Chipotle 2013 Annual Report Download - page 101

and such awards may reflect the original terms of the related award being assumed or substituted for
and need not comply with other specific terms of the plan.
Award Limits
The maximum number of shares that may be covered by awards granted under the 2011 Stock Incentive
Plan to any single participant during any calendar year is 700,000.
The maximum number of shares that may be covered by “incentive stock options” within the meaning of
Section 422 of the Internal Revenue Code may not exceed 3,000,000.
Vesting and Exercise of Stock Options and Stock Appreciation Rights
The exercise price of stock options granted under the 2011 Stock Incentive Plan may not be less than the fair
market value of our common stock on the date of grant. The Committee determines fair market value using any
permitted valuation method permitted under the stock rights exemption available under IRS regulations. The
maximum exercise period may not be longer than ten years. The Compensation Committee determines when
each stock option becomes exercisable, including the establishment of performance vesting criteria, if any. The
award agreement specifies the consequences under the stock option of a recipient’s termination of the
employment, service as a director or other relationship between us and the participant. Unless otherwise specified
in an award agreement for a particular option, unvested stock options vest in full in the event of a participant’s
termination without cause or resignation for good reason (as defined in the 2011 Stock Incentive Plan) within two
years following a change in control (as defined in the 2011 Stock Incentive Plan). Similar terms and limitations
apply to stock appreciation rights under the 2011 Stock Incentive Plan.
Vesting of Full Value Awards
The Compensation Committee may make the grant, issuance, retention, or vesting of Full Value Awards
contingent upon continued employment with Chipotle, the passage of time, or such performance criteria and the
level of achievement against such criteria as it deems appropriate. A Full Value Award may, among other things,
involve the transfer of actual shares of common stock, either at the time of grant or thereafter, or payment in cash
or otherwise of amounts based on the value of shares of common stock and be subject to performance-based
and/or service-based conditions. Unless otherwise specified in an award agreement for a particular award,
unvested Full Value Awards vest in full in the event of a participant’s termination without cause or resignation
for good reason (as defined in the 2011 Stock Incentive Plan) within two years following a change in control (as
defined in the 2011 Stock Incentive Plan). The Compensation Committee may, but is not required, to grant Full
Value Awards under the plan in a manner intended to qualify as performance-based compensation under
Section 162(m) of the Internal Revenue Code.
Eligibility under Section 162(m)
Awards may, but need not, include performance criteria that are intended to satisfy Section 162(m) of the
Internal Revenue Code. To the extent that awards are intended to qualify as performance-based compensation
under Section 162(m), the performance criteria will be based on stock price appreciation (in the case of stock
options or stock appreciation rights) or on one or more of the following performance measures (in the case of
Full Value Awards), each of which may be adjusted as provided in the 2011 Stock Incentive Plan:
(i) revenue growth; (ii) cash flow; (iii) cash flow from operations; (iv) net income; (v) net income before
equity compensation expense; (vi) earnings per share, diluted or basic; (vii) earnings per share from continuing
operations, diluted or basic; (viii) earnings before interest and taxes; (ix) earnings before interest, taxes,
depreciation, and amortization; (x) earnings from continuing operations; (xi) net asset turnover; (xii) inventory
turnover; (xiii) capital expenditures; (xiv) income from operations; (xv) income from operations excluding
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Proxy Statement