Chipotle 2012 Annual Report Download - page 120

(1) Assumes the absence of a change in control as described in further detail in footnote 3 below.
(2) Certain outstanding equity awards provide that the holder is eligible for retirement when the employee
reaches a combined age and years-of-service with us of 70. Years-of-service with us includes service with
McDonald’s Corporation while it was our majority shareholder, unless there was a break in service prior to
joining us from McDonald’s, and for awards made to Mr. Moran after 2011, also includes Mr. Moran’s
period of service as our outside General Counsel. Of the executive officers, only Mr. Hartung and
Mr. Blessing are currently eligible for retirement.
In the event the employment of a holder of 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,
service-based vesting conditions on the SOSARs are deemed satisfied immediately. In such event, SOSARs
subject to performance conditions remain outstanding and subject to vesting based on achievement of the
performance conditions, and SOSARs without performance conditions are immediately vested. All such
SOSARs remain outstanding and exercisable (following vesting) for the original duration of the SOSAR.
The amounts reflected in the table as realizable upon retirement in respect of SOSARs does not reflect any
amounts in respect of SOSARs with performance conditions due to the ongoing vesting conditions that
would be in effect at the time of 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 on the payout date, with the number of shares issuable to
be based on actual performance over the performance period and pro-rated in an 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 the end of the performance period. The amounts reflected in the table as realizable
in respect of the performance shares as a result of the retirement of the retirement-eligible officers assumes
that the performance shares actually paid out at target.
(3) The award agreements for SOSARs provide that in the event of a change in control under our 2011 Stock
Incentive Plan, unless the SOSARs are replaced with an award meeting the criteria described below under
“—Equity Award Vesting Upon Change in Control,” the SOSARs immediately vest. One of the provisions
required to be included in a replacement award in order to avoid vesting of the SOSARs 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 by the holder for good reason, in each case as defined in the plan, the
award will vest.
A change in control would generally be deemed to occur under the 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 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 (with payout at
target level performance) 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 at target
level performance. 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
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