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Item 9A. Controls and Procedures

2024-02-29 compared with 2023-02-23 · 64 added, 19 removed, 201 unchanged (29% of the section changed)

2 unchanged sentences

Under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report.

Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of such date.

Our disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

During year end control procedures, management identified a material weakness in our internal control over financial reporting related to the accounting for deferred tax assets.

Specifically, the internal controls in place with respect to the calculation of state deferred taxes and the related income tax expense (benefit) were not designed appropriately.

The material weakness existed as of December 27, 2023 and prior periods.

Management identified and reported this weakness to both our audit committee and Ernst & Young LLP, our independent registered public accounting firm, immediately upon identification.

The nature of the material weakness is described as part of Management's Report on our Internal Control over Financial Reporting.

See Item 8, Financial Statements and Supplementary Data.

A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met.

Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues have been detected.

The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under potential future conditions, regardless of how remote.

As a result of this discovery, our Chief Executive Officer and Chief Financial Officer have now concluded that our disclosure controls and procedures were not effective at a reasonable assurance level as of December 27, 2023, as a result of the material weakness identified in Management's Report on our Internal Control over Financial Reporting related to accounting for deferred tax assets as discussed below.

MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

1 unchanged sentence

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

There were no changes to our internal control over financial reporting that occurred during the quarter ended December 28, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

For changes in internal control over financial reporting, see Item 8, Financial Statements and Supplementary Data.

Shake Shack Inc.

Form 10-K | 137

Other Information.

Not applicable.

Rule 10b5-1 Trading Plans

Pursuant to Item 408(a) of Regulation S-K, our directors and officers (as defined in Rule 16a-1(f) under the Exchange Act) adopted, terminated, or modified a “Rule 10b5-1 trading arrangement” in the fiscal year ended December 27, 2023 as follows:

Name Position

Action Adoption Date

Expiration Date Aggregate Numbers of Class A Common Stock to be Purchased/Sold

Jeff Flug Director Adoption 5/18/2023 8/16/2024 5,960 shares to be sold

Daniel Meyer Chairman of the Board of Directors Adoption 8/8/2023 4/30/2024 100,000 shares to be sold

Other than as disclosed above, no other officer or director adopted , terminated , or modified a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

Shake Shack Inc.

1 unchanged sentence

Directors, Executive Officers and Corporate Governance.

The information required by this item with respect to our directors is incorporated by reference to the sections entitled “Nominees for Election as Class II Directors” and "Continuing Directors" in our Proxy Statement to be filed in connection with our 2023 Annual Meeting of Shareholders (the “Proxy Statement”).

The information required by this item with respect to our Code of Business Conduct and Audit Committee (including our “audit committee financial expert”) is incorporated by reference to the sections entitled “Code of Ethics” and “Audit Committee Report.”

The information required by this item with respect to our directors is incorporated by reference to the sections entitled “Nominees for Election as Class III Directors” and "Continuing Directors" in our Proxy Statement to be filed in connection with our 2024 Annual Meeting of Shareholders (the “Proxy Statement”).

The information required by this item with respect to our executive officers is set forth under the section entitled “Information About Our Executive Officers” in Part I, Item 1 of this Annual Report on Form 10-K.

3 unchanged sentences

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The information required by this item with respect to security ownership of certain beneficial owners and management is also incorporated by reference to the section entitled “Security Ownership of Certain Beneficial Owners and Management” in our Proxy Statement.

The information required by this item with respect to security ownership of certain beneficial owners and management is incorporated by reference to the section entitled “Security Ownership of Certain Beneficial Owners and Management” in our Proxy Statement.

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY INCENTIVE PLANS

74 unchanged sentences

10-K 10.5.3 2/25/2019

Amendment No.

4 to Stockholders Agreement, dated and effective as of May 15, 2023, by and among Shake Shack Inc., SSE Holdings, LLC, the Meyer Stockholders and the LGP Stockholders.

8-K 10.2 5/16/2023

Amendment No.

5 to Stockholders Agreement, dated and effective as of May 15, 2023, by and among Shake Shack Inc., SSE Holdings, LLC and the Meyer Stockholders.

8-K 10.3 5/16/2023

Form of Indemnification Agreement entered into between Shake Shack Inc.

8 unchanged sentences

10-Q 10.1 5/16/2016

Shake Shack Inc.

Form 10-K | 142

Incorporated by Reference Filed

Exhibit Description Form Exhibit Filing Date

† Amendment No.

8 unchanged sentences

S-1/A 10.20 1/20/2015

Shake Shack Inc.

Form 10-K | 126

Incorporated by Reference Filed

Exhibit Description Form Exhibit Filing Date

† Form of Performance Stock Unit Award Agreement under the Shake Shack Inc., 2015 Incentive Award Plan, as amended

17 unchanged sentences

8-K 10.1 1/5/2017

Separation Agreement by and between Zachary Koff and Shake Shack Enterprises, LLC., executed August 2, 2023

8-K 10.1 8/3/2023

† Amended and Restated Employment Agreement, effective October 25, 2018, by and among Shake Shack Inc., SSE Holdings, LLC and Randy Garutti

8-K 10.1 10/26/2018

Transition and Advisory Agreement, dated January 26, 2024, by and among Randall Garutti, Shake Shack Inc.

and SSE Holdings, LLC

10.10 1/26/2024

Employment Agreement, effective as of June 14, 2021, by and among Katherine Fogertey, Shake Shack Inc., SSE Holdings, LLC and Shake Shack Enterprises, LLC

14 unchanged sentences

10-Q 10.2 5/7/2021

Fourth Amendment to Credit Agreement, dated as of June 29, 2023, by and among SSE Holdings, LLC, the Guarantors party hereto, the Lenders party hereto, and JPMorgan Chase Bank, National Association, as Administrative agent

10-Q 10.7 8/4/2023

Security and Pledge Agreement, dated as of August 2, 2019, by and among SSE Holdings, LLC, the other Obligors party thereto, and Wells Fargo Bank, National Association, as Administrative Agent

10-Q 10.2 11/4/2019

Shake Shack Inc.

Form 10-K | 143

Incorporated by Reference Filed

Exhibit Description Form Exhibit Filing Date

Distribution Agreement, dated April 17, 2020, by and between Shake Shack Inc., J.P.

5 unchanged sentences

8-K 1.1 4/21/2020

Cooperation Agreement, dated May 15, 2023, by and among Engaged Capital Flagship Master Fund, LP, Engaged Capital Co-Invest XV, LP, Engaged Capital Co-Invest XV-A, LP, Engaged Capital Flagship Fund, LP, Engaged Capital Flagship Fund, Ltd., Engaged Capital, LLC, Engaged Capital Holdings, LLC, Glenn W.

Welling and Shake Shack Inc.

8-K 10.1 5/16/2023

Letter Agreement by and between Jeffrey D.

Lawrence and Shake Shack Inc., dated May 15, 2023

8-K 10.4 5/16/2023

Letter Agreement by and between Charles J.

Chapman III and Shake Shack Inc., executed July 1, 2023

8-K 10.1 7/10/2023

Subsidiaries of Shake Shack Inc.

4 unchanged sentences

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Shake Shack Inc.

Form 10-K | 127

Incorporated by Reference Filed

Exhibit Description Form Exhibit Filing Date

D odd-Frank Clawback Policy

101.INS XBRL Instance Document *

20 unchanged sentences

/s/ Katherine I.

Fogertey Chief Financial Officer February 23, 2023

Fogertey (Principal Financial and Accounting Officer)

Chief Financial Officer

February 29, 2024

(Principal Financial and Accounting Officer)

/s/ Daniel Meyer Chairman of the Board of Directors February 29, 2024

1 unchanged sentence

Sumaiya Balbale

/s/ Lori George Billingsley Director February 23, 2023

Lori George Billingsley

/s/ Lori George

Director February 29, 2024

/s/ Charles J.

Director February 29, 2024

/s/ Anna Fieler Director February 29, 2024

/s/ Jeff Flug Director February 29, 2024

/s/ Jeffrey D.

Director February 29, 2024

/s/ Jenna Lyons Director February 29, 2024

10 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures