Chipotle 2013 Annual Report Download - page 130

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Terms of 2013 Equity-Based Awards
SOSARs
Each SOSAR represents the right to receive shares of common stock in an amount equal to (i) the excess of
the market price of the common stock at the time of exercise over the exercise price of the SOSAR, divided by
(ii) the market price of the common stock at the time of exercise. The exercise price of the annual SOSARs
granted in February, $318.45, is equal to the closing price of our common stock on the date the committee
approved the grants. One half of the annual SOSARs granted to each officer are subject to vesting in equal
amounts on the second and third anniversary of the grant date, and the remaining half are subject to vesting
contingent upon our achievement of stated levels of cumulative adjusted cash flow from operations prior to the
fourth and fifth fiscal year-ends following the award date, with vesting to occur no sooner than the second and
third anniversary of the awards (with half of each Performance SOSAR subject to each such time-based vesting
date).
The exercise price of the SOSARs granted to Mr. Crumpacker in June, $365.80, is equal to the closing price
of our common stock on the date the committee approved the grants. The SOSARs are subject to vesting in equal
amounts on the second and third anniversary of the grant date.
Vesting of all of the SOSARs granted in 2013 may accelerate as described in the footnotes to the Equity
Award Vesting table appearing below under “Potential Payments Upon Termination or Change-in-Control.” We
filed the form of SOSAR Agreements for these grants as an exhibit to our Quarterly Report on Form 10-Q filed
with the SEC on April 20, 2012.
Performance Shares
The 2013 performance shares represent the right to receive shares of common stock subject to achievement
over the three year period beginning October 1, 2013 of specified levels of cumulative adjusted cash flow from
operations. Each executive may earn zero shares if cumulative adjusted cash flow from operations over the
performance period falls short of a threshold amount, or a stated number of shares based on achievement at
threshold, target and maximum levels, with the number of shares to be issued to be pro-rated based on
achievement of adjusted cash flow from operations between the threshold and target or target and maximum
levels. Payout of the awards requires that the executive serve as our employee or as a non-employee member of
our Board at all times from the grant date to the payout, subject to pro-rata payouts in the event the executive
terminates service with us due to death, disability, or the executive’s retirement and the performance target is
subsequently met prior to the expiration date. Vesting of the performance shares may also accelerate as described
in the footnotes to the Equity Award Vesting Upon Termination table appearing below under “Potential
Payments Upon Termination or Change-in-Control,” and in the text under “Potential Payments Upon
Termination or Change-in-Control—Equity Award Vesting Upon Change-in-Control—Performance Shares.” We
filed the form of Performance Share Agreement for these performance shares as an exhibit to our Annual Report
on Form 10-K filed on February 17, 2011.
58
Proxy Statement