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SEC Filings

CHIPOTLE MEXICAN GRILL INC filed this Form S-1/A on 12/05/2005
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of 2005. Mr. Moran ceased to be a member of M&R in March 2005. During the period from January 1, 2005 to the date of Mr. Moran's departure from M&R, we paid M&R about $0.8 million for legal services. We continue to employ M&R as legal counsel.

Relationships with Franchisees

        Each of our three franchisees, who in aggregate operate eight of our stores, is also a McDonald's franchisee. We granted our initial franchises in April 2001 for two-year terms including leases for store property and equipment, and subsequently granted additional franchises with ten-year terms to qualified franchisees. Each franchise includes the right to operate a Chipotle store at a particular address only. At the end of a franchise term, the franchise expires, and the franchisee has no unilateral right to renew or extend the franchise (although we may agree with the franchisee to extend the franchise for an additional term). Each franchisee is obligated to operate franchised stores in accordance with our operating standards and is obligated to allocate and spend specific amounts, as specified by us, on marketing of the stores, subject to our approval of all marketing materials. In addition, if McDonald's ceases to own a majority of our outstanding voting common stock or if we cease to be an affiliate of McDonald's, under the terms of our franchise agreements, our franchisees must either sell either their Chipotle franchise to someone who agrees to perform their obligations under the franchise agreements (at fair market value determined in the manner provided in the franchise agreements) or sell their McDonald's franchise within 24 months after the relevant triggering event. If our franchisees don't sell either franchise within the 24-month period, their franchise agreements with McDonald's will terminate automatically.

Registration Rights

        Prior to the consummation of this offering, McDonald's and certain of our directors, managers and current shareholders (the "Initial Shareholders") will enter into a registration rights agreement with us relating to the shares of common stock they hold (including shares issuable upon the exercise of outstanding options). Subject to several exceptions, including our right to defer a demand registration under certain circumstances, McDonald's will have the right to require us to register for public resale under the Securities Act all shares of common stock that they request be registered at any time after the expiration of the lock-up period following this offering. McDonald's will have the right to demand several such registrations. The Initial Shareholders other than McDonald's are entitled to piggyback registration rights with respect to any registration request made by McDonald's, subject to customary restrictions and pro rata reductions in the number of shares to be sold in an offering. In addition, the Initial Shareholders have been granted piggyback rights on any registration for our account or the account of another shareholder. We would be responsible for the expenses of any such registration.

Shareholders' Agreement

        We are party to a shareholders' agreement with all of our shareholders. The shareholders' agreement, among other matters:

    restricts the transfer by our management shareholders of our common shares, subject to certain exceptions, and provides that all transferees must become a party to the shareholders' agreement;

    grants first to holders of our Series B Preferred Stock and then to us, certain rights of first refusal with respect to transfers of our common shares to third parties by our management shareholders;

    grants to holders of our Series B Preferred Stock and to our management shareholders, certain rights of first refusal with respect to any new shares that we may issue;

    grants to each of our management shareholders, the right to require McDonald's to purchase a minimum amount of such management shareholder's shares on specific dates provided for in the shareholder's agreement; and


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