Shake Shack 2016 Annual Report Download - page 102

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Table of Contents
respectively. In February 2015, we established our own self-funded health insurance plan for our employees and ceased payments to USHG. The total amount paid
to USHG for these health insurance costs for fiscal 2015 was $146 . These amounts are included in labor and related expenses and general and administrative
expenses on the Consolidated Statements of Income (Loss). Additionally, our employees are eligible participants under USHG's 401(k) plan. We pay our share of
the employer's matching contributions directly to the third-party plan trustee.
We also pay USHG for certain miscellaneous general operating expenses incurred by them on our behalf. Total amounts paid to USHG for general corporate
expenses were $157 , $490 and $473 for fiscal 2015 . 2014 and 2013 , respectively, and are included in general and administrative expenses on the Consolidated
Statements of Income (Loss).
Total amounts payable to USHG as of December 30, 2015 and December 31, 2014 were $2 and $238 , respectively, and are included in other current liabilities on
the Consolidated Balance Sheets. No amounts were due from USHG as of December 30, 2015 and December 31, 2014 .
Hudson Yards Sports and Entertainment
In fiscal 2011, we entered into a Master License Agreement (an "MLA") with Hudson Yards Sports and Entertainment LLC ("HYSE"), a subsidiary of USHG and
a related party, to operate Shake Shack branded limited menu concession stands in sports and entertainment venues within the United States. The agreement
expires on December 31, 2027 and includes five consecutive five -year renewal options at HYSE's option. As consideration for these rights, HYSE pays us a
license fee based on a percentage of net food sales, as defined in the MLA. HYSE also pays us a percentage of profits on sales of branded beverages, as defined in
the MLA. Amounts paid to us by HYSE for fiscal 2015 , 2014 and 2013 were $282 , $218 and $215 , respectively, and are included in licensing revenue on the
Consolidated Statements of Income (Loss). No amounts were due from HYSE as of December 30, 2015 and December 31, 2014 .
Madison Square Park Conservancy
The Chairman of our Board of Directors serves as a director of the Madison Square Park Conservancy ("MSP Conservancy"), with which we have a license
agreement and pay license fees to operate our Madison Square Park Shack. Amounts paid to Madison Square Park Conservancy as rent amounted to $692 , $528
and $607 for f iscal 2015 , 2014 and 2013 , respectively. These amounts are included in occupancy and related expenses on the Consolidated Statements of Income
(Loss). Total amounts due to the MSP Conservancy as of December 30, 2015 were $17 . No amounts were due to the MSP Conservancy as of December 31, 2014
as our Madison Square Park Shack was closed for renovations.
Share Our Strength
The Chairman of our Board of Directors serves as a director of Share Our Strength, for which Shake Shack hold the "Great American Shake Sale" every year
during the month of May to raise money and awareness for childhood hunger. During the Great American Shake Sale, we encourage guests to donate money to
Share Our Strength's No Kid Hungry campaign in exchange for a coupon for a free cake-themed shake. All of the guest donations we collect go directly to Share
Our Strength. We raised a total of $504 , $338 and $286 in fiscal 2015 , 2014 and 2013 , respectively, and the proceeds were remitted to Share Our Strength in the
respective years. We incurred costs of approximately $109 , $69 and $53 for fiscal 2015 , 2014 and 2013 , respectively, representing the cost of the free shakes
redeemed. These costs are included in general and administrative expense and other operating expenses on the Consolidated Statements of Income (Loss).
Tax Receivable Agreement
In connection with our IPO, we entered into a tax receivable agreement with the Continuing SSE Equity Owners that provides for the payment by us to the
Continuing SSE Equity Owners of 85% of the amount of any tax benefits that Shake Shack actually realizes or in some cases is deemed to realize as a result of
(i) increases in the tax basis of the net assets of SSE Holdings resulting from any redemptions or exchanges of LLC Interests and (ii) certain other tax benefits
related to our making payments under the Tax Receivable Agreement. See Note 14 for further information. There were no amounts paid under the Tax Receivable
Agreement to the Continuing SSE Equity Owners during fiscal 2015 . Total amounts due to the Continuing SSE Equity Owners as of December 30, 2015 under the
Tax Receivable Agreement were $173,090 . As the Tax Receivable Agreement went into effect in January 2015, no
Shake Shack Inc. Form 10-K | 100