Chipotle 2013 Annual Report Download - page 139

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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires our officers and directors and holders of
greater than 10 percent of our outstanding common stock to file initial reports of their ownership of our equity
securities and reports of changes in ownership with the SEC. Based solely on a review of the copies of such
reports furnished to us and written representations from our officers and directors, we believe that all
Section 16(a) filing requirements were complied with on a timely basis in 2013.
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Agreements with Sequence LLC
Mark Crumpacker, our Chief Marketing & Development Officer, served as Creative Director for Sequence,
LLC, a strategic design and marketing consulting firm he co-founded in 2002, prior to joining us in January
2009. Sequence provided us with a variety of marketing consulting services during 2013 under a master services
agreement, and we expect to continue to work with Sequence during 2014. Sequence has issued Mr. Crumpacker
a promissory note in connection with his separation from them and has agreed to license certain intellectual
property from him. We paid Sequence a total of $890,853 in fees during 2013, and $136,900 in fees in the first
two months of 2014. The Audit Committee of our Board of Directors has reviewed and approved our relationship
with Sequence pursuant to the policy described on page 18.
Registration Rights
Prior to our initial public offering, certain of our current shareholders, including Steve Ells, our Chairman
and Co-Chief Executive Officer, Monty Moran, our Co-Chief Executive Officer and member of our Board of
Directors, and Albert S. Baldocchi and Darlene J. Friedman, members of our Board, entered into a registration
rights agreement with us relating to shares of common stock they held at the time the agreement was executed.
Under the agreement, these directors are entitled to piggyback registration rights with respect to registration
statements we file under the Securities Act of 1933, as amended, subject to customary restrictions and pro rata
reductions in the number of shares to be sold in an offering. We would be responsible for the expenses of any
such registration.
Director and Officer Indemnification
We have entered into agreements to indemnify our directors and executive officers, in addition to the
indemnification provided for in our certificate of incorporation and bylaws. These agreements, among other
things, provide for indemnification of our directors and executive officers for certain expenses (including
attorneys’ fees), judgments, fines and settlement amounts incurred by any such person in any action or
proceeding, including any action by or in the right of our company, arising out of such person’s services as a
director or executive officer of ours, any subsidiary of ours or any other company or enterprise to which the
person provided services at our request. We believe that these provisions and agreements are necessary to attract
and retain qualified persons as directors and executive officers.
67
Proxy Statement