Chipotle 2009 Annual Report Download

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Table of contents

  • Page 1

  • Page 2
    ... performers working more efficiently while delivering exceptional food and outstanding customer service. By creating a culture that appeals only to high performers, we were able to increase our rate of internal promotions to manager from 60% at the beginning of 2009 to 85% at the end. We currently...

  • Page 3
    ...the aggregate market value of the registrant's outstanding common equity held by non-affiliates was $1.21 billion, based on the closing prices of the registrant's class A and class B common stock on June 30, 2009, the last trading day of the registrant's most recently completed second fiscal quarter...

  • Page 4
    ... Statements and Supplementary Data ...Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure ...Item 9A. Controls and Procedures ...Item 9B. Other Information ...PART III Item 10. Item 11. Item 12. Item 13. Item 14. Directors, Executive Officers and Corporate...

  • Page 5
    ... the food. We manage our operations and restaurants based on five regions that all report into a single segment. Financial information about our operations, including our revenues and net income for the years ended December 31, 2009, 2008, and 2007, and our total assets as of December 31, 2009 and...

  • Page 6
    ... a hurry. And while our restaurants often have lines, we try to serve customers as quickly as possible; we've even been able to serve more than 300 customers an hour at some locations. The natural flow of our restaurant layout, including the floor plan and the design of our serving 4 Annual Report

  • Page 7
    ...food made from ingredients typically found in fine dining restaurants. The Front Line is Key. Our restaurant and kitchen designs intentionally place crew members up front with customers to reinforce our focus on service. All of our restaurant employees are encouraged to have genuine 5 Annual Report

  • Page 8
    ...develop a wider array of skills. Consistent with our emphasis on customer service, we encourage our restaurant managers and crew members to welcome and interact with customers throughout the day. And although they may increase our labor costs, we believe that the benefits we provide to our employees...

  • Page 9
    ... new customers, we hired our first ever Chief Marketing Officer in January 2009. We also developed and introduced new logos, advertising and other branding elements in 2009. We continue to review our entire marketing strategy and messaging approach to make it more effective, and have developed new...

  • Page 10
    ...harm the value of our brand and adversely affect our business. Annual Report Information Systems Chipotle uses an integrated information system to manage the flow of information within each restaurant and between the restaurants and the corporate office. This system includes a point-of-sales local...

  • Page 11
    ...any forwardlooking statements after the date of this report as a result of new information, future events or developments, except as required by applicable laws and regulations. Annual Report Increasing our sales and profitability depends substantially on our ability to open new restaurants, which...

  • Page 12
    ... costs and prices we pay for the ingredients and other supplies we use; executing our strategies effectively, including our development strategy, our marketing and branding strategies, our initiatives to increase the speed at which our crew serves each customer, and expanded use of fax service lines...

  • Page 13
    ... results of operations. Our profitability depends in part on our ability to anticipate and react to changes in food and supply costs. Like all restaurant companies, we are susceptible to increases in food costs as a result of factors beyond our control, such as general economic conditions, seasonal...

  • Page 14
    ... to recruiting and training our restaurant managers and crew. Increased labor costs due to factors like competition, increased minimum wage requirements, employee benefits and any changes in our restaurant staffing structure would adversely impact our operating costs. Our success also depends in...

  • Page 15
    ... and quick-service segments of the restaurant industry also emphasize lower-cost, "value meal" menu options, a strategy we do not currently pursue. Our sales may be adversely affected by these products and price competition. Moreover, new companies may enter our markets and target our customers. For...

  • Page 16
    ... be successful. If new advertising, modified branding and other marketing programs do not drive increased restaurant sales, the expense associated with these programs will adversely impact our financial results, and we may not generate the levels of comparable restaurant sales we expect. Our Food...

  • Page 17
    ... lose customers and our sales may deteriorate. Our failure to manage our growth effectively could harm our business and operating results. Our plans call for a significant number of new restaurants. Our existing restaurant management systems, financial and management controls and information systems...

  • Page 18
    ... one or more of our menu items, that could have a significant adverse impact on our restaurant traffic and public perceptions of us, which would be harmful to our business. Similarly, our restaurant expansion strategy relies in part on the development of new retail centers and similar projects. Many...

  • Page 19
    ..., environmental laws. We may incur costs resulting from security risks we face in connection with our electronic processing and transmission of confidential customer information. We accept electronic payment cards for payment in our restaurants. During 2009, slightly more than half of our sales were...

  • Page 20
    ... various factors, including changes in comparable restaurant sales and customer visits, including as a result of declining consumer confidence or the introduction of new menu items; the timing of new restaurant openings and related revenues and expenses; operating costs at newly opened restaurants...

  • Page 21
    ... of trading days, that is, the number of days in a quarter when a restaurant is open. As a result of these factors, results for any one quarter are not necessarily indicative of results to be expected for any other quarter or for any year. Average restaurant sales or comparable restaurant sales in...

  • Page 22
    ... and our telephone number is (303) 595-4000. We lease our main office and substantially all of the properties on which we operate restaurants. For additional information regarding the lease terms and provisions, see Item 7. "Management's Discussion and Analysis of Financial Condition and Results of...

  • Page 23
    ... per share range of high and low sales prices for shares of our common stock for the quarterly periods indicated, as reported by the New York Stock Exchange ("NYSE"). Our common stock trades under the symbol "CMG." Prior to December 22, 2009, the common stock was known as "class A common stock." On...

  • Page 24
    ... fourth quarter of 2009. Total Number of Shares Purchased as Part of Average Price Paid Publicly Announced Per Share Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs(2) Total Number of Shares Purchased(1) Annual Report October ...November...

  • Page 25
    ... compared the total return of Chipotle common stock to the total return index for the Russell 2000. In 2009 we have chosen to include the S&P 500 in the comparisons as well because our market capitalization has become considerably larger than the average and median market capitalization of companies...

  • Page 26
    ... in Item 8. "Financial Statements and Supplementary Data". The data shown below are not necessarily indicative of results to be expected for any future period (in thousands, except per share data). 2009 For the years ended December 31, 2008 2007 2006 2005 Statements of Income: Total revenue ...Food...

  • Page 27
    ... accounted for a majority of our new restaurants, we expect that A Model locations will allow us to pursue additional opportunities and continue to open 120-130 restaurants next year. Sales Growth. Our comparable restaurant sales increases were 2.2% in 2009 and were driven primarily by menu price...

  • Page 28
    ... the recent financial turmoil, we have focused on capital preservation and our cash equivalent holdings consist of highly-rated money market funds or FDIC insured accounts. Stock Conversion. In December 2009, our shareholders approved a proposal to convert all of the outstanding shares of our class...

  • Page 29
    ... Annual Report Our results of operations as a percentage of revenue and period-over-period variances are discussed in the following section. As our business grows, as we open more restaurants and hire more employees, our restaurant operating costs increase. Restaurant Sales % increase % (decrease...

  • Page 30
    ...a percentage of revenue decreased due to the impact of menu price increases in selected markets partially offset by increased average wage rates and labor inefficiencies associated with new restaurant openings. Occupancy Costs % For the years ended increase December 31, 2009 over 2009 2008 2007 2008...

  • Page 31
    ... travel costs. As a percentage of revenue, general and administrative expenses decreased in 2009 due primarily to the impact of menu price increases and lower travel costs, partially offset by increased performance related bonus accruals and stock-based compensation. Annual Report The increase in...

  • Page 32
    ...the construction period and an increase in the number of restaurants opened. Pre-opening costs include non-cash straight-line rent expense of $4.4 million, $5.9 million and $4.6 million for 2009, 2008 and 2007, respectively. Loss on Disposal of Assets For the years ended December 31, 2009 % decrease...

  • Page 33
    ... Ended June 30 Sept. 30 Dec. 31 (dollars in millions) Annual Report Revenue ...Operating income ...Net income ...Number of restaurants opened in quarter ...Comparable restaurant sales increase ... $305.3 $340.8 $340.5 $345.3 $ 26.8 $ 38.3 $ 31.1 $ 27.8 $ 17.3 $ 24.5 $ 19.5 $ 16.9 28 49 20 39...

  • Page 34
    ...course of business and normal short-term working capital needs. As of December 31, 2009 there were no loans outstanding and available borrowings were $19.7 million. While operations continue to provide cash, our primary use of cash is in new restaurant development. Our total capital expenditures for...

  • Page 35
    ... areas of our operations affected by inflation are food, labor, fuel, utility costs, materials used in the construction of our restaurants, and insurance. Although almost all of our crew members make more than the minimum wage, increases in the applicable federal or state minimum wage may have an...

  • Page 36
    ... ingredients we use to prepare our food, as well as our packaging materials, are commodities or ingredients that are affected by the price of other commodities, exchange rates, foreign demand, weather, seasonality, production, availability and other factors outside our control. We work closely with...

  • Page 37
    ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Report of Independent Registered Public Accounting Firm ...Consolidated Balance Sheet as of December 31, 2009 and 2008 ...Consolidated Statement of Income for the years ended December 31, 2009, 2008 and ...

  • Page 38
    ... REGISTERED PUBLIC ACCOUNTING FIRM The Board of Directors and Shareholders of Chipotle Mexican Grill, Inc. We have audited the accompanying consolidated balance sheets of Chipotle Mexican Grill, Inc. (the "Company") as of December 31, 2009 and 2008, and the related consolidated statements of income...

  • Page 39
    ...Income tax payable ...Total current liabilities ...Deferred rent ...Deemed landlord financing ...Deferred income tax liability ...Other liabilities ...Total liabilities ...Shareholders' equity: Preferred stock, $0.01 par value, 600,000 shares authorized, no shares outstanding as of December 31, 2009...

  • Page 40
    CHIPOTLE MEXICAN GRILL, INC. CONSOLIDATED STATEMENT OF INCOME (in thousands, except per share data) 2009 Years ended December 31 2008 2007 Revenue: Restaurant sales ...Franchise royalties and fees ...Total revenue ...Restaurant operating costs (exclusive of depreciation and amortization shown ...

  • Page 41
    ... compensation ...52 Stock option exercises ...207 Excess tax benefit on option exercises, net of utilization of $177 ...Cumulative affect of change in accounting principle, net of income tax of $675 ...Comprehensive income: Net income ...Foreign currency translation adjustment ...- - 72,486 Total...

  • Page 42
    ...-for-sale securities ...Franchise acquisitions ...Net cash used in investing activities ...Financing activities Acquisition of treasury stock ...Proceeds from former parent company under tax sharing agreement ...Proceeds from option exercises ...Excess tax benefit on stock-based compensation...

  • Page 43
    ... in total revenue in the consolidated statement of income. Breakage recognized during the year ended December 31, 2009 was $878. In the year ended December 31, 2008, the Company completed the initial analysis of unredeemed electronic gift card liabilities and recognized $2,263 ($1,387 net of tax, or...

  • Page 44
    ... measured at fair market value using Level 1 inputs. Leasehold Improvements, Property and Equipment Leasehold improvements, property and equipment are stated at cost. Internal costs directly associated with the acquisition, development and construction of a restaurant are capitalized and were $6,916...

  • Page 45
    ... rent, wages, benefits and travel for the training and opening teams, food and other restaurant operating costs, are expensed as incurred prior to a restaurant opening for business. Insurance Liability The Company maintains various insurance policies including workers' compensation, employee health...

  • Page 46
    ...included in pre-opening costs in the consolidated income statement. Tenant incentives used to fund leasehold improvements are recorded in deferred rent and amortized as reductions of rent expense over the term of the lease. Additionally, certain of the Company's operating leases contain clauses that...

  • Page 47
    ... insured limits. Credit card transactions at our restaurant are processed by one service provider. Concentration of credit risk related to accounts receivables are limited, as the Company's receivables are primarily with its landlords for the reimbursements of tenant improvements. Subsequent Events...

  • Page 48
    ... (benefit) for income taxes are as follows: Years ended December 31 2009 2008 2007 Annual Report Current tax: U.S. Federal ...U.S. State ...Foreign ...Deferred tax: U.S. Federal ...U.S. State ...Foreign ...Valuation allowance ...Total provision for income taxes ...The effective tax rate differs...

  • Page 49
    ...Gift card liability ...Capitalized transaction costs ...Stock-based compensation and other employee benefits ...Foreign net operating loss carry-forwards ...Valuation allowance ...Total long-term deferred income tax asset ...Net long-term deferred income tax liability ...Current deferred income tax...

  • Page 50
    ... of the Board of Directors. 6. Stock Based Compensation The Chipotle Mexican Grill, Inc. 2006 Incentive Plan, as amended and restated, (the "Plan") was approved at the Company's annual meeting of shareholders on May 21, 2008. Under the Plan, 4,450 shares of common stock have been authorized...

  • Page 51
    ... 31, 2009, 119 of the outstanding non-vested stock awards were subject to both service and performance conditions based on reaching specified cumulative operating income levels during certain timeframes. During 2008, the Company replaced 120 previously issued non-vested time-based stock awards with...

  • Page 52
    ...2009 2008 2007 Risk-free interest rate ...Expected life (years) ...Expected dividend yield ...Volatility ...Weighted-average Black-Scholes fair value per share at date of grant ... 1.5% 3.1% 4.7% 4.2 4.8 5.0 0.0% 0.0% 0.0% 42% 35% 35% $18.85 $29.01 $24.80 Annual Report The risk-free interest rate...

  • Page 53
    ... a variety of marketing consulting services totaling $1,288 for the year ended December 31, 2009. 9. Leases The Company generally operates its restaurants in leased premises. Lease terms for traditional shopping center or building leases generally include combined initial and option terms of 20-25...

  • Page 54
    ... conditions were excluded from the 2009 and 2008 calculations of diluted EPS. The following table sets forth the computations of basic and dilutive earnings per share: Year ended December 31, 2009 2008 2007 Net income ...Shares: Weighted average number of common shares outstanding ...Dilutive stock...

  • Page 55
    ... Company's business, financial condition, results of operation or cash flows. 12. Quarterly Financial Data (Unaudited) Summarized unaudited quarterly financial data: March 31 June 30 2009 September 30 December 31 Annual Report Revenue ...Operating income ...Net income ...Basic earnings per share...

  • Page 56
    ... Executive Officers and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this annual report. Changes in Internal Control over Financial Reporting There were no changes during the fiscal quarter ended December 31, 2009...

  • Page 57
    ... Registered Public Accounting Firm The Board of Directors and Shareholders of Chipotle Mexican Grill, Inc. We have audited Chipotle Mexican Grill, Inc.'s (the "Company") internal control over financial reporting as of December 31, 2009, based on criteria established in Internal Control-Integrated...

  • Page 58
    ... performance shares. PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE Incorporated by reference from the definitive proxy statement for our 2010 annual meeting of shareholders, which will be filed no later than 120 days after December 31, 2009. ITEM 11. EXECUTIVE COMPENSATION...

  • Page 59
    ... AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE Incorporated by reference from the definitive proxy statement for our 2010 annual meeting of shareholders, which will be filed no later than 120 days after December 31, 2009. ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES Incorporated...

  • Page 60
    ... AND FINANCIAL STATEMENT SCHEDULES 1. All Financial statements Consolidated financial statements filed as part of this report are listed under Item 8. "Financial Statements and Supplementary Data." 2. Financial statement schedules No schedules are required because either the required information is...

  • Page 61
    ... been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature Date Title Annual Report /s/ STEVE ELLS Steve Ells February 19, 2010 Co-Chief Executive Officer and Chairman of the Board of Directors (principal executive officer...

  • Page 62
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  • Page 63
    ...meeting of shareholders of Chipotle Mexican Grill, Inc., which will be held on June 8, 2010 at 8:00 a.m. local time at The Westin Tabor Center, 1672 Lawrence Street, Denver, Colorado. Details of the business to be conducted at the annual meeting are given in the notice of meeting and proxy statement...

  • Page 64
    ... of the meeting. Information with respect to the above matters is set forth in the proxy statement that accompanies this notice. The record date for the meeting has been fixed by the Board of Directors as the close of business on April 9, 2010. Shareholders of record at that time are entitled...

  • Page 65
    ...contains information related to the annual meeting of shareholders of Chipotle Mexican Grill, Inc. to be held on Tuesday, June 8, 2010, beginning at 8:00 a.m. at The Westin Tabor Center, 1672 Lawrence Street, Denver, Colorado. This proxy statement was prepared under the direction of Chipotle's Board...

  • Page 66
    ...constitutes a quorum? Proxy Statement A quorum is necessary to conduct business at the annual meeting. At any meeting of our shareholders, the holders of a majority in voting power of our outstanding shares of common stock entitled to vote at the meeting, present in person or by proxy, constitutes...

  • Page 67
    ..., or enroll on the Investors page of our web site at www.chipotle.com. Delivering future notices by e-mail will help us reduce the cost and environmental impact of our annual meeting. Who is bearing the cost of this proxy solicitation? Proxy Statement We will bear the cost of preparing, assembling...

  • Page 68
    ... stock; each of the executive officers listed in the Summary Compensation Table appearing later in this proxy statement; each of our directors; and all of our current executive officers and directors as a group. The number of shares beneficially owned by each shareholder is determined under SEC...

  • Page 69
    ... T. Rowe Price Mid-Cap Growth Fund, Inc. (which owns 1,900,000 shares, representing 6.10 percent of the shares of common stock outstanding), which Price Associates serves as investment adviser with power to direct investments and/or sole power to vote the securities. For purposes of the reporting...

  • Page 70
    .... Class II directors whose terms expire at the 2010 annual meeting of shareholders and who are nominees for terms expiring at the 2013 annual meeting Director Since Proxy Statement Age Albert S. Baldocchi ... Mr. Baldocchi has been self-employed since 2000 as a financial consultant and strategic...

  • Page 71
    ... LLP, a law firm, and from 1981 to 1994, served in various capacities at Syntex Corporation, a pharmaceutical company. Mr. Flanzraich's past executive experience helped him develop outstanding skills in leading and managing strong teams of employees, and in oversight of the growth and financing of...

  • Page 72
    Class III directors whose terms expire at the 2011 annual meeting of shareholders Age Director Since John S. Charlesworth ... Mr. Charlesworth is currently the sole owner/ member of Hunt Business Enterprises LLC and EZ Street LLC, which own commercial properties and own and operate car care ...

  • Page 73
    Class I directors whose terms expire at the 2012 annual meeting of shareholders Age Director Since Steve Ells ... Mr. Ells founded Chipotle in 1993. He is Co-Chief Executive Officer and was appointed Chairman of the Board in 2005. Prior to launching Chipotle, Mr. Ells worked for two years at ...

  • Page 74
    ... on the Investors page of our corporate website at www.chipotle.com under the Corporate Governance link. Audit Committee In accordance with its charter, the Audit Committee acts to (a) oversee the integrity of our financial statements, system of internal controls, risk management and compliance...

  • Page 75
    ... our company and executive officers to allow it to offer objective advice. The Compensation Committee held five meetings in 2009 and acted by written consent four times. The members of the committee are Ms. Friedman (Chairperson) and Mr. Flynn. A report of the Compensation Committee is found under...

  • Page 76
    ... succession plans for positions held by executive officers. The Nominating and Corporate Governance Committee held three meetings in 2009. The members of the committee are Mr. Flynn (Chairperson) and Ms. Friedman. Proxy Statement Director Compensation Directors who are also employees of Chipotle...

  • Page 77
    ... of our business and strategy. The Lead Director chairs Board meetings during any sessions conducted as executive sessions without employee members of management being present, and also consults with the Chairman, the Co-Chief Executive Officers and the Chief Financial Officer on 13 Proxy Statement

  • Page 78
    ... management at the end of each regularlyscheduled Board meeting during 2009. Mr. Baldocchi, as Lead Director, chaired the non-employee executive sessions of the Board held during 2009. The Board expects to conduct an executive session limited to non-employee Board members at each regularly-scheduled...

  • Page 79
    ...increase in the number of directors). Policies and Procedures for Review and Approval of Transactions with Related Persons We recognize that transactions in which our executive officers, directors or principal shareholders, or family members or other associates of our executive officers or directors...

  • Page 80
    ... internal control over financial reporting). The Audit Committee's oversight of risk management includes its review each year of an annual risk assessment conducted by our internal audit department, which functionally reports to the Audit Committee. The Audit Committee also recommends from time to...

  • Page 81
    ... PUBLIC ACCOUNTING FIRM The Audit Committee has engaged Ernst & Young LLP as independent auditors to audit our consolidated financial statements for the year ending December 31, 2010 and to perform other permissible, pre-approved services. The committee has adopted a policy which sets out procedures...

  • Page 82
    ...described above, the Audit Committee recommended to our Board of Directors that our audited financial statements be included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2009 for filing with the SEC. The Audit Committee: Albert S. Baldocchi, Chairperson Neil W. Flanzraich...

  • Page 83
    ... up to six months prior to commencement of the services. The committee periodically reviews a schedule of fees paid and payable to the independent auditor by type of covered service being performed or expected to be provided. Our Chief Financial Officer is also required to report to the committee...

  • Page 84
    ... Chipotle after spending 18 years at McDonald's where he held a variety of management positions, most recently as Vice President and Chief Financial Officer of its Partner Brands Group. Mr. Hartung has a Bachelor of Science degree in accounting and economics as well as an MBA from Illinois State...

  • Page 85
    ... that this ensures that compensation packages for our executive officers are structured in a manner rewarding superior operating performance and the creation of shareholder value. The restaurant peer group used for these purposes is comprised of all publicly-traded companies in the Global Industry...

  • Page 86
    ... the market. Individual targeted amounts can also be increased or decreased based on individual considerations such as level of responsibility, experience and internal equity issues. Following completion of our year-end financial statements and each executive officer's annual performance evaluation...

  • Page 87
    ... of our employees, including our executive officers, with those of our shareholders, and closely tie rewards to corporate performance because these awards do not offer value unless our stock price increases. We also believe that the terms the committee has set for our SOSARs and stock options strike...

  • Page 88
    ... to, the executive officers in February of each year. In making these decisions, the committee references our company performance primarily by comparing our sales growth, net income growth and total shareholder return over the preceding three-year period to the same measures for the restaurant peer...

  • Page 89
    ... Officer in January 2009, based on the recommendations of the Co-Chief Executive Officers and the committee's review of market levels of compensation for this role. In addition, in order to persuade Mr. Crumpacker to leave a successful firm of which he was co-founder and co-owner to join us in a new...

  • Page 90
    ..., which further promotes accountability. We believe that as a whole, this structure results in the AIP rewarding our top performers, consistent with our goal of building shareholder value. To determine the company and team performance factors for each year, during the first quarter of the year the...

  • Page 91
    ... set at the regional level consistent with the scales reflected above for the company performance factor. We do not disclose operating results on a region-by-region basis. The measures used for the development department's team performance factor were new restaurant average daily sales and new weeks...

  • Page 92
    ...above. The operating and financial performance targets and key initiatives to be used to determine the company and team performance factors for 2010 were set at or above the levels included in the internal projections we relied on in issuing publicly-stated guidance regarding our company performance...

  • Page 93
    ... to each executive officer was based on the economic value of the awards, with the precise award levels varying to take into account the committee's review of each executive officer's performance for the prior year, the individual's position, and the survey data on competitive market practice. As...

  • Page 94
    ... applicable tax laws and regulations, as well as other factors beyond our control. In addition, the committee's primary objective in designing executive compensation programs is to support and encourage the achievement of our company's strategic goals and to enhance long-term shareholder value. For...

  • Page 95
    ... and Analysis-Discussion of Executive Officer Compensation Decisions-Annual Incentives-2009 AIP Payouts & Discretionary Bonuses." Name and Principal Position Stock Bonus(1) Awards(2) Non-Equity Option Incentive Plan All Other Awards(3) Compensation(4) Compensation(5) Year Salary Total Steve...

  • Page 96
    ... Officer Compensation Decisions-Annual Incentives-AIP Structure" and "-2009 AIP Payouts & Discretionary Bonuses." (5) Amounts under All Other Compensation for 2009 include the following: • Matching contributions we made on the executive officers' behalf to the Chipotle Mexican Grill 401(K) plan...

  • Page 97
    ... and Restated Chipotle Mexican Grill, Inc. 2006 Stock Incentive Plan. Proxy Statement Terms of 2009 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...

  • Page 98
    ...this level of growth will require continued strong execution of our long-term growth plans, while preserving the profitability of our existing restaurants. Payout of the award requires that Mr. Crumpacker serve as our employee or as a non-employee member of our Board at all times from the grant date...

  • Page 99
    ... the closing price of our Class A common stock on April 15, 2009, the vesting date, of $74.54 per share. NON-QUALIFIED DEFERRED COMPENSATION FOR 2009 Our Supplemental Deferred Investment Plan permits eligible management employees who elect to participate in the plan, including our executive officers...

  • Page 100
    ... in respect of our executive officers are attributable in part to service as one of our employees. The table below presents each executive officer's aggregate earnings under and aggregate withdrawals from the McDonald's plans during 2009, as well as each executive officer's aggregate ending balances...

  • Page 101
    ... the equity-based awards made to our executive officers do provide for post-employment benefits in certain circumstances. The table below reflects the dollar value, based on the closing price of our common stock on December 31, 2009, of the amount of each listed type of equity award which would have...

  • Page 102
    ... 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 SOSARs granted in 2009 provides that in the event of a change in control...

  • Page 103
    ...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. Term life insurance policies maintained by us pay to the estate of any salaried employee, in the event of the...

  • Page 104
    In the event of a change in control under the plan as of December 31, 2009, if the outstanding 2009 SOSARs were not replaced with a replacement award meeting the criteria specified above, the executive officers would have had vesting accelerated on awards with the following dollar values as of ...

  • Page 105
    ... be listed on a national securities exchange, or (iii) the date the holder experiences a qualifying termination as defined in our Amended and Restated 2006 Stock Incentive Plan. • Proxy Statement • In the event of a change in control under the plan as of December 31, 2009, if the outstanding...

  • Page 106
    ... 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...

  • Page 107
    ...Sequence totaling $1.29 million for services during 2009. 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...

  • Page 108
    ..., and any reports of beneficial ownership of our common stock filed by executive officers, directors and beneficial owners of more than 10 percent of the outstanding shares of either class of our common stock are posted on and may be obtained on the Investors page of our website at www.chipotle.com...

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  • Page 111
    ... IVAX Corporation; Private Investor Patrick J. Flynn Director Executive Vice President, Strategic Planning and Acquisitions, McDonald's Corp. (retired) Darlene J. Friedman Director Senior Vice President, Human Resources, Syntex Corp. (retired) STOCK EXCHANGE LISTING New York Stock Exchange Symbol...

  • Page 112
    This cover was printed on 100% recycled paper containing 30% post-consumer waste and the narrative was printed on 100% recycled paper with 10% post-consumer waste.