Exhibit 10.1

CHIPOTLE MEXICAN GRILL, INC.

2014 CASH INCENTIVE PLAN

 

Section 1. Purpose.

The purpose of the 2014 Cash Incentive Plan (the “Plan”) is to promote the
interests of Chipotle Mexican Grill, Inc. (“Chipotle”) and its subsidiaries
(collectively the “Company”) by providing eligible key employees of the Company
with incentive to assist the Company in meeting and exceeding its business
goals. The Plan provides opportunities for Participants (as defined in Section 3
below) to earn financial rewards for their role in assisting Chipotle to meet
its annual performance targets. Awards (as defined in Section 5 below) under the
Plan are based on the Company achieving the Performance Goal (as defined in
Section 5). The Plan will cover each fiscal year of Chipotle beginning with its
2014 fiscal year. Each such fiscal year is referred to herein as a “Performance
Period.”

 

Section 2. Administration.

(a) The Plan shall be administered by the Executive Compensation Committee (the
“Committee”) of the Board of Directors of Chipotle (the “Board”) from among its
members and shall be comprised of not fewer than two members who are intended to
qualify as “outside directors” within the meaning of Section 162(m) of the
Internal Revenue Code of 1986, as amended (the “Code”), and the regulations
thereunder.

(b) The Committee shall have broad authority to grant and administer Awards
under the Plan and may, subject to the provisions of the Plan, establish, adopt
or revise rules and regulations relating to the Plan or take such actions as it
deems necessary or advisable for the proper administration of the Plan. The
Committee shall have the authority to interpret and make decisions under the
Plan in its sole discretion including but not limited to determining whether the
Performance Goal and other conditions that are a prerequisite to earning an
Award have been met and exercising discretion to reduce or eliminate the amount
to be provided as an incentive payment hereunder. Any decision or interpretation
by the Committee hereunder shall be final and conclusive for all purposes and
binding upon all Participants or former Participants and their successors in
interest.

(c) Neither the Committee nor any member of the Committee shall be liable for
any act, omission, interpretation, construction or determination made in good
faith in connection with the Plan, and the members of the Committee shall be
entitled to indemnification and reimbursement by Chipotle in respect of any
claim, loss, damage or expense (including, without limitation, reasonable
attorneys’ fees) arising or resulting therefrom to the fullest extent permitted
by law.

 

Section 3. Eligibility.

Awards may be granted to officers, executive directors and key employees of the
Company who are selected for participation in the Plan by the Committee. The
Committee shall select in writing who shall receive an Award with respect to a
Performance Period within 90 days after the beginning of such Performance
Period. A qualifying employee selected by the Committee to participate in the
Plan shall be a “Participant” with respect to such Performance Period. Provided
the Committee determines that the Company has met the Performance Goal for the
Performance Period as set forth under Section 5 below and all other eligibility
requirements are met, the following guidelines will be used to determine
Participants’ incentive award eligibility. Awards are not guaranteed and will
not be paid unless the Performance Goal is met and the Committee authorizes the
payment of an incentive payment hereunder.

Each employee whose employment terminates prior to the end of a Performance
Period will not be eligible to receive an incentive award under the Plan for
that Performance Period. Notwithstanding the foregoing, if a Participant’s
employment is terminated due to retirement with Board’s consent, permanent
disability or death before the end of a Performance Period, the Committee may,
in its sole discretion, provide a prorated incentive award based on the number
of days the Participant was employed by the Company during such Performance
Period; provided, however, that no prorated incentive will be paid unless all of
the applicable requirements set forth in the Plan are met, including without
limitation that the Committee determines that the Performance Goal for the
applicable

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Performance Period has been met and authorizes the payment of incentive awards.
If the employment of a Participant terminates during a Performance Period for
any other reason, no incentive award will be paid to the Participant for that
Performance Period.

 

Section 4. Compliance Requirements.

A Participant must comply with all applicable state and federal regulations and
Company policies (collectively, the “Compliance Requirements”) in order to be
eligible to receive an incentive award under the Plan. A Participant whose
employment is terminated after the end of a Performance Period, but before
incentive awards for such Performance Period are paid, due to violating any of
the Compliance Requirements or other reasons involving cause will not be
eligible to receive an incentive award for such Performance Period.

 

Section 5. Performance Goal.

The Committee may grant performance-based awards (“Awards”) to Participants with
respect to a Performance Period beginning on or after January 1, 2014 subject to
the terms and conditions of the Plan. Each Award shall provide that the
Performance Goal is the Company’s achievement of positive Operating Income (as
defined below) for the then current Performance Period. For purposes of the
Plan, “Operating Income” means, with respect to a Performance Period, operating
income as presented in Chipotle’s consolidated audited financial statements,
excluding (i) restructuring and/or other nonrecurring charges; (ii) exchange
rate effects, as applicable, for non-US dollar denominated net sales and
operating earnings; (iii) the effects of changes to generally accepted
accounting standards required by the Financial Accounting Standards Board;
(iv) the effects to any statutory adjustments to corporate tax rates and (v) the
impact of any “extraordinary items” as determined under generally accepted
accounting principles. In the manner required by Section 162(m) of the Code, the
Committee shall, promptly after the date on which the necessary financial and
other information for a particular Performance Period becomes available, certify
whether or not the Performance Goal has been achieved.

 

Section 6. Payment.

If the Committee has determined that the Company has attained the Performance
Goal for a Performance Period, the amount payable under the Award for that
Performance Period shall be $8,000,000 provided, however, that the Committee may
in its sole discretion exercise discretion to reduce or eliminate the amount
payable to any Participant based on such factors as the Committee may deem
appropriate; including a manner consistent with corporate and individual
performance as measured under Chipotle’s annual performance-based cash incentive
program for all of our full-time regional and corporate employees. In no event
may the Committee increase the amount of any Award payable to any Participant
above $8,000,000 for a Performance Period. For purposes of clarity, the
Committee may exercise the discretion provided for by the foregoing sentence in
a non-uniform manner among Participants, including taking into account
individual performance. Awards shall be settled in cash or, in the Committee’s
sole discretion, in shares of Chipotle’s common stock from the Amended and
Restated Chipotle Mexican Grill, Inc. 2011 Stock Incentive Plan or other
Chipotle equity compensation plan that has been approved by shareholders. The
Company shall pay Awards as soon as administratively practical following
certification that the Performance Goal for a Performance Period has been met as
provided under Section 5 above and the determination of the actual incentive
amounts after the exercise of any discretion under this Section 6, but in no
event more than two and one half months following the end of the Performance
Period to which such certification relates except as provided under Section 7
below.

 

Section 7. Forfeiture and Recovery for Misconduct.

(a) Right of Recovery. Notwithstanding any other provision of the Plan to the
contrary, if the Board (or its authorized designee) determines during the
Recovery Period (as defined below) that a Participant has engaged in Misconduct
(as defined below), the Board, subject to the limitations set forth in this
Section 7, may in its sole discretion

(i) terminate such Participant’s participation in the Plan, or with respect to
any Award under the Plan, and treat any outstanding Award as forfeited

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(ii) require forfeiture, in whole or in part, of payment of any Award that has
been previously approved for payment under the Plan which remains in whole or in
part unpaid, and/or

(iii) demand that the Participant pay to Chipotle in cash the amount described
in Section 7(d) below; provided, however, that in the event the Board determines
during the Recovery Period that the Participant engaged in Misconduct as
described in clause (iv) of the definition of Misconduct) (“Restatement
Misconduct”), the Board shall in all circumstances, in addition to any other
recovery action taken, require forfeiture and demand repayment pursuant hereto.

(b) Recovery Period. “Recovery Period” for purposes of this Section 7 means

(i) if the Misconduct relates to Restatement Misconduct, or the Misconduct
consists of acts or omissions relating to the Company’s financial matters that
in the discretion of the Board are reasonably unlikely to be discovered prior to
the end of the Performance Period in which the Misconduct occurred and the
completion of the outside audit of the Company’s annual financial statements,
the period during which the Participant is employed by the Company and the
period ending two years after the Participant’s last day of employment,

(ii) if the Misconduct relates to the breach of any agreement between the
Participant and the Company, the term of the agreement and the period ending one
year following the expiration of such agreement, and

(iii) in all other cases, the period during which the Participant is employed by
the Company and the period ending one year after the Participant’s last day of
employment.

If during the Recovery Period the Board gives written notice to the Participant
of potential Misconduct, the Recovery Period shall be extended for such
reasonable time as the Board may specify is appropriate for it to make a final
determination of Misconduct and seek enforcement of any of its remedies
described above. The Company’s rights pursuant to this Section 7 shall terminate
on the effective date of a Change in Control (as defined in the Chipotle Mexican
Grill, Inc. 2011 Stock Incentive Plan) and no Recovery Period shall extend
beyond that date except with respect to any Participant for which the Board
prior to such Change in Control gave written notice to such Participant of
potential Misconduct.

For purposes of administratively enforcing its rights under this Section 6,
during any period for which potential Misconduct has been identified by the
Company, the Board may suspend such Participant’s participation in the Plan, or
with respect to any Award, or temporarily withhold, in whole or in part, payment
of any Award that has been previously approved for payment that remains in whole
or in part unpaid.

(c) Definition of Misconduct.

“Misconduct,” as determined by the Company (which determination shall be
conclusive), shall mean:

(i) material breach by the Participant of any provision of any employment,
consulting, advisory, proprietary information, non-disclosure, non-competition,
non-solicitation or other similar agreement between the Participant and the
Company,

(ii) Violation by the Participant of the Code of Conduct,

(iii) the Participant’s engagement in intentional deceitful act(s) that results
in (A) an improper personal benefit, or (B) injury to Chipotle or any of its
subsidiaries or affiliates; or

(iv) The Participant’s engagement in fraud or willful misconduct (not acting in
good faith or with reasonable belief that conduct was in the best interests of
Chipotle or its subsidiaries or affiliates) that significantly contributes to
Chipotle preparing a material financial restatement, other than a restatement of
financial statements that became materially inaccurate because of revisions to
generally accepted accounting principles.

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(d) Amount of Recovery. With respect to Misconduct described in clause (i) of
the definition of Misconduct (breach of agreement) and clause (ii) of such
definition (violation of Code of Conduct), and in addition to its right to
effect a termination of participation and a forfeiture of outstanding Awards
under the Plan, the Board may recover from the Participant the amount of any
payments made to the Participant under the Plan during the last 12 months of
employment with the Company. With respect to Misconduct described in clause
(iii) of the definition of Misconduct (intentional deceitful acts), and in
addition to its right to effect a termination of participation and a forfeiture
of outstanding awards under the Plan, the Board may recover from the Participant
the greater of (1) the amount paid to the Participant with respect to any Award
made under the Plan with a fiscal year that includes any period during which the
Misconduct occurred, or with a fiscal year which was directly impacted by the
Misconduct, or (2) the amount determined by the Board in its sole discretion to
represent the financial impact of the Misconduct upon the Company; provided,
however, that such recovery amount shall be reduced by the value of any
forfeited outstanding awards under the Plan (value to be reasonably determined
by the Committee) and any amounts recovered from the Participant under the
Company’s cash bonus plans and other short term or long term incentive plans as
a result of such Misconduct. With respect to Restatement Misconduct, and in
addition to its right to effect a termination of participation and a forfeiture
of outstanding awards under the Plan, the Board shall seek to recover the entire
amount paid to the Participant with respect to any award made under the Plan in
the twenty-four (24) month period following the first public issuance of the
financial statements that are the subject of an accounting restatement relating
to the Misconduct. The term “recover” or “recovered” shall include, but shall
not be limited to, any right of set-off, reduction, recoupment, off-set,
forfeiture, or other attempt by Chipotle to withhold or claim payment of an
award or any proceeds thereof. Chipotle’s right of forfeiture and recovery of
awards shall not limit any other right or remedy available to Chipotle with
respect to a Participant’s Misconduct, whether in law or equity, including but
not limited to injunctive relief, terminating the Participant’s employment with
Chipotle, or taking other legal action against the Participant.

The amount that may be recovered under this Section 7 shall be determined on a
gross basis without reduction for taxes paid or payable by a Participant.

 

Section 8. Dodd-Frank Clawback.

Notwithstanding any other provision of the Plan to the contrary, in order to
comply with Section 10D of the Securities Exchange Act of 1934, as amended, and
any regulations promulgated, or national securities exchange listing conditions
adopted, with respect thereto (collectively, the “Clawback Requirements”), if
Chipotle is required to prepare an accounting restatement due to its material
noncompliance with any financial reporting requirements under the securities
laws, then the Participant shall return to Chipotle, or forfeit if not yet paid,
the amount of any payment received with respect to an Award under the Plan
during the three-year period preceding the date on which Chipotle is required to
prepare the accounting restatement, based on the erroneous data, in excess of
what would have been paid to the Participant under the accounting restatement as
determined by the Committee in accordance with the Clawback Requirements and any
policy adopted by the Committee pursuant to the Clawback Requirements.

 

Section 9. General Provisions.

(a) No Rights to Awards or Continued Employment. No employee of the Company
shall have any claim or right to receive Awards under the Plan. Neither the Plan
nor any action taken under the Plan shall be construed as giving any employee
any right to be retained by the Company.

(b) No Limits on Other Awards and Plans. Nothing contained in the Plan shall
prohibit the Company from establishing other special awards or compensation
plans providing for the payment of compensation to employees of the Company,
including any Participants.

(c) Withholding Taxes. The Company shall deduct from all payments and
distributions under the Plan any required federal, state or local governments
tax withholdings.

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(d) Rights are Non-Assignable. A Participant nor any beneficiary nor any other
person shall have any right to assign the right to receive payments hereunder,
in whole or in part, which payments are non-assignable and non-transferable,
whether voluntarily or involuntarily.

(e) Unfunded Status of Plan. The Company shall not have any obligation to
establish any separate fund or trust or other segregation of assets to provide
for payments under the Plan. To the extent any person acquires any rights to
receive payments hereunder from the Company, such rights shall be no greater
than those of an unsecured creditor.

(f) Effective Date; Amendment. The Plan shall become effective on January 1,
2014 if approved by Chipotle’s stockholders at Chipotle’s 2013 annual
stockholder meeting. The Committee may at any time and from time to time alter,
amend, suspend or terminate the Plan in whole or in part; provided, however,
(i) any change to the Performance Goal or (ii) any alteration or amendment that
requires shareholder approval in order to allow Awards under the Plan to qualify
as “performance-based compensation” under Section 162(m) of the Code or to
comply with other applicable laws or regulations, shall be made subject to such
shareholder approval.

(g) 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.

(h) Interpretation. The Plan is designed and intended to comply with the
requirements for “performance-based compensation” under Section 162(m) of the
Code and all provisions hereof shall be construed consistent with this
intention.

Approved by the Board of Directors on March 14, 2013, subject to shareholder
approval.