Shake Shack 2016 Annual Report Download - page 92

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Table of Contents
The following table summarizes the effects of changes in ownership in SSE Holdings on our equity:
2015
2014
2013
Net income attributable to Shake Shack Inc. $ (8,776)
$ 2,118
$ 5,423
Transfers (to) from non-controlling interests:
Increase in additional paid-in capital as a result of settlement of unit appreciation rights 987
—
—
Decrease in additional paid-in as a result of the Organizational Transactions (75,182)
—
—
Increase in additional paid-in capital as a result of the redemption of LLC Interests 19,934
—
—
Increase in additional paid-in capital as a result of the USC Merger $ 5,908
$ —
$ —
Change from net income attributable to Shake Shack Inc. and transfers (to) from non-controlling
interest $ (57,129)
$ 2,118
$ 5,423
In the fourth quarter of fiscal 2015 , we corrected certain immaterial errors relating to non-controlling interest amounts in prior 2015 fiscal interim periods, after
determining that our initial investment in SSE Holdings, made at the time of our IPO, was not correctly accounted for as a change in a parent's ownership interest
in a subsidiary while retaining control. As a result, in the fourth quarter of 2015, we recognized a $63,407 increase to non-controlling interests, a $64,785 decrease
to additional paid-in capital and a $1,278 increase to retained earnings relating to these errors from prior interim periods. The corrections had no impact on our
Consolidated Statements of Income or Cash Flows for the affected interim periods.
NOTE 13 : EQUITY-BASED COMPENSATION
A summary of equity-based compensation expense recognized during fiscal 2015 , 2014 and 2013 is as follows:
2015
2014
2013
Unit appreciation rights $ 11,762
$ —
$ —
Restricted Class B units 605
165
93
Stock options 4,314
—
—
Equity-based compensation expense $ 16,681
$ 165
$ 93
Total income tax benefit recognized related to equity-based compensation $ 482
$ 4
$ 2
Amounts are included in general and administrative expense on the Consolidated Statements of Income (Loss) .
Unit Appreciation Rights
Prior to the IPO, we maintained a Unit Appreciation Rights Plan (the "UAR Plan"), effective in fiscal 2012, and as amended, whereby we had the authority to grant
up to 31,303 unit appreciation rights ("UARs") to employees. The UARs granted were subject to continued employment and were only exercisable upon a
qualifying transaction, which was either a change of control or an initial public offering, each as defined in the UAR Plan. Upon the occurrence of a qualifying
transaction, each UAR entitled the holder to receive a payment from us. Such payment and related compensation expense was determined by multiplying (i) the
excess, if any, of the qualifying transaction price over the base amount of the UAR, by (ii) the stated number of Class B units deemed covered by the UAR.
Effective October 30, 2014, the UAR Plan was amended to provide that the payment to which UAR holders were entitled upon the occurrence of a qualifying
transaction would be in the form of securities of the Company or one of its affiliates or such other form of payment as we determined in our sole discretion. The
UARs would have terminated on the ten th anniversary of the grant date or upon termination of employment, if earlier.
90 | Shake Shack Inc. Form 10-K