Chipotle 2009 Annual Report Download - page 103

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.
(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.
Term life insurance policies maintained by us pay to the estate of any salaried employee, in the event of the employee’s death, an amount
equal to two times the employee’s base salary at the time of his or her death, up to a maximum of $1,000,000, with additional amounts
payable in the event the death is accidental. These policies carry an additional benefit for the executive officers only, providing that if the
accidental death occurs while the officer is traveling on business for us there is an additional benefit payable equal to $350,000. This
amount is not reflected in the table above.
(7) The dollar values reflected in the table are based on the excess of the closing price of our common stock on December 31, 2009 over the
exercise price of the applicable options or SOSARs. The terms of stock options granted in 2006, including options held as of
December 31, 2009 by Mr. Hartung which were vested as of that date, 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, none of which were vested as of December 31, 2009, 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.
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.
2009 SOSARs
The award agreement for SOSARs granted in 2009 provides that in the event of a change in control under
our Amended and Restated 2006 Stock Incentive Plan, any unvested SOSARs will automatically vest as of the
date of the change in control, unless the SOSARs are replaced with an award meeting the following criteria:
• the replacement award must be denominated in securities listed on a national securities exchange;
• the replacement award must have a value equal to the SOSARs being replaced, including an aggregate
exercise or base price equal to the aggregate base price of such SOSARs, an aggregate spread equal to
the aggregate spread of such SOSARs as determined immediately prior to the relevant change in
control, and a ratio of exercise price or base price to the fair market value of the securities subject to
such replacement award that is equal to the ratio of base price of such SOSARs to the price of our
common stock at the time of the change in control;
• the vesting date(s) of the replacement award must be the same as the vesting date(s) of the
performance-contingent restricted stock, 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; 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
character to a change in control as defined in our Amended and Restated 2006 Stock Incentive Plan, or
upon the securities constituting such replacement award ceasing to be listed on a national securities
exchange.
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Proxy Statement