Shake Shack 2015 Annual Report Download - page 91

Table of Contents
Indemnification and Exculpation.
The SSE Holdings LLC Agreement provides for indemnification of the manager, Members and officers of SSE Holdings and their respective
subsidiaries or affiliates. To the extent permitted by applicable law, SSE Holdings will indemnify us, as its managing member, its authorized officers, its other employees and agents
from and against any losses, liabilities, damages, costs, expenses, fees or penalties incurred by any acts or omissions of these persons, provided that the acts or omissions of these
indemnified persons are not the result of fraud, intentional misconduct or a violation of the implied contractual duty of good faith and fair dealing, or any lesser standard of conduct
permitted under applicable law.
We, as the managing member, and the authorized officers and other employees and agents of SSE Holdings are not liable to SSE Holdings, its Members or their affiliates for damages
incurred by any acts or omissions of these persons, provided that the acts or omissions of these exculpated persons are not the result of fraud, or intentional misconduct.
Amendments.
The SSE Holdings LLC Agreement may be amended with the consent of the holders of a majority in voting power of the outstanding LLC Interests; provided that if
the managing member holds greater than 33% of the LLC Interests, then it may be amended with the consent of the managing member together with holders of at least 50% of the
outstanding LLC Interests, excluding LLC Interests held by the managing member. Notwithstanding the foregoing, no amendment to any of the provisions that expressly require the
approval or action of certain members may be made without the consent of such members and no amendment to the provisions governing the authority and actions of the managing
member or the dissolution of SSE Holdings may be amended without the consent of the managing member.
STOCKHOLDERS AGREEMENT
We entered into a Stockholders Agreement with each member of the Voting Group. The Stockholders Agreement, as further described below, contains specific rights, obligations and
agreements of these parties as owners of our Class A common stock and Class B common stock.
Voting Agreement.
Under the Stockholders Agreement, the members of the Voting Group agree to take all necessary action, including casting all votes to which such members are
entitled to cast at any annual or special meeting of stockholders, so as to ensure that the composition of our Board of Directors and its committees complies with the provisions of the
Stockholders Agreement related to the composition of our Board of Directors and its committees.
Meyer Group Approvals.
Under the Stockholders Agreement the actions listed below by us or any of our subsidiaries require the approval of the Meyer Group for so long as the
Meyer Group collectively owns at least 10% of the total shares of Class A and Class B common stock owned by it immediately following the consummation of our initial public
offering. The actions include:
REGISTRATION RIGHTS AGREEMENT
We entered into a Registration Rights Agreement with the Original SSE Equity Owners in connection with our IPO. The Registration Rights Agreement provides the Original SSE
Equity Owners certain registration rights whereby, at any time following our initial public offering and the expiration of any related lock-
up period, the Continuing SSE Equity Owners
can require us to register under the Securities Act shares of Class A common stock issuable to them, at our election, upon redemption or exchange of their LLC Interests and the Former
SSE Equity Owners can require us to register under the Securities Act the shares of Class A common stock issued to them in connection with the Organizational Transactions. The
Registration Rights Agreement also provides for piggyback registration rights for the Original SSE Equity Owners.
INDEMNIFICATION AGREEMENTS
Our bylaws provide that we will indemnify our directors and officers to the fullest extent permitted by the DGCL, subject to certain exceptions contained in our bylaws. In addition, our
certificate of incorporation, provides that our directors will not be liable for monetary damages for breach of fiduciary duty.
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change in control transactions;
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the sale, lease or exchange of all or a substantial amount of the property and assets of Shake Shack, SSE Holdings or any of SSE Holdings' subsidiaries, taken as a whole;
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initiating any liquidation, dissolution, bankruptcy or other insolvency proceeding involving Shake Shack, SSE Holdings or any of their respective subsidiaries;
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terminating the employment of our Chief Executive Officer or hiring a new Chief Executive Officer;
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any authorization or issuance of equity securities of Shake Shack or its subsidiaries other than (i) pursuant to any equity incentive plans or arrangements approved by our
Board of Directors or (ii) upon an exchange of shares of Class B Common Stock together with SSE Holdings Units for Shares of Class A Common Stock;
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increasing or decreasing the size of our Board of Directors; and
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any amendment or amendments to the organizational documents of Shake Shack or SSE Holdings.