Chipotle 2008 Annual Report Download - page 103

unvested awards are terminated. Options or SOSARs vested on or before the termination date remain exercisable for a
period of either 30 days (for awards granted in 2006) or 90 days (for awards granted thereafter) following the termination
date. Only options granted in 2006 would have accelerated in the event of termination of an executive officer’s
employment on December 31, 2008 for economic reasons.
Economic termination under applicable option and SOSAR agreements would also constitute termination without cause
under other outstanding equity awards.
(4) Our employees, including the executive officers, are eligible for retirement under the terms of our outstanding equity
awards when the employee reaches a combined age and years-of-service with us (and with McDonald’s Corporation
unless there was a break in service prior to joining us from McDonald’s) of 70. Of the executive officers, only
Mr. Hartung, Mr. Wilner and Mr. Blessing are eligible for retirement.
In the event the employment with us of a holder of options or SOSARs terminates as a result of the holder’s retirement,
provided we receive six months’ prior written notice of the retirement and the holder executes an agreement not to
engage in any competitive activity with us for a period of at least two years following retirement, any options and
SOSARs scheduled to vest on or before the third anniversary of the retirement date vest immediately and any remaining
unvested options and SOSARs are terminated. Because our currently-outstanding options and SOSARs have a three year
vesting term, all unvested options and SOSARs held by retirement-eligible employees would vest upon the holder’s
retirement. Options and SOSARs vested on or before the holder’s retirement remain exercisable for a period of three
years following the holder’s retirement.
In the event the employment with us of a holder of performance shares terminates as a result of the holder’s retirement,
the performance shares will be paid out only upon satisfaction of the applicable performance condition, in a pro-rata
amount equal to the period of the holder’s service with us following the grant of the award as a percentage of the time
period from the grant of the award until satisfaction of the performance condition.
(5) Our Amended and Restated 2006 Stock Incentive Plan provides that, unless otherwise specified for an award under the
plan, if the employment of a holder of an award under the plan is terminated without cause or by the holder for good
reason within two years following a change in control as defined in the plan (in either case a “qualifying termination”),
the holder’s unvested awards will vest and become exercisable. This provision applies to our outstanding options and
SOSARs, and provides that such options and SOSARs will remain outstanding and exercisable for their full term.
A change in control would generally be deemed to occur under our Amended and Restated 2006 Stock Incentive Plan in
the event any person or group acquires shares of our common stock representing greater than 25 percent of the combined
voting power of our outstanding common stock, or in the event our current directors, or persons we nominate to replace
current directors, do not constitute at least a majority of our Board, or in the event of certain mergers, liquidations, or
sales of substantially all of our assets by us.
The award agreement for our outstanding shares of performance-contingent restricted stock provide that in the event of a
change in control under the plan, unless the performance-contingent restricted stock is replaced with an award meeting
the criteria described below under “—Equity Award Vesting Upon Change in Control,” the performance-contingent
restricted stock immediately vests. One of the provisions required to be included in a replacement award in order to avoid
vesting of the performance-contingent restricted stock immediately upon occurrence of a change in control is that the
replacement award must provide that if the employment of the holder is terminated without cause or due to death or
disability of the holder, or by the holder for good reason, in each case as defined in our Amended and Restated 2006
Stock Incentive Plan, the award will vest.
The award agreement for our outstanding performance shares provides that in the event of a change in control under the
plan that also constitutes a “change in the ownership or effective control of a corporation, or a change in the ownership of
a substantial portion of the assets of a corporation” under applicable U.S. Treasury Regulations, the performance shares
remain outstanding and vesting will accelerate in the event the employment of the holder is terminated without cause or
by the holder for good reason within two years following the change in control. In the event of a change in control under
the plan that also constitutes a “change in the ownership of a corporation” or a “change in the ownership of a substantial
portion of a corporation’s assets” under applicable U.S. Treasury Regulations, unless the performance shares are replaced
with an award meeting the criteria described below under “—Equity Award Vesting Upon Change in Control,” the
performance shares immediately vest. One of the provisions required to be included in a replacement award in order to
avoid vesting of the performance shares immediately upon occurrence of such a change in control is that the replacement
award must provide that if the employment of the holder is terminated without cause or due to death or disability of the
holder, or by the holder for good reason, in each case as defined in our Amended and Restated 2006 Stock Incentive
Plan, the award will vest.
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Proxy Statement