Chipotle 2013 Annual Report Download - page 99

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Corporate Governance Aspects of the 2011 Stock Incentive Plan
The 2011 Stock Incentive Plan includes several provisions that promote best practices by reinforcing
alignment with shareholders’ interests. These provisions include, but are not limited to, the following:
•No Discounted Options or Stock Appreciation Rights: Stock options and stock appreciation rights may
not be granted with exercise prices lower than the market value of the underlying shares on the grant
date.
•No Repricing without Shareholder Approval: Other than in connection with corporate reorganizations
or restructurings, at any time when the purchase price of a stock option or stock appreciation right is
above the market value of a share, Chipotle will not, without shareholder approval, reduce the purchase
price of such stock option or stock appreciation right and will not exchange such stock option or stock
appreciation right for a new award with a lower (or no) purchase price or for cash.
•No Liberal Share Recycling: Shares used to pay the exercise price or withholding taxes related to an
outstanding stock option or stock appreciation right, unissued shares resulting from the net settlement
of any such equity awards, and shares purchased by us in the open market using the proceeds of option
exercises do not become available for issuance as future equity awards under the 2011 Stock Incentive
Plan. As discussed above, if this proposal is approved, the portion of a Full Value Award used for tax
withholding will be added back to the share reserve under the amended and restated plan.
•No Transferability: Equity awards generally may not be transferred, except by will or the laws of
descent and distribution, unless approved by the Compensation Committee.
•No Evergreen Provision: The 2011 Stock Incentive Plan does not contain an “evergreen” feature
pursuant to which the shares authorized for issuance under the 2011 Stock Incentive Plan can be
automatically replenished.
•No Automatic Grants: The 2011 Stock Incentive Plan does not provide for automatic grants to any
participant.
•No Tax Gross-ups: The 2011 Stock Incentive Plan does not provide for any tax gross-ups.
Key Terms of the 2011 Stock Incentive Plan
Eligible Persons
Currently, executive officers, officers, other employees, and non-employee directors of our Company and
our subsidiaries are eligible to participate in the Plan. As discussed above, the amendment and restatement adds
consultants and advisors as eligible persons subject to shareholder approval. As of March 17, 2014, this group
includes seven non-employee directors and approximately 48,497 employees, consultants and advisors, including
our four executive officers.
Types of Awards
The 2011 Stock Incentive Plan authorizes the Compensation Committee to grant non-qualified and incentive
stock options, stock appreciation rights and Full Value Awards, including restricted stock, restricted stock units,
performance shares, deferred share units, phantom stock or share-denominated performance units. No grants of
equity awards are permitted under the 2011 Stock Incentive Plan after March 16, 2021.
Share Reserve
The initial share reserve was 3,360,000 shares and, if the amendment is approved by shareholders, would be
increased by 2,600,000 shares. As of March 17, 2014, 1,416,274 shares remained authorized but unissued under
the plan; as a result, if this proposal is approved, a total of 4,016,274 shares would have been available for
27
Proxy Statement