Chipotle 2008 Annual Report Download - page 104

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(6) In the event the employment with us of a holder of options, SOSARs or an award of performance-contingent restricted
stock terminates as a result of the holder’s death or disability (that is, a medically diagnosed permanent physical or
mental inability to perform his or her job), all of the holder’s unvested options, SOSARs and performance-contingent
restricted stock will vest, and such options and SOSARs will become immediately exercisable. In addition, the options
and SOSARs will remain outstanding and exercisable for a period of three years following the holder’s death or
disability.
In the event the employment with us of a holder of performance shares terminates as a result of the holder’s death or
disability, 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.
(7) The terms of stock options granted prior to 2007, including options held by the executive officers, allow post-termination
exercise of vested options for a period of 30 days following the optionholder’s voluntary termination of his or her
employment, unless otherwise specified in the footnotes above. Options and SOSARs granted in 2007 and thereafter
allow post-termination exercise of vested awards for a period of 90 days following the holder’s voluntary termination of
his or her employment, unless otherwise specified above. The dollar values reflected in the table are based on the excess
of the closing price of our Class A common stock on December 31, 2008 over the exercise price of the option or SOSAR.
Equity Award Vesting Upon Change in Control
In addition to the provisions described above relating to equity-based awards for which vesting may
accelerate in connection with a termination of the holder’s employment, our outstanding performance shares and
performance-contingent restricted stock awards have provisions providing for the acceleration of vesting in
connection with certain changes in control of Chipotle.
Performance Shares
The award agreement for our outstanding performance share awards provide 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 share awards remain outstanding and vesting will only 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, the performance share awards immediately vest unless they are replaced with an
award meeting the following criteria:
• the replacement award must consist of securities listed on a national securities exchange;
• the replacement award must have a value equal to the value of the unvested performance share award,
calculated as if each unvested share were exchanged for the consideration (including all stock, other
securities or assets, including cash) payable for one share of Class A common stock in the change in
control transaction;
• the vesting date of the replacement award must be March 1, 2011, unless the change in control is after
that date but prior to March 1, 2012 (the expiration date of the award), in which case the vesting date
must be March 1, 2012, subject to full acceleration of vesting of the replacement award in the event
that the holder’s employment is terminated by the surviving or successor entity without cause or by the
holder for good reason, in each case as defined in our Amended and Restated 2006 Stock Incentive
Plan, or the holder’s employment terminates due to the holder’s medically diagnosed permanent
physical or mental inability to perform his or her job duties; and
• the replacement award must provide for immediate vesting upon any transaction with respect to the
surviving or successor entity (or parent or subsidiary company thereof) of substantially similar
41
Proxy Statement