exhibit10_34.htm


    EXHIBIT
      10.34 

    


    


    THE
      STEAK N SHAKE COMPANY AMENDED AND RESTATED

    1997
      CAPITAL APPRECIATION PLAN

    


    
      	
              1.  

            	
              
                Purpose.

              

            


    

    


    The
      purpose of the Amended and Restated 1997 Capital Appreciation Plan (the “Plan”)
      is to foster and enhance the long-term profitability of The Steak n Shake
      Company (the “Company”) for the benefit of its shareholders by offering the
      incentive of long-term rewards to those corporate officers and key executives
      who have principal responsibility for long-term profitability.

    


    
      	
              2.  

            	
              Eligibility.

            


    

    


    Eligibility
      for grants under the Plan shall be limited to those key executive employees,
      whether or not such employees are officers or directors of the Company, or
      its
      subsidiaries, recommended by the Compensation Committee and selected by the
      Board of Directors from among those who are in a position to contribute
      materially to the success of the Company and who have significant opportunities
      to influence long-term profit performance.  Subject to such selection,
      these would normally include key employees in executive, administrative,
      professional, operating and technical positions.  The Board of
      Directors may, in its discretion, also make an award to any other employee
      who
      has made an unusual contribution outside the ordinary course of their
      duties.

    


    
      	
              3.  

            	
              Restricted
                Stock Grants.

            


    

    


    
      	
              (a)  

            	
              The
                Board of Directors may grant shares of the Common Stock of the Company
                which are subject to restrictions (“Restricted Shares”) to participating
                employees (“Participants”) pursuant to the Plan over a period ending
                December 31, 2007.  The number of Restricted Shares, if any,
                granted hereunder to Participants shall be within the discretion
                of the
                Board of Directors; provided, however, that the number of Restricted
                Shares which may be granted after November 11, 2003 shall not exceed
                an
                aggregate of 514,122 shares except as may be adjusted pursuant to
                Section
                5 below.  Restricted Shares which are forfeited or canceled
                under 3(d) or (e) hereof shall be available for further
                grants.  In making grants, the Board of Directors shall take
                into account such factors as the Participant’s level of responsibility,
                previous performance, rate of compensation and the potential value
                of the
                grant.

            


    

    
      	
              (b)  

            	
              Grants
                made by the Board of Directors may consist in whole or in part of
                authorized but unissued or treasury shares, and shall be subject
                to the
                provisions of the Plan and to such other terms and conditions, not
                inconsistent with the Plan, as the Board of Directors
                determine.

            


    

    
      	
              (c)  

            	
              Subject
                to the provisions contained in 3(d) and (e) hereof, the Restricted
                Shares
                granted hereunder shall be conditionally owned by the Participant
                as of
                the grant date, and such Participant shall be entitled to the receipt
                of
                cash dividends and voting rights with respect
                thereto.

            


    

    
      	
              (d)  

            	
              In
                the event of termination of Participant’s employment with the Company for
                any reason other than death, retirement under the normal or disability
                provisions of a retirement plan of the Company, or retirement under
                the
                early retirement provisions of such retirement plan with the consent
                of
                the Company, during a period of three (3) years following the grant
                date,
                subject to adjustment pursuant to paragraph 5 hereof (“Forfeiture
                Period”), the Restricted Shares so granted shall be thereupon forfeited
                by
                Participant and transferred to the Company as of the date of
                termination.  The Restricted Shares granted hereunder may not be
                sold, transferred or pledged by the Participant during the Forfeiture
                Period.

            


    

    
      	
              (e)  

            	
              If
                a Participant’s employment has terminated because of death, or because of
                disability or normal or early retirement under a retirement plan
                of the
                Company as set out in 3(d) above prior to the end of the Forfeiture
                Period, the number of Restricted Shares such Participant or such
                Participant’s beneficiary or estate would be entitled to retain shall be
                the number of Restricted Shares determined as though such Participant’s
                employment had not been terminated, multiplied by a fraction, the
                numerator of which is the number of months such Participant was employed
                during the Forfeiture Period (including the month during which employment
                terminated) and the denominator of which is the number of months
                in the
                Forfeiture Period.  The balance of Restricted Shares shall be
                transferred to the Company as of the termination
                date.

            


    

    


    
      	
              4.  

            	
              Book
                Unit Grants.

            


    

    


    
      	
              (a)  

            	
              In
                conjunction with the Restricted Share grants, the Board of Directors
                shall
                simultaneously grant each Participant an equivalent number of book
                value
                units (“Book Units”) which are equal to the book value per share of the
                Common Stock of the Company.  The aggregate number of Book Units
                granted hereunder after November 11, 2003 shall not exceed 514,122
                units
                as adjusted for splits and stock dividends.  Units forfeited or
                canceled under paragraphs 4 (c) or (d) hereof shall be thereafter
                available for further grants.

            


    

    
      	
              (b)  

            	
              Book
                Units shall be valued on the basis of book value of the Common Stock
                of
                the Company, as determined in accordance with 5 (c) hereof on the
                last day
                of the fiscal quarter next preceding the date of grant (“Value Date”) and
                again on the third anniversary of the Value Date, subject to adjustment
                pursuant to paragraph 5 hereof, said three (3) year period, as adjusted,
                hereafter referred to as the “Accumulation Period”.  The
                increase, if any, in book value during the Accumulation Period plus
                an
                amount equal to the dividends paid during the Accumulation Period
                on an
                equal number of shares of Common Stock of the Company, shall be paid
                to
                such Participant in cash within ninety (90) days following the expiration
                of the Accumulation Period; provided, however, the Book Units have
                not
                been forfeited under paragraph 4 (c)
                hereof.

            


    

    
      	
              (c)  

            	
              In
                the event of termination of Participant’s employment with the Company for
                any reason other than death, retirement under the normal or disability
                provisions of a retirement plan of the Company, or retirement under
                the
                early retirement provisions of such retirement plan with the consent
                of
                the Company during the Accumulation Period, the appreciation and
                dividend
                equivalents shall be forfeited by the
                Participant.

            


    

    
      	
              (d)  

            	
              If
                a Participant’s employment has terminated because of death, disability or
                retirement under a retirement plan of the Company as set out in 4
                (c)
                above prior to the end of the Accumulation Period, the number of
                Book
                Units such Participant or such Participant’s beneficiary or estate shall
                be entitled to receive shall be the number of Book Units determined
                as
                though such Participant’s employment had not been terminated, multiplied
                by a fraction, the numerator of which is the number of months such
                Participant was employed during the Accumulation Period (including
                the
                month during which employment terminated) and the denominator of
                which is
                the number of months in the Accumulation Period.  In such event,
                the Board of Directors shall determine the book value as of the last
                day
                of the quarter next preceding the date of
                termination.

            


    

    
    

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    
      	
              (e)  

            	
              Any
                payment made with respect to a Participant who has died shall be
                paid to
                the beneficiary designated by the Participant to receive the proceeds
                of
                any group life insurance coverage provided for the Participant by
                the
                Company.  A Participant who has not designated such beneficiary,
                or who desires to designate a different beneficiary, may file with
                the
                Secretary of the Company, a written designation of a beneficiary
                under the
                Book Unit plan, which designation may be changed or revoked only
                by the
                participant.  If no designation of a beneficiary has been made
                under such life insurance coverage or filed with the Secretary of
                the
                Company, distribution shall be made to the Participant’s spouse, if
                surviving, and if not, to the Participant’s
                estate.

            


    

    


    
      	
              5.  

            	
              Adjustments.

            


    

     

    
      	(a)
               	In
              the event that there are changes in the capitalization of the Company
              affecting in any manner the number or kind of outstanding shares of
              Common
              Stock, whether such changes have been occasioned by declaration of
              stock
              dividends, stock splits, reclassification or recapitalization, or because
              the Company has merged or consolidated with another corporation, or
              for
              any reason whatsoever, then the number and kind of shares then subject
              to
              Restricted Share grants and thereafter to become subject to such grants,
              and the Book Unit values, shall be proportionally adjusted by the Board
              of
              Directors of the Company to whatever extent the Board of Directors
              determines, in its sole and absolute discretion, that any such change
              equitably requires an adjustment.


      	
              (b)  

            	
              The
                Board of Directors shall determine book value of the Common Stock
                under 4
                above based on generally accepted accounting principles, and shall
                have
                the right, in its sole and absolute authority, to proportionally
                adjust
                such book values for sales or purchases by the Company of Common
                Stock,
                acquisitions or divestitures, accounting changes or other actions
                of the
                Company taken during the Accumulation Period affecting book value,
                to
                whatever extent the Board of Directors determines that any such action
                reasonably  requires an
                adjustment.

            


    

    
      	
              (c)  

            	
              In
                the event there is a Change in Control (as defined below) of the
                Company,
                the applicable Forfeiture Periods and Accumulation Periods on all
                outstanding Restricted Shares and Book Units shall be accelerated
                and all
                such outstanding Restricted Shares and Book Units shall be fully
                vested.

            


    

    
      	
              (d)  

            	
              As
                used in this Plan, "Change in Control" of the Company
                means:

            


    

     

    (i)           The
      acquisition, within a 12-month period ending on the date of the most recent
      acquisition, by any individual, entity or group (within the meaning of
      Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
      as amended (the "Exchange Act") (a "Person") of beneficial ownership (within
      the
      meaning of Rule 13d-3 promulgated under the Exchange Act as in effect from
      time to time) of fifty percent (50%) or more of the combined voting power of
      the
      then outstanding voting securities of the Company entitled to vote generally
      in
      the election of directors; provided, however, that the following acquisitions
      shall not constitute an acquisition of control:  (A) any
      acquisition by a Person who, immediately before the commencement of the 12-month
      period, already held beneficial ownership of fifty percent (50%) or more of
      that
      combined voting power; (B) any acquisition directly from the Company (excluding an acquisition by virtue of
      the exercise of a
      conversion privilege), (C) any acquisition by the Company, (D) any
      acquisition by any employee benefit plan (or related trust) sponsored or
      maintained by the Company or any corporation controlled by the Company, or
      (E) any acquisition by any corporation pursuant to a reorganization, merger
      or consolidation, if, following such reorganization, merger or consolidation,
      the conditions described in clauses (A), (B) and (C) of
      subsection (iii) of this paragraph 5(e) are satisfied;

     

    (ii)           The
      replacement of a majority of members of the Board of Directors during any
      12-month period, by members whose appointment or election is not endorsed by
      a
      majority of the members of the Board of Directors prior to the date of the
      appointment or election;

     

    (iii)           A
      reorganization, merger or consolidation, in each case, unless, following such
      reorganization, merger or consolidation, (A) more than sixty percent (60%)
      of, respectively, the then outstanding shares of common stock of the corporation
      resulting from such reorganization, merger or consolidation and the combined
      voting power of the then outstanding voting securities of such corporation
      entitled to vote generally in the election of directors is then beneficially
      owned, directly or indirectly, by all or substantially all of the individuals
      and entities who were the beneficial owners, respectively, of the outstanding
      Company common stock and outstanding Company voting securities immediately
      prior
      to such reorganization, merger or consolidation in substantially the same
      proportions as their ownership, immediately prior to such reorganization, merger
      or consolidation, of the outstanding Company stock and outstanding Company
      voting securities, as the case may be, (B) no Person (excluding the
      Company, any employee benefit plan or related trust of the Company or such
      corporation resulting from such reorganization, merger or consolidation and
      any
      Person beneficially owning, immediately prior to such reorganization, merger
      or
      consolidation, directly or indirectly, twenty-five percent (25%) or more of
      the
      outstanding Company common stock or outstanding voting securities, as the case
      may be) beneficially owns, directly or indirectly, twenty-five percent (25%)
      or
      more of, respectively, the then outstanding shares of common stock of the
      corporation resulting from such reorganization, merger or consolidation or
      the
      combined voting power of the then outstanding voting securities of such
      corporation entitled to vote generally in the election of directors and
      (C) at least a majority of the members of the Board of Directors of the
      corporation resulting from such reorganization, merger or consolidation were
      members of the Board at the time of the execution of the initial agreement
      providing for such reorganization, merger or consolidation;

     

    (iv)           A
      complete liquidation or dissolution of the Company; or

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    (v)           The
      sale or other disposition of all or substantially all of the assets of the
      Company, other than any of the following dispositions: (A) to a corporation
      with
      respect to which following such sale or other disposition (x) more than
      sixty percent (60%) of, respectively, the then outstanding shares of common
      stock of such corporation and the combined voting power of the then outstanding
      voting securities of such corporation entitled to vote generally in the election
      of directors is then beneficially owned, directly or indirectly, by all or
      substantially all of the individuals and entities who were the beneficial
      owners, respectively, of the outstanding Company common stock and outstanding
      Company voting securities immediately prior to such sale or other disposition
      in
      substantially the same proportion as their ownership, immediately prior to
      such
      sale or other disposition, of the outstanding Company common stock and
      outstanding Company voting securities, as the case may be, (y) no Person
      (excluding the Company and any employee benefit plan or related trust of the
      Company or such corporation and any Person beneficially owning, immediately
      prior to such sale or other disposition, directly or indirectly, twenty-five
      percent (25%) or more of the outstanding Company common stock or outstanding
      Company voting securities, as the case may be) beneficially owns, directly
      or
      indirectly, twenty-five percent (25%) or more of, respectively, the then
      outstanding shares of common stock of such corporation and the combined voting
      power of the then outstanding voting securities of such corporation entitled
      to
      vote generally in the election of directors and (z) at least a majority of
      the members of the board of directors of such corporation were members of the
      Board at the time of the execution of the initial agreement or action of the
      Board providing for such sale or other disposition of assets of the Company;
      (B) to a shareholder of the Company in exchange for or with respect to its
      stock; (C) to a Person that owns, directly or indirectly, fifty percent
      (50%) or more of the total value or voting power of all outstanding stock of
      the
      Company; or (D) to an entity, at least fifty percent (50%) or more of the
      total value or voting power of which is owned, directly or directly, by the
      Company or by a Person described in (C).

     

    
      	
              (e)  

            	
              Despite
                any other provision of this paragraph 5 to the contrary, an occurrence
                shall not constitute a Change in Control if it does not constitute
                a
                change in the ownership or effective control, or in the ownership
                of a
                substantial portion of the assets of, the Company within the meaning
                of
                Section 409A(a)(2)(A)(v) of the Code and its interpretive
                regulations.

            


    

    
      	
              (f)  

            	
              If
                as of the date a Participant's employment terminates because of retirement
                under paragraph 3(e), Participant is a "key employee" within the
                meaning
                of Section 416(i) of the Code, without regard to paragraph 416(i)(5)
                thereof, and the Company has stock that is publicly traded on an
                established securities market or otherwise, any deferred compensation
                payments otherwise payable because of such retirement will be suspended
                until, and will be paid to Participant on, the first day of the seventh
                month following the month in which Participant's last day of employment
                occurs.  For purposes of this paragraph 5(g) "deferred
                compensation" means compensation provided under a nonqualified deferred
                compensation plan as defined in, and subject to, Section 409A of the
                Code.

            


    

    


    
      	
              6.  

            	
              Amendment
                and Termination.

            


    

    


    The
      Board
      of Directors shall have the power to amend, suspend or terminate the Plan at
      any
      time except that, subject to the conditions of 5 above, (i) no such action
      shall
      cancel, reduce or adversely affect any grant theretofore made without the
      consent of the Participant or the Participant’s beneficiary or estate; or (ii)
      without the approval of the shareholders of the Company, the Board of Directors
      may not increase the aggregate number of Restricted Shares and Book Units to
      be
      granted.

    


    
      	
              7.  

            	
              Restricted
                Share and Book Unit
                Agreement.

            


    

    


    Each
      grant of Restricted Shares and Book Units under the Plan shall be evidenced
      by a
      written agreement executed by the Company and accepted by the Participant,
      and
      shall contain such terms and conditions as the Board of Directors may deem
      desirable which are not inconsistent with the Plan.

    


    
      	
              8.  

            	
              Finality
                of Determination.

            


    

    


    The
      Compensation Committee of the Board of Directors shall have the power to
      interpret the Plan, and all interpretations, determinations and actions by
      the
      Compensation Committee shall be final, conclusive and binding upon all
      parties.

    


    
      	
              9.  

            	
              Termination
                of Employment.

            


    

    


    Nothing
      in the Plan or any grant made under the Plan, shall confer upon any Participant
      any right to continue in the employ of the Company or affect in any way the
      right of the Company to terminate the Participant’s employment at any
      time.

    


    
      	
              10.  

            	
              Effective
                Date.

            


    

    


    This
      Plan
      became effective on December 31, 1996 and will continue to December 31, 2007,
      subject to approval of the amendment and restatement of the Plan by the holders
      of a majority of the shares of Common Stock of the Company which are represented
      in person or by proxy at the 2004 Annual Meeting of Shareholders.

    
      


      
        	
                11.  

              	
                Interpretation.

              


      

    

     

    This
      Plan
      shall be interpreted and applied in a manner consistent with the applicable
      standards for nonqualified deferred compensation plans established by Section
      409A of the Code and its interpretive regulations and other regulatory
      guidance.  To the extent that any terms of this Agreement would
      subject Participants to gross income inclusion, interest, or additional tax
      pursuant to Section 409A of the Code, those terms are to that extent superseded
      by, and shall be adjusted to the minimum extent necessary to satisfy, the
      applicable Section 409A of the Code standards.

     

    3