Chipotle 2013 Annual Report Download - page 136

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 in connection with Mr. Hartung’s retirement assumes that the
performance shares actually paid out at target. These amounts would not be realizable until following
completion of the performance period.
(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
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 2011 Stock
Incentive Plan, the award will vest.
(4) In the event the employment with us of a holder of SOSARs granted prior to 2012, or a holder of SOSARs
without performance conditions granted in 2012 and thereafter, 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 SOSARs will vest and become immediately exercisable, and 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 SOSARs subject to performance conditions granted in
2012 and thereafter terminates as a result of the holder’s death or disability, service-based vesting conditions
on such SOSARs are deemed satisfied immediately. In such event, the SOSARs remain outstanding and
subject to vesting based on achievement of the performance conditions, with vesting to be prorated for the
time period of the holder’s service prior to death and disability as a proportion of the period from the grant
date to the satisfaction of the performance condition. The amounts reflected in the table as realizable upon
death or disability in respect of SOSARs reflects amounts attributable to the portion of SOSARs granted in
2011 and 2012 subject to performance conditions for which the performance conditions were satisfied as of
December 31, 2013, notwithstanding that the Compensation Committee had not yet certified the satisfaction
of the performance conditions as of that date as is required for the awards to vest, but does not reflect any
amounts in respect of performance SOSARs for which the performance conditions were not yet satisfied as
of December 31, 2013, due to the ongoing vesting conditions that would be in effect at the time of the
holder’s death or disability.
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Proxy Statement