determined by the Company's Board of Directors. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 13. | Controlling                Document.  This option is subject to all the terms,                provisions and conditions of the Plan, which is incorporated herein                by                reference and to such regulations as may from time to time be adopted                by                the Committee. A copy of the Plan is available for free on the Company’s                web site, www.steaknshake.com                in the Company’s 2008 Proxy Statement.  In the event of any                conflict between the provisions of the Plan and the provisions of                this                Stock Option Agreement, the terms, conditions and provisions of the                Plan                shall control, and this Stock Option Agreement shall be deemed to                be                modified accordingly. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 14. | Governing                Law.  This Stock Option Agreement shall be governed by                the laws of the State of Indiana.  Any suit filed regarding this                Agreement shall be venued only in the Federal District Court for                the                Southern District of Indiana, Indianapolis, Indiana. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----