Chipotle 2012 Annual Report Download - page 128

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before the end of a Performance Period, the Committee may, in its sole discretion, provide a prorated incentive
award based on the number of days the Participant was employed by the Company during such Performance
Period; provided, however, that no prorated incentive will be paid unless all of the applicable requirements set
forth in the Plan are met, including without limitation that the Committee determines that the Performance Goal
for the applicable Performance Period has been met and authorizes the payment of incentive awards. If the
employment of a Participant terminates during a Performance Period for any other reason, no incentive award
will be paid to the Participant for that Performance Period.
Section 4. Compliance Requirements.
A Participant must comply with all applicable state and federal regulations and Company policies
(collectively, the “Compliance Requirements”) in order to be eligible to receive an incentive award under the
Plan. A Participant whose employment is terminated after the end of a Performance Period, but before incentive
awards for such Performance Period are paid, due to violating any of the Compliance Requirements or other
reasons involving cause will not be eligible to receive an incentive award for such Performance Period.
Section 5. Performance Goal.
The Committee may grant performance-based awards (“Awards”) to Participants with respect to a
Performance Period beginning on or after January 1, 2014 subject to the terms and conditions of the Plan. Each
Award shall provide that the Performance Goal is the Company’s achievement of positive Operating Income (as
defined below) for the then current Performance Period. For purposes of the Plan, “Operating Income” means,
with respect to a Performance Period, operating income as presented in Chipotle’s consolidated audited financial
statements, excluding (i) restructuring and/or other nonrecurring charges; (ii) exchange rate effects, as applicable,
for non-US dollar denominated net sales and operating earnings; (iii) the effects of changes to generally accepted
accounting standards required by the Financial Accounting Standards Board; (iv) the effects to any statutory
adjustments to corporate tax rates and (v) the impact of any “extraordinary items” as determined under generally
accepted accounting principles. In the manner required by Section 162(m) of the Code, the Committee shall,
promptly after the date on which the necessary financial and other information for a particular Performance
Period becomes available, certify whether or not the Performance Goal has been achieved.
Section 6. Payment.
If the Committee has determined that the Company has attained the Performance Goal for a Performance
Period, the amount payable under the Award for that Performance Period shall be $8,000,000 provided, however,
that the Committee may in its sole discretion exercise discretion to reduce or eliminate the amount payable to any
Participant based on such factors as the Committee may deem appropriate; including a manner consistent with
corporate and individual performance as measured under Chipotle’s annual performance-based cash incentive
program for all of our full-time regional and corporate employees. In no event may the Committee increase the
amount of any Award payable to any Participant above $8,000,000 for a Performance Period. For purposes of
clarity, the Committee may exercise the discretion provided for by the foregoing sentence in a non-uniform
manner among Participants, including taking into account individual performance. Awards shall be settled in
cash or, in the Committee’s sole discretion, in shares of Chipotle’s common stock from the Amended and
Restated Chipotle Mexican Grill, Inc. 2011 Stock Incentive Plan or other Chipotle equity compensation plan that
has been approved by shareholders. The Company shall pay Awards as soon as administratively practical
following certification that the Performance Goal for a Performance Period has been met as provided under
Section 5 above and the determination of the actual incentive amounts after the exercise of any discretion under
this Section 6, but in no event more than two and one half months following the end of the Performance Period to
which such certification relates except as provided under Section 7 below.
A-2
Proxy Statement