Exhibit 10.2

AMENDED AND RESTATED

CHIPOTLE MEXICAN GRILL, INC.

2006 STOCK INCENTIVE PLAN

(As Adopted May 21, 2008)

 

1. Purpose of the Plan

This Chipotle Mexican Grill, Inc. Amended and Restated 2006 Stock Incentive Plan
is intended to promote the interests of the Company and its shareholders by
providing the employees of the Company and eligible non-employee directors of
Chipotle, who are largely responsible for the management, growth and protection
of the business of the Company, with incentives and rewards to encourage them to
continue in the service of the Company. The Plan is designed to meet this intent
by providing such employees and eligible non-employee directors with a
proprietary interest in pursuing the long-term growth, profitability and
financial success of the Company.

 

2. Definitions

As used in the Plan or in any instrument governing the terms of any Incentive
Award, the following definitions apply to the terms indicated below:

(a) “Board of Directors” means the Board of Directors of Chipotle.

(b) “Cause” means, when used in connection with the termination of a
Participant’s employment with the Company, unless otherwise provided in the
Participant’s award agreement with respect to an Incentive Award or effective
employment agreement or other written agreement with respect to the termination
of a Participant’s employment with the Company, the termination of the
Participant’s employment with the Company on account of: (i) a failure of the
Participant to substantially perform his or her duties (other than as a result
of physical or mental illness or injury); (ii) the Participant’s willful
misconduct or gross negligence which is materially injurious to the Company;
(iii) a breach by a Participant of the Participant’s fiduciary duty or duty of
loyalty to the Company; (iv) the Participant’s unauthorized removal from the
premises of the Company of any document (in any medium or form) relating to the
Company or the customers of the Company; or (v) the commission by the
Participant of any felony or other serious crime involving moral turpitude. Any
rights the Company may have hereunder in respect of the events giving rise to
Cause shall be in addition to the rights the Company may have under any other
agreement with the Participant or at law or in equity. If, subsequent to a
Participant’s termination of employment, it is discovered that such
Participant’s employment could have been terminated for Cause, the Participant’s
employment shall, at the election of the Committee, in its sole discretion, be
deemed to have been terminated for Cause retroactively to the date the events
giving rise to Cause occurred.

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(c) “Change in Control” means the occurrence of any of the following:

(i) Any Person becoming the beneficial owner (within the meaning of Rule 13d-3
promulgated under the Exchange Act, a “Beneficial Owner”) of twenty-five percent
or more of the combined voting power of Voting Securities; provided, however
that a Change in Control shall not be deemed to occur by reason of an
acquisition of Voting Securities by the Company or by an employee benefit plan
(or a trust forming a part thereof) maintained by the Company; and provided,
further that a Change in Control shall not be deemed to occur solely because any
Person becomes the Beneficial Owner of twenty-five percent or more of the
outstanding Voting Securities (A) in connection with a Business Combination that
is not a Change in Control pursuant to sub-clause (iii), below, or (B) as a
result of the acquisition of Voting Securities by the Company which, by reducing
the number of Voting Securities deemed to be outstanding, increases the
proportional number of shares Beneficially Owned by such Person, except that a
Change in Control shall occur if a Change in Control would have occurred (but
for the operation of this proviso) as a result of the acquisition of Voting
Securities by the Company, and after such acquisition such Person becomes the
Beneficial Owner of any additional Voting Securities following which such Person
is the Beneficial Owner of twenty-five percent or more of the outstanding Voting
Securities;

(ii) The individuals who, as of March 19, 2008, are members of the Board of
Directors (the “Incumbent Board”), cease for any reason to constitute at least a
majority of the members of the Board of Directors; provided, however that if the
election or appointment, or nomination for election by Chipotle’s common
stockholders, of any new director was approved by a vote of at least two-thirds
of the Incumbent Board, such new director shall, for purposes of the Plan,
thereafter be considered as a member of the Incumbent Board; provided, further,
however, that no individual shall be considered a member of the Incumbent Board
if such individual initially assumed office as a result of an actual or
threatened solicitation of proxies or consents by or on behalf of a Person other
than the Board of Directors (a “Proxy Contest”) including by reason of any
agreement intended to avoid or settle any Proxy Contest; or

(iii) The consummation of:

(A) A merger, consolidation, reorganization or similar transaction (any of the
foregoing, a “Business Combination”) with or into the Company or in which
securities of Chipotle are issued, unless such Business Combination is a
Non-Control Transaction.

(B) A complete liquidation or dissolution of the Company; or

(C) The sale or other disposition of all or substantially all of the assets of
the Company (on a consolidated basis) to any Person other than the Company or an
employee benefit plan (or a trust forming a part thereof) maintained by the
Company or by a Person which, immediately thereafter, will have all its voting
securities owned by the holders of the Voting Securities immediately prior
thereto, in substantially the same proportions.

 

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For purposes of the Plan, a “Non-Control Transaction” is Business Combination
involving the Company where:

(A) the holders of Voting Securities immediately before such Business
Combination own, directly or indirectly immediately following such Business
Combination more than fifty percent of the combined voting power of the
outstanding voting securities of the parent corporation resulting from, or
issuing its voting securities as part of, such Business Combination (the
“Surviving Corporation”) in substantially the same proportion as their ownership
of the Voting Securities immediately before such Business Combination by reason
of their prior ownership of Voting Securities,

(B) the individuals who were members of the Incumbent Board immediately prior to
the execution of the agreement providing for such Business Combination
constitute a majority of the members of the board of directors of the Surviving
Corporation, or a corporation beneficially owning a majority of the voting
securities of the Surviving Corporation, and

(C) no Person other than the Company or any employee benefit plan (or any trust
forming a part thereof) maintained immediately prior to such Business
Combination by the Company or any of its Subsidiaries immediately following the
time at which such transaction occurs, is a Beneficial Owner of twenty-five
percent or more of the combined voting power of the Surviving Corporation’s
voting securities outstanding immediately following such Business Combination.

Notwithstanding the foregoing, a Change in Control shall not be deemed to occur
as a result of any event or transaction to the extent that treating such event
or transaction as a Change in Control would cause any tax to become due under
Section 409A of the Code.

(d) “Chipotle” means Chipotle Mexican Grill, Inc., a Delaware corporation, and
any successor thereto.

(e) “Code” means the Internal Revenue Code of 1986, as amended from time to
time, and all regulations, interpretations and administrative guidance issued
thereunder.

(f) “Committee” means the Compensation Committee of the Board of Directors or
such other committee as the Board of Directors shall appoint from time to time
to administer the Plan and to otherwise exercise and perform the authority and
functions assigned to the Committee under the terms of the Plan.

(g) “Common Stock” means Chipotle’s Class A Common Stock, $0.01 par value per
share, or any other security into which the common stock shall be changed
pursuant to the adjustment provisions of Section 9 of the Plan.

(h) “Company” means Chipotle and all of its Subsidiaries, collectively.

 

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(i) “Covered Employee” means a Participant who at the time of reference is a
“covered employee” as defined in Section 162(m) of the Code and the regulations
promulgated thereunder.

(j) “Director” means a member of the Board of Directors who is not at the time
of reference an employee of the Company.

(k) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

(l) “Fair Market Value” or “FMV” as of any date means, unless otherwise
expressly provided in the Plan, the closing sale price of a share of Common
Stock on the New York Stock Exchange (“NYSE”) (or such other national securities
exchange as may at the time be the principal market for the Common Stock) on
that date or, if no sale of the Company’s Common Stock occurred on that date, on
the next preceding day on which a sale of Common Stock occurred. If the Common
Stock is not then listed and traded on the NYSE or other national securities
exchange, Fair Market Value shall be what the Committee determines in good faith
to be 100% of the fair market value of a share of Common Stock on that date,
using such criteria as it shall determine, in its sole discretion, to be
appropriate for valuation.

(m) “Good Reason” means, unless otherwise provided in any award agreement
entered between the Company and the Participant with respect to an Incentive
Award or effective employment agreement or other written agreement between the
Participant and the Company with respect to the termination of a Participant’s
employment with the Company, the Participant’s termination of employment on
account of: (i) a material diminution in a Participant’s duties and
responsibilities other than a change in such Participant’s duties and
responsibilities that results from becoming part of a larger organization
following a Change in Control, (ii) a decrease in a Participant’s base salary,
bonus opportunity or benefits other than a decrease in bonus opportunity or
benefits that applies to all employees of the Company otherwise eligible to
participate in the affected plan or (iii) a relocation of a Participant’s
primary work location more than 30 miles from the Participant’s work location on
the date of grant of a Participant’s Incentive Awards under the Plan, without
the Participant’s prior written consent; provided that, within thirty days
following the occurrence of any of the events set forth herein, the Participant
shall have delivered written notice to the Company of his or her intention to
terminate his or her employment for Good Reason, which notice specifies in
reasonable detail the circumstances claimed to give rise to the Participant’s
right to terminate employment for Good Reason, and the Company shall not have
cured such circumstances within thirty days following the Company’s receipt of
such notice.

(n) “Incentive Award” means an Option or Other Stock-Based Award granted to a
Participant pursuant to the terms of the Plan.

(o) “Option” means an option to purchase shares of Common Stock granted to a
Participant pursuant to Section 6.

(p) “Other Stock-Based Award” means an equity or equity-related award granted to
a Participant pursuant to Section 7.

 

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(q) “Participant” means a Director or employee of the Company who is eligible to
participate in the Plan and to whom one or more Incentive Awards have been
granted pursuant to the Plan and, following the death of any such Person, his
successors, heirs, executors and administrators, as the case may be.

(r) “Performance-Based Compensation” means compensation intended to satisfy the
requirements of Section 162(m) of the Code for deductibility of remuneration
paid to Covered Employees.

(s) “Performance Measures” means such measures as are described in Section 8 on
which performance goals are based in order to qualify certain awards granted
hereunder as Performance-Based Compensation.

(t) “Performance Period” means the period of time during which the performance
goals must be met in order to determine the degree of payout and/or vesting with
respect to an Incentive Award that is intended to qualify as Performance-Based
Compensation.

(u) “Person” means a “person” as such term is used in Section 13(d) and 14(d) of
the Exchange Act, including any “group” within the meaning of Section 13(d)(3)
under the Exchange Act.

(v) “Plan” means this Amended and Restated Chipotle Mexican Grill, Inc. 2006
Stock Incentive Plan, as it may be amended from time to time.

(w) “Qualifying Termination” means a Participant’s termination of employment by
the Company Without Cause or for Good Reason, in either case during the period
commencing on a Change in Control and ending on the second anniversary of the
Change in Control.

(x) “Securities Act” means the Securities Act of 1933, as amended.

(y) “Subsidiary” means any “subsidiary” within the meaning of Rule 405 under the
Securities Act.

(z) “Voting Securities” means, at any time, Chipotle’s then outstanding voting
securities.

(aa) “Without Cause” means a termination of a Participant’s employment with the
Company other than: (i) a termination of employment by the Company for Cause,
(ii) a termination of employment as a result of the Participant’s death or
Disability or (iii) a termination of employment by the Participant for any
reason.

 

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3. Stock Subject to the Plan

(a) In General

Subject to adjustment as provided in Section 9 and the following provisions of
this Section 3, the maximum number of shares of Common Stock that may be issued
pursuant to Incentive Awards granted under the Plan shall not exceed 4,450,000
shares of Common Stock in the aggregate, of which 666,666 shares of Common Stock
were available for issuance but were not issued under the Company’s Executive
Stock Option Plan. Out of such aggregate, the maximum number of shares of Common
Stock that may be covered by Options that are designated as “incentive stock
options” within the meaning of Section 422 of the Code shall not exceed
2,700,000 shares of Common Stock, subject to adjustment as provided in Section 9
and the following provisions of this Section 3. Shares of Common Stock issued
under the Plan may be either authorized and unissued shares or treasury shares,
or both, at the discretion of the Committee.

For purposes of the preceding paragraph, shares of Common Stock covered by
Incentive Awards shall only be counted as used to the extent they are actually
issued and delivered to a Participant (or such Participant’s permitted
transferees as described in the Plan) pursuant to the Plan. For purposes of
clarification, if shares of Common Stock are issued subject to conditions which
may result in the forfeiture, cancellation or return of such shares to the
Company, any portion of the shares forfeited, cancelled or returned shall be
treated as not issued pursuant to the Plan. Shares of Common Stock covered by
Incentive Awards granted pursuant to the Plan in connection with the assumption,
replacement, conversion or adjustment of outstanding equity-based awards in the
context of a corporate acquisition or merger (within the meaning of
Section 303A.08 of the New York Stock Exchange Listed Company Manual or any
successor provision) shall not count as used under the Plan for purposes of this
Section 3. The following shares of Common Stock may not again be made available
for issuance as Incentive Awards under the Plan: (i) shares of Common Stock not
issued or delivered as a result of the net settlement of an outstanding Option
or stock appreciation right, (ii) shares of Common Stock used to pay the
exercise price or withholding taxes related to an outstanding Incentive Award,
or (iii) shares of Common Stock repurchased on the open market with the proceeds
from the exercise of an Option.

Subject to adjustment as provided in Section 9, the maximum number of shares of
Common Stock that may be covered by Incentive Awards granted under the Plan to
any single Participant in any fiscal year of the Company shall not exceed
500,000 shares, prorated on a daily basis for any fiscal year of the Company
that is shorter than 365 days.

Subject to adjustment as provided in Section 9, the maximum number of shares of
Common Stock that may be covered by Incentive Awards other than Options and
stock appreciation rights shall not exceed 1,400,000 shares.

(b) Prohibition on Substitutions and Repricings

Except as provided in this Section 3(b), in no event shall any new Incentive
Awards be issued in substitution for outstanding Incentive Awards previously
granted to Participants, nor shall any repricing (within the meaning of US
generally accepted accounting practices or any applicable stock exchange rule)
of Incentive Awards issued under the Plan be permitted at any time under any
circumstances, in each case unless the shareholders of the Company expressly
approve such substitution or repricing. Notwithstanding the foregoing, the
Committee may authorize the issuance of Incentive Awards in substitution for
outstanding Incentive Awards other than Options or stock appreciation rights,
provided such substituted Incentive Awards are for a number of

 

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shares of Common Stock no greater than the number included in the original
award, have an exercise price or base price (if applicable) at least as great as
the exercise price or base price of the substituted award, and the effect of the
substitution is (A) solely to add restrictions (such as performance conditions)
to the award or (B) to provide a benefit to the Company (and not the
Participant) (which, for the avoidance of doubt, shall include substitutions
performed for the purpose of permitting the Incentive Awards to qualify as
“performance based compensation” for purposes of Section 162(m) of the Code).

 

4. Administration of the Plan

The Plan shall be administered by a Committee of the Board of Directors
designated by the Board of Directors consisting of two or more persons, at least
two of whom qualify as non-employee directors (within the meaning of Rule 16b-3
promulgated under Section 16 of the Exchange Act), and as “outside directors”
within the meaning of Treasury Regulation Section 1.162-27(e)(3) and as
“independent” within the meaning of any applicable stock exchange or similar
regulatory authority. The Committee shall, consistent with the terms of the
Plan, from time to time designate those employees and non-employee directors who
shall be granted Incentive Awards under the Plan and the amount, type and other
terms and conditions of such Incentive Awards. Except to the extent prohibited
by applicable law or the applicable rules of a stock exchange on which the
Company’s shares are traded, the Committee may (i) allocate all or any portion
of its responsibilities and powers to any one or more of its members and
(ii) delegate all or any part of its responsibilities and powers to any person
or persons selected by it, provided that no such delegation may be made that
would cause Incentive Awards or other transactions under the Plan to cease to be
exempt from Section 16(b) of the Exchange Act, or cause an Incentive Award
designated as Performance-Based Compensation not to qualify for, or to cease to
qualify for, any exemption from non-deductibility under Section 162(m) of the
Code. Any such allocation or delegation may be revoked by the Committee at any
time.

The Committee shall have full discretionary authority to administer the Plan,
including discretionary authority to interpret and construe any and all
provisions of the Plan and the terms of any Incentive Award (and any agreement
evidencing any Incentive Award) granted thereunder and to adopt and amend from
time to time such rules and regulations for the administration of the Plan as
the Committee may deem necessary or appropriate (including without limitation
the adoption or amendment of rules or regulations applicable to the grant,
vesting or exercise of Incentive Awards issued to employees located outside the
United States). Without limiting the generality of the foregoing, (i) the
Committee shall determine whether an authorized leave of absence, or absence in
military or government service, shall constitute termination of employment and
(ii) the employment of a Participant with the Company shall be deemed to have
terminated for all purposes of the Plan if such person is employed by or
provides services to a Person that is a Subsidiary of the Company and such
Person ceases to be a Subsidiary of the Company, unless the Committee determines
otherwise. Decisions of the Committee shall be final, binding and conclusive on
all parties.

 

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On or after the date of grant of an Incentive Award under the Plan, the
Committee may (i) accelerate the date on which any such Incentive Award becomes
vested, exercisable or transferable, as the case may be, (ii) extend the term of
any such Incentive Award, including, without limitation, extending the period
following a termination of a Participant’s employment during which any such
Incentive Award may remain outstanding, (iii) waive any conditions to the
vesting, exercisability or transferability, as the case may be, of any such
Incentive Award (iv) provide for the payment of dividends or dividend
equivalents with respect to any such Incentive Award; or (v) otherwise amend an
outstanding Incentive Award in whole or in part from time-to-time as the
Committee determines, in its sole and absolute discretion, to be necessary or
appropriate to conform the Incentive Award to, or otherwise satisfy any legal
requirement (including without limitation the provisions of Section 409A of the
Code), which amendments may be made retroactively or prospectively and without
the approval or consent of the Participant to the extent permitted by applicable
law; provided, that the Committee shall not have any such authority to the
extent that the grant or exercise of such authority would cause any tax to
become due under Section 409A of the Code.

No member of the Committee shall be liable for any action, omission, or
determination relating to the Plan, and Chipotle shall indemnify and hold
harmless each member of the Committee and each other Director or employee of the
Company to whom any duty or power relating to the administration or
interpretation of the Plan has been delegated against any cost or expense
(including counsel fees) or liability (including any sum paid in settlement of a
claim with the approval of the Committee) arising out of any action, omission or
determination relating to the Plan, unless, in either case, such action,
omission or determination was taken or made by such member, director or employee
in bad faith and without reasonable belief that it was in the best interests of
the Company.

 

5. Eligibility

The Persons who shall be eligible to receive Incentive Awards pursuant to the
Plan shall be those employees of the Company and Directors whom the Committee
shall select from time to time. All Incentive Awards granted under the Plan
shall be evidenced by a separate written agreement entered into by the Company
and the recipient of such Incentive Award.

 

6. Options

The Committee may from time to time grant Options, subject to the following
terms and conditions:

(a) Exercise Price

The exercise price per share of Common Stock covered by any Option shall be not
less than 100% of the Fair Market Value of a share of Common Stock on the date
on which such Option is granted. The agreement evidencing the award of each
Option shall clearly identify such Option as either an “incentive stock option”
within the meaning of Section 422 of the Code or as not an incentive stock
option.

 

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(b) Term and Exercise of Options

(1) Each Option shall become vested and exercisable on such date or dates,
during such period and for such number of shares of Common Stock as shall be
determined by the Committee on or after the date such Option is granted
(including without limitation in accordance with terms and conditions relating
to the vesting or exercisability of an Option set forth in any employment,
severance, change in control or similar agreement entered into by the Company
with a Participant on or after the date of grant); provided, however that no
Option shall be exercisable after the expiration of ten years from the date such
Option is granted; and, provided, further, that each Option shall be subject to
earlier termination, expiration or cancellation as provided in the Plan or in
the agreement evidencing such Option. In addition, except as otherwise
determined by the Committee at or after the time of grant, unless an Option
becomes vested or exercisable pursuant to Sections 6(c) or 6(d) hereof, an
Option may not become vested or exercisable in whole or in part during the
twelve-month period commencing with the date on which the Option was granted.

(2) Each Option may be exercised in whole or in part; provided, however that no
partial exercise of an Option shall be for an aggregate exercise price of less
than $1,000 or such other amount as the Committee may determine from time to
time. The partial exercise of an Option shall not cause the expiration,
termination or cancellation of the remaining portion thereof.

(3) An Option shall be exercised by such methods and procedures as the Committee
determines from time to time, including without limitation through net physical
settlement or other method of cashless exercise.

(4) Options may not be sold, pledged, assigned, hypothecated, transferred, or
disposed of in any manner other than by will or by the laws of descent or
distribution and may be exercised, during the lifetime of a Participant, only by
the Participant; provided, however that the Committee may permit Options to be
sold, pledged, assigned, hypothecated, transferred, or disposed of, on a general
or specific basis, subject to such conditions and limitations as the Committee
may determine.

(c) Effect of Termination of Employment or other Relationship

The agreement evidencing the award of each Option shall specify the consequences
with respect to such Option of the termination of the employment, service as a
director or other relationship between the Company and the Participant holding
the Option, provided, however, that except as expressly provided to the contrary
in the agreement evidencing the award of a particular Option, where continued
vesting or exercisability of an Option terminates in connection with the
termination of a Participant’s employment relationship with the Company, such
Participant’s employment relationship with the Company will be deemed, for
purposes of such Option, to continue so long as Participant serves as either an
employee of the Company or as a member of the Board. Notwithstanding the
foregoing sentence, a Participant’s employment will be deemed to terminate
immediately upon such Participant’s termination for Cause, regardless of whether
Participant remains on the Board following such termination.

 

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(d) Effect of Qualifying Termination

If a Participant experiences a Qualifying Termination or a Director’s service on
the Board terminates in connection with or as a result of a Change in Control,
each Option outstanding immediately prior to such Qualifying Termination or
termination of a Director’s service shall become fully and immediately vested
and exercisable as of such Qualifying Termination or termination of a Director’s
service and shall remain exercisable until its expiration, termination or
cancellation pursuant to the terms of the Plan and the agreement evidencing such
Option.

(e) Special Rules for Incentive Stock Options

(1) The aggregate Fair Market Value of shares of Common Stock with respect to
which “incentive stock options” (within the meaning of Section 422 of the Code)
are exercisable for the first time by a Participant during any calendar year
under the Plan and any other stock option plan of the Company (or any
“subsidiary” as such term is defined in Section 424 of the Code of Chipotle)
shall not exceed $100,000. Such Fair Market Value shall be determined as of the
date on which each such incentive stock option is granted. In the event that the
aggregate Fair Market Value of shares of Common Stock with respect to such
incentive stock options exceeds $100,000, then incentive stock options granted
hereunder to such Participant shall, to the extent and in the order required by
regulations promulgated under the Code (or any other authority having the force
of regulations)(“Regulations”), automatically be deemed to be non-qualified
stock options, but all other terms and provisions of such incentive stock
options shall remain unchanged. In the absence of such Regulations (and
authority), or in the event such Regulations (or authority) require or permit a
designation of the options which shall cease to constitute incentive stock
options, incentive stock options granted hereunder shall, to the extent of such
excess and in the order in which they were granted, automatically be deemed to
be non-qualified stock options, but all other terms and provisions of such
incentive stock options shall remain unchanged.

(2) No incentive stock option may be granted to an individual if, at the time of
the proposed grant, such individual owns stock possessing more than ten percent
of the total combined voting power of all classes of stock of Chipotle or any of
its “subsidiaries” (within the meaning of Section 424 of the Code), unless
(i) the exercise price of such incentive stock option is at least one hundred
and ten percent of the Fair Market Value of a share of Common Stock at the time
such incentive stock option is granted and (ii) such incentive stock option is
not exercisable after the expiration of five years from the date such incentive
stock option is granted.

 

7. Other Stock-Based Awards

(a) Authorization of Other Stock-Based Awards

The Committee may grant equity-based or equity-related awards not otherwise
described herein in such amounts and subject to such terms and conditions as the
Committee shall determine. Without limiting the generality of the preceding
sentence, each such Other Stock-Based Award may (i) involve the transfer of
actual shares of Common Stock to Participants, either at the time of grant or
thereafter, or payment in cash or otherwise of amounts based on the value of
shares of Common Stock, (ii) be subject to performance-

 

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based and/or service-based conditions, (iii) be in the form of cash-settled
stock appreciation rights, stock-settled stock appreciation rights, phantom
stock, restricted stock, restricted stock units, performance shares, or
share-denominated performance units (iv) be designed to comply with applicable
laws of jurisdictions other than the United States, and (v) be designed to
qualify as Performance Based Compensation. Notwithstanding the foregoing, any
Other Stock-Based Award having a value determined by reference to a base or
exercise price shall have a base or exercise price not less than 100% of the
Fair Market Value of a share of Common Stock on the date on which such Other
Stock-Based Award is granted, and no Other Stock-Based Award shall have an
expiration date greater than ten years from the date on which such Other
Stock-Based Award is granted. Any stock-settled stock appreciation right granted
pursuant to this Section 7 shall provide for settlement solely in the number of
shares with an aggregate Fair Market Value on the date of exercise equal to
(x) the excess of the Fair Market Value of a share of Common Stock as of such
date over the base or exercise price of such stock appreciation right,
multiplied by (y) the number of stock appreciation rights being exercised.

(b) Effect of Qualifying Termination; Other Termination Provisions

Except as may be expressly provided to the contrary by the Committee in an
agreement evidencing the grant of an Other Stock-Based Award or any employment,
severance, change in control or similar agreement entered into with a
Participant, if a Participant experiences a Qualifying Termination or a
Director’s service on the Board terminates in connection with or as a result of
a Change in Control, each Other Stock-Based Award outstanding immediately prior
to such Qualifying Termination or termination of Director’s service shall become
fully and immediately vested and, if applicable, exercisable as of such
Qualifying Termination or termination and shall remain exercisable until its
expiration, termination or cancellation pursuant to the terms of the Plan and
the agreement evidencing such Other Stock-Based Award.

Furthermore, except as expressly provided to the contrary in the agreement
evidencing the award of a particular Other Stock-Based Award, where continued
vesting or exercisability of an Other Stock-Based Award terminates in connection
with the termination of a Participant’s employment relationship with the
Company, such Participant’s employment relationship with the Company will be
deemed, for purposes of such Other Stock-Based Award, to continue so long as
Participant serves as either an employee of the Company or as a member of the
Board. Notwithstanding the foregoing sentence, a Participant’s employment will
be deemed to terminate immediately upon such Participant’s termination for
Cause, regardless of whether Participant remains on the Board following such
termination.

 

8. Performance Measures

(a) Performance Measures

The performance goals upon which the payment or vesting of any Incentive Award
(other than Options and SARs) to a Covered Employee that is intended to qualify
as Performance-Based Compensation depends shall relate to one or more of the
following Performance Measures (either alone or in any combination, and may be
expressed with respect to the Company or one or more

 

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operating units or groups, as the Committee may determine): revenue growth; cash
flow; cash flow from operations; net income; earnings per share, diluted or
basic; earnings per share from continuing operations, diluted or basic; earnings
before interest and taxes; earnings before interest, taxes, depreciation, and
amortization; earnings from continuing operations; net asset turnover; inventory
turnover; capital expenditures; net income; income from operations; income
before income taxes; gross or operating margin; restaurant-level operating
margin; profit margin; assets; debt; working capital; return on equity; return
on net assets; return on total assets; return on capital; return on investment;
return on revenue; net or gross revenue; comparable restaurant sales; new
restaurant openings; market share; economic value added; cost of capital;
expense reduction levels; safety record; stock price; productivity; customer
satisfaction; employee satisfaction; and total shareholder return. For any Plan
Year, Performance Measures may be determined on an absolute basis or relative to
internal goals or relative to levels attained in years prior to such Plan Year
or related to other companies or indices or as ratios expressing relationships
between two or more Performance Measures.

Performance Periods may be equal to or longer than, but not less than, one
fiscal year of the Company and may be overlapping. Within 90 days after the
beginning of a Performance Period, and in any case before 25% of the Performance
Period has elapsed, the Committee shall establish (a) performance goals and
objectives for the Company for such Performance Period, (b) target awards for
each Participant, and (c) schedules or other objective methods for determining
the applicable performance percentage to be applied to each such target award.

To the extent determined by the Committee at the time the Performance Measures
are established, the measurement of any Performance Measure(s) may exclude the
impact of charges for restructurings, discontinued operations, extraordinary
items, and other unusual or non-recurring items, and the cumulative effects of
accounting changes, each as defined by generally accepted accounting principles
and as identified in the Company’s audited financial statements, including the
notes thereto. To the extent determined by the Committee at the time the
Performance Measures are established, any Performance Measure(s) may be used to
measure the performance of the Company or a Subsidiary as a whole or any
business unit of the Company or any Subsidiary or any combination thereof, as
the Committee may deem appropriate, or any of the above Performance Measures as
compared to the performance of a group of comparator companies, or a published
or special index that the Committee, in its discretion, deems appropriate.

Nothing in this Section 8 is intended to limit the Committee’s discretion to
adopt conditions with respect to any Incentive Award that is not intended to
qualify as Performance-Based Compensation that relate to performance other than
the Performance Measures. In addition, the Committee may, subject to the terms
of the Plan, amend previously granted Incentive Awards in a way that
disqualifies them as Performance-Based Compensation.

(b) Committee Discretion

In the event that the requirements of Section 162(m) of the Code and the
regulations thereunder change to permit Committee discretion to alter the
Performance Measures without obtaining shareholder approval of such changes, the
Committee shall have discretion to make such changes without obtaining
shareholder approval.

 

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9. Adjustment Upon Changes in Common Stock

(a) Shares Available for Grants

In the event of any change in the number of shares of Common Stock outstanding
by reason of any stock dividend or split, recapitalization, merger,
consolidation, combination or exchange of shares or similar corporate change,
the maximum aggregate number of shares of Common Stock with respect to which the
Committee may grant Incentive Awards and the maximum aggregate number of shares
of Common Stock with respect to which the Committee may grant Incentive Awards
to any individual Participant in any year shall be appropriately adjusted by the
Committee. In the event of any change in the number of shares of Common Stock
outstanding by reason of any other similar event or transaction, the Committee
may, but need not, make such adjustments in the number and class of shares of
Common Stock with respect to which Incentive Awards may be granted as the
Committee may deem appropriate.

(b) Increase or Decrease in Issued Shares Without Consideration

Subject to any required action by the shareholders of Chipotle, in the event of
any increase or decrease in the number of issued shares of Common Stock
resulting from a subdivision or consolidation of shares of Common Stock or the
payment of a stock dividend (but only on the shares of Common Stock), or any
other increase or decrease in the number of such shares effected without receipt
or payment of consideration by the Company or the payment of an extraordinary
cash dividend, the number of shares of Common Stock subject to each outstanding
Incentive Award and the exercise price per share of Common Stock of each such
Incentive Award shall be adjusted as necessary to prevent the enlargement or
dilution of rights under such Incentive Award.

(c) Certain Mergers

Subject to any required action by the shareholders of Chipotle, in the event
that Chipotle shall be the surviving corporation in any merger, consolidation or
similar transaction as a result of which the holders of shares of Common Stock
receive consideration consisting exclusively of securities of such surviving
corporation, the Committee shall adjust each Incentive Award outstanding on the
date of such merger or consolidation to the extent deemed appropriate by the
Committee so that it pertains to and applies to the securities which a holder of
the number of shares of Common Stock subject to such Incentive Award would have
received in such merger or consolidation.

 

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(d) Certain Other Transactions

In the event of (i) a dissolution or liquidation of Chipotle, (ii) a sale of all
or substantially all of the Company’s assets (on a consolidated basis), (iii) a
merger, consolidation or similar transaction involving Chipotle in which
Chipotle is not the surviving corporation, (iv) a merger, consolidation or
similar transaction involving Chipotle in which Chipotle is the surviving
corporation but the holders of shares of Common Stock receive securities of
another corporation and/or other property, including cash, or (v) a Business
Combination that is a Change in Control, the Committee shall, in its discretion,
have the power to:

(i) cancel, effective immediately prior to the occurrence of such event, each
Incentive Award (whether or not then exercisable), and, in full consideration of
such cancellation, pay to the Participant to whom such Incentive Award was
granted an amount in cash, for each share of Common Stock subject to such
Incentive Award equal to the value, as determined by the Committee in its
discretion, of such Incentive Award, provided that with respect to any
outstanding Option such value shall be equal to the excess of (A) the value, as
determined by the Committee in its discretion, of the property (including cash)
received by the holder of a share of Common Stock as a result of such event over
(B) the exercise price of such Option; or

(ii) provide for the exchange of each Incentive Award (whether or not then
exercisable or vested) for an incentive award with respect to, as appropriate,
some or all of the property which a holder of the number of shares of Common
Stock subject to such Incentive Award would have received in such transaction
and, incident thereto, make an equitable adjustment as determined by the
Committee in its discretion in the exercise price of the incentive award, or the
number of shares or amount of property subject to the incentive award or, if
appropriate, provide for a cash payment to the Participant to whom such
Incentive Award was granted in partial consideration for the exchange of the
Incentive Award.

(e) Other Changes

In the event of any change in the capitalization of Chipotle or corporate change
other than those specifically referred to in paragraphs (b), (c) or (d), the
Committee may, in its discretion, make such adjustments in the number and class
of shares subject to Incentive Awards outstanding on the date on which such
change occurs and in such other terms of such Incentive Awards as the Committee
may consider appropriate.

(f) No Other Rights

Except as expressly provided in the Plan or the agreement evidencing the grant
of an Option or Other Stock-Based Award, no Participant shall have any rights by
reason of any subdivision or consolidation of shares of stock of any class, the
payment of any dividend, any increase or decrease in the number of shares of
stock of any class or any dissolution, liquidation, merger or consolidation of
Chipotle or any other corporation. Except as expressly provided in the Plan or
the agreement evidencing the grant of an Option or Other Stock-Based Award, no
issuance by Chipotle of shares of stock of any class, or securities convertible
into shares of stock of any class, shall affect, and no adjustment by reason
thereof shall be made with respect to, the number of shares or amount of other
property subject to any Incentive Award.

 

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(g) Code Section 409A

The Company intends to administer the Plan and all Incentive Awards granted
thereunder in a manner that complies with Code Section 409A, however, the
Company shall not be responsible for any additional tax imposed pursuant to Code
Section 409A, nor will the Company indemnify or otherwise reimburse Participant
for any liability incurred as a result of Code Section 409A.

 

10. Rights as a Stockholder

No person shall have any rights as a stockholder with respect to any shares of
Common Stock covered by or relating to any Incentive Award granted pursuant to
the Plan until the date of the issuance of a stock certificate with respect to
such shares. Except as otherwise expressly provided in Section 9 hereof, no
adjustment of any Incentive Award shall be made for dividends or other rights
for which the record date occurs prior to the date such stock certificate is
issued.

 

11. No Special Employment Rights; No Right to Incentive Award

(a) Nothing contained in the Plan or any Incentive Award shall confer upon any
Participant any right with respect to the continuation of his employment by or
service to the Company or interfere in any way with the right of the Company at
any time to terminate such employment or to increase or decrease the
compensation of the Participant from the rate in existence at the time of the
grant of an Incentive Award.

(b) No person shall have any claim or right to receive an Incentive Award
hereunder. The Committee’s granting of an Incentive Award to a Participant at
any time shall neither require the Committee to grant an Incentive Award to such
Participant or any other Participant or other person at any time nor preclude
the Committee from making subsequent grants to such Participant or any other
Participant or other person.

 

12. Securities Matters

(a) Chipotle shall be under no obligation to effect the registration pursuant to
the Securities Act of any shares of Common Stock to be issued hereunder or to
effect similar compliance under any state laws. Notwithstanding anything herein
to the contrary, Chipotle shall not be obligated to cause to be issued or
delivered any certificates evidencing shares of Common Stock pursuant to the
Plan unless and until Chipotle is advised by its counsel that the issuance and
delivery of such certificates is in compliance with all applicable laws,
regulations of governmental authority and the requirements of any securities
exchange on which shares of Common Stock are traded. The Committee may require,
as a condition to the issuance and delivery of certificates evidencing shares of
Common Stock pursuant to the terms hereof, that the recipient of such shares
make such covenants, agreements and representations, and that such certificates
bear such legends, as the Committee deems necessary or desirable.

(b) The exercise of any Option granted hereunder shall only be effective at such
time as counsel to Chipotle shall have determined that the issuance and delivery
of shares of Common Stock pursuant to such exercise is in compliance with all
applicable laws, regulations of governmental authority and the requirements of
any securities exchange on which shares of Common Stock are

 

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traded. Chipotle may, in its discretion, defer the effectiveness of an exercise
of an Option hereunder or the issuance or transfer of shares of Common Stock
pursuant to any Incentive Award pending or to ensure compliance under federal or
state securities laws or the rules or regulations of any exchange on which the
Shares are then listed for trading. Chipotle shall inform the Participant in
writing of its decision to defer the effectiveness of the exercise of an Option
or the issuance or transfer of shares of Common Stock pursuant to any Incentive
Award. During the period that the effectiveness of the exercise of an Option has
been deferred, the Participant may, by written notice, withdraw such exercise
and obtain the refund of any amount paid with respect thereto.

 

13. Withholding Taxes

(a) Cash Remittance

Whenever shares of Common Stock are to be issued upon the exercise of an Option
or the grant or vesting of an Incentive Award, Chipotle shall have the right to
require the Participant to remit to Chipotle in cash an amount sufficient to
satisfy federal, state and local withholding tax requirements, if any,
attributable to such exercise, grant or vesting prior to the delivery of any
certificate or certificates for such shares or the effectiveness of the lapse of
such restrictions. In addition, upon the exercise or settlement of any Incentive
Award in cash, Chipotle shall have the right to withhold from any cash payment
required to be made pursuant thereto an amount sufficient to satisfy the
federal, state and local withholding tax requirements, if any, attributable to
such exercise or settlement.

(b) Stock Remittance

At the election of the Participant, subject to the approval of the Committee,
when shares of Common Stock are to be issued upon the exercise, grant or vesting
of an Incentive Award, the Participant may tender to Chipotle a number of shares
of Common Stock that have been owned by the Participant for at least six months
(or such other period as the Committee may determine) having a Fair Market Value
at the tender date determined by the Committee to be sufficient to satisfy the
minimum federal, state and local withholding tax requirements, if any,
attributable to such exercise, grant or vesting but not greater than such
minimum withholding obligations. Such election shall satisfy the Participant’s
obligations under Section 13(a) hereof, if any.

(c) Stock Withholding

At the election of the Participant, subject to the approval of the Committee,
when shares of Common Stock are to be issued upon the exercise, grant or vesting
of an Incentive Award, Chipotle shall withhold a number of such shares having a
Fair Market Value at the exercise date determined by the Committee to be
sufficient to satisfy the minimum federal, state and local withholding tax
requirements, if any, attributable to such exercise, grant or vesting but not
greater than such minimum withholding obligations. Such election shall satisfy
the Participant’s obligations under Section 13(a) hereof, if any.

 

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14. Amendment or Termination of the Plan

The Board of Directors may at any time suspend or discontinue the Plan or revise
or amend it in any respect whatsoever; provided, however, that to the extent any
applicable law, regulation or rule of a stock exchange requires shareholder
approval in order for any such revision or amendment to be effective, such
revision or amendment shall not be effective without such approval. The
preceding sentence shall not restrict the Committee’s ability to exercise its
discretionary authority hereunder pursuant to Section 4 hereof, which discretion
may be exercised without amendment to the Plan. No provision of this Section 14
shall be given effect to the extent that such provision would cause any tax to
become due under Section 409A of the Code. Except as expressly provided in the
Plan, no action hereunder may, without the consent of a Participant, reduce the
Participant’s rights under any previously granted and outstanding Incentive
Award. Nothing in the Plan shall limit the right of the Company to pay
compensation of any kind outside the terms of the Plan.

 

15. No Obligation to Exercise

The grant to a Participant of an Incentive Award shall impose no obligation upon
such Participant to exercise such Incentive Award.

 

16. Transfers Upon Death

Upon the death of a Participant, outstanding Incentive Awards granted to such
Participant may be exercised only by the executors or administrators of the
Participant’s estate or by any person or persons who shall have acquired such
right to exercise by will or by the laws of descent and distribution. No
transfer by will or the laws of descent and distribution of any Incentive Award,
or the right to exercise any Incentive Award, shall be effective to bind
Chipotle unless the Committee shall have been furnished with (a) written notice
thereof and with a copy of the will and/or such evidence as the Committee may
deem necessary to establish the validity of the transfer and (b) an agreement by
the transferee to comply with all the terms and conditions of the Incentive
Award that are or would have been applicable to the Participant and to be bound
by the acknowledgements made by the Participant in connection with the grant of
the Incentive Award.

 

17. Expenses and Receipts

The expenses of the Plan shall be paid by Chipotle. Any proceeds received by
Chipotle in connection with any Incentive Award will be used for general
corporate purposes.

 

18. Governing Law

The Plan and the rights of all persons under the Plan shall be construed and
administered in accordance with the laws of the State of Delaware without regard
to its conflict of law principles.

 

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19. Effective Date and Term of Plan

The Plan was originally adopted by the Board of Directors on January 25, 2006,
and approved by the shareholders of Chipotle on January 25, 2006, was amended on
December 14, 2006, and was further amended and restated and approved by the
shareholders of Chipotle on May 21, 2008. No grants may be made under the Plan
after the tenth anniversary of such amendment and restatement.

 

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