The company announced the moves this afternoon, almost a week after shareholders voted off the board Alan Gilman, the chairman and acting CEO of the struggling burger chain, and another former CEO.
The company on Wednesday confirmed that an activist Texas hedge fund won a proxy battle for two board seats. Joining the board were the fund's chief, Sardar Biglari, and an adviser to the fund, Philip Cooley.
Biglari had sought to take over as chairman post but apparently encountered resistance from sitting board members at the new board's first meeting yesterday afternoon.
In a statement, the company thanked Gilman for his 16 years with the company.
Gilman and board member James Williamson Jr. lost their seats, while the rest of the sitting board members retained their seats. The seven members who stayed also were recommended by Biglari.
Biglari, 30, heads the San Antonio-based Lion Fund, and Cooley, 65, a business professor, is an adviser to the fund. The fund owns 8.5 percent of Steak n Shake stock.
Shares were down slightly in late afternoon trading, to $7.93.