assets measured as of our most recent balance sheet date; and (ii) the number of shares subject to Options granted under the Option Plan may not exceed 15% of the number of shares outstanding,
measured at our most recent balance sheet date.
options granted under the Option Plan have an exercise price at least equal to the fair market value of the underlying stock on the date of grant, and a term of five years and six
months, subject to earlier termination in the event of the termination of a participant's employment with us. Under the Option Plan, we or McDonald's (so long as it continues to own at least 50% of
the our then-outstanding shares) may elect to repurchase any or all of the outstanding options for a cash payment equal to their value at the time of repurchase and/or to terminate the
We currently intend that options granted under the Option Plan prior to this offering will remain outstanding in accordance with their terms as adjusted to take into account this
offering. Following the offering, such options will be in respect of class A shares. We do not intend to grant additional options under the Option Plan following the consummation of this
Under the Chipotle Stock Appreciation Rights Plan (the "SAR Plan"), our compensation committee has granted stock appreciation rights ("SARs") relating to our
common stock to key employees who are employed in job classification A, B, C or D. Each outstanding SAR represents the right to receive a cash award equal to the appreciation in value of a
share of common stock over a base "exercise" price. The exercise price of each SAR granted under the SAR Plan is at least equal to the fair market value of a share of common stock at the time of
grant. Upon exercise of a SAR, a participant is entitled to receive a cash payment equal to the excess of the fair market value of a share of common stock on the date of exercise over the exercise
price of the SAR. The SAR Plan was adopted on July 14, 2004.
Under the terms of the SAR Plan, upon the occurrence of an initial public offering of our common stock, the compensation committee or our board of directors, as the case may be, may
elect to make adjustments to our outstanding SARs. In connection with this offering, we intend, subject to approval by the compensation committee, to convert all of our outstanding
cash-settled SARs into stock options to purchase class A shares. As a result, upon exercise of a SAR an employee will be entitled to receive shares of our class A common
stock instead of receiving a cash payment. We intend that the shares issued upon exercise of the converted SARs will be issued under the new 2006 Incentive Plan (described below) that we intend to
adopt. No changes will be made to the exercise prices or number of SARs currently outstanding in connection with the conversion of the SARs from cash-settled rights to options, other than
any changes needed to take into account the Reclassification.
do not intend to issue additional awards under the SAR plan following this offering.
General. Prior to this offering, we expect that McDonald's, as our majority shareholder, will approve, contingent on the
offering occurring and on adoption by our board of directors, the Chipotle Mexican Grill, Inc. 2006 Stock Incentive Compensation Plan (the "2006 Incentive Plan"). We anticipate that the 2006
Incentive Plan will be administered by our compensation committee or such other committee as our board of directors will appoint from time to time to administer and to otherwise exercise and perform
the authority and functions assigned to such committee (the "Committee").
purpose of the 2006 Incentive Plan is to promote our interests and the interests of our shareholders by providing our employees and our non-employee directors, who
collectively are responsible for the management, growth and protection of our business, with incentives and rewards to encourage them to continue in our service. The 2006 Incentive Plan is designed to
meet this purpose by providing these employees and eligible non-employee directors with a proprietary interest in pursuing our long-term growth, profitability and financial