Chipotle 2013 Annual Report Download - page 102

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non-cash related entries; (xvi) income from operations excluding non-cash adjustments; (xvii) income from
operations before equity compensation expenses; (xviii) income from operations excluding equity compensation
expense and lease expense; (xix) operating cash flow from operations; (xx) income before income taxes;
(xxi) gross or operating margin; (xxii) restaurant-level operating margin; (xxiii) profit margin; (xxiv) assets;
(xxv) debt; (xxvi) working capital; (xxvii) return on equity; (xxviii) return on net assets; (xxix) return on total
assets; (xxx) return on capital; (xxxi) return on investment; (xxxii) return on revenue; (xxxiii) net or gross
revenue; (xxxiv) comparable restaurant sales; (xxxv) new restaurant openings; (xxxvi) market share;
(xxxvii) economic value added; (xxxviii) cost of capital; (xxxix) expense reduction levels; (xl) safety record;
(xli) stock price; (xlii) productivity; (xliii) customer satisfaction; (xliv) employee satisfaction; and (xlv) total
shareholder return.
These performance measures may be applied individually, alternatively, or in any combination, either to
Chipotle as a whole or to one or more of its subsidiaries, divisions or operating units or groups, and measured
either annually or cumulatively over a period of years, on an absolute basis, or relative to a pre-established target,
to previous years’ results, or to a designated comparison group, in each case as specified by the Compensation
Committee in the award agreement.
The number of shares of common stock, stock options, or other benefits granted, issued, retainable, or
vested under an award that is intended to satisfy Section 162(m) upon satisfaction of performance criteria may be
reduced by the Committee based on any further considerations that the committee may determine in its sole
discretion. Specifically, the Compensation Committee is authorized at any time during the first ninety (90) days
of a performance period (or, if longer or shorter, within the maximum period allowed under Section 162(m)), to
adjust or modify the calculation of a performance goal for a performance period, based on:
(i) asset write-downs; (ii) litigation or claim judgments or settlements; (iii) the effect of changes in tax laws,
accounting principles, or other laws or regulatory rules affecting reported results; (iv) any reorganization and
restructuring programs; (v) extraordinary nonrecurring items as described in Accounting Principles Board
Opinion No. 30 (or any successor pronouncement thereto) and/or in management’s discussion and analysis of
financial condition and results of operations appearing in Chipotle’s annual report to shareholders for the
applicable year; (vi) acquisitions or divestitures; (vii) any other specific unusual or nonrecurring events, or
objectively determinable category thereof; (viii) foreign exchange gains and losses; and (ix) a change in
Chipotle’s fiscal year.
Time based restricted stock units are not intended to qualify as performance-based compensation for
purposes of Section 162(m).
Administration
The Compensation Committee administers the 2011 Stock Incentive Plan, and has broad authority to do all
things necessary or desirable, in its sole discretion, in connection with plan administration. The Compensation
Committee will select who will receive equity awards; determine the number of shares covered thereby; and,
subject to the terms and limitations expressly set forth in the 2011 Stock Incentive Plan, establish the terms,
conditions, and other provisions of the equity awards. The Compensation Committee may interpret the 2011
Stock Incentive Plan and establish, amend, and rescind any rules related to the 2011 Stock Incentive Plan, and
make remedial changes to the terms of an outstanding equity award to comply with applicable laws, regulations
and listing requirements and to avoid unintended consequences resulting from unexpected events. The
Compensation Committee has the discretion to permit the automatic exercise of vested in-the-money stock
options and stock appreciation rights, and can delegate this authority to Chipotle’s management. The
Compensation Committee has the authority to toll the exercise period for stock options and stock appreciation
rights if such awards held by a former employee cannot be exercised due to trading or other legal restrictions, but
not beyond the maximum expiration date of the stock options or stock appreciation rights.
30
Proxy Statement