Form 10-Q CHIPOTLE MEXICAN GRILL For: Jun 30

Exhibit 10.1



Chipotle Mexican Grill, Inc.

Director Compensation Program and Stock Ownership Guidelines

Effective May 18, 2021



Set forth below is the compensation program for non-employee directors of Chipotle Mexican Grill, Inc.  Members of Chipotle’s Board of Directors who are employees of Chipotle do not receive compensation for their services as directors.



In addition to the above cash retainers, if a Committee holds more than eight (8) formal meetings during the year, each Committee member (including the Chair) will receive a $2,000/meeting fee for each formal meeting in excess of eight (8) formal meetings in which the Committee member participates.  To qualify as a “formal meeting,” the meeting must have been scheduled in advance, follow a defined agenda circulated in advance, be attended by a quorum of the Committee members, and be documented with minutes.  A Committee member must attend at least 2/3rds of the meeting to qualify for the meeting fee.

Compensation Period and Payments

Director compensation will be paid based on the directors’ one-year term of service from one annual meeting of shareholders to the next annual meeting of shareholders (i.e., from May to May) (the “compensation year”). 



All cash retainers will be paid in arrears, on a pro rata basis, at the end of November and May.  No director may simultaneously receive a Committee Chair retainer and a Committee Member retainer for service on the Committee for which he or she serves as Chair.



The number of RSU’s granted to a director will be determined by dividing $150,000 by the closing stock price of Chipotle common stock on the grant date.  RSUs are granted to non-

---

 

employee directors on the date of Chipotle’s annual meeting of shareholders meeting each year and vest 100% on the grant date.    



Changes During a Compensation Year

If a director is elected to the Board on a date that is between annual meetings, the newly elected director will receive (i) a prorated RSU award, granted on the date that is three (3) business days after the date of election, and (ii) prorated cash compensation, which will be paid in accordance with the regular director pay schedule.  Both the total grant value of the RSU and the amount of cash compensation will be prorated based on the date of the director’s election to the Board and the number of days elapsed since the annual meeting of shareholders that most recently occurred (e.g., if the annual meeting is on May 31 and a director joins on October 1, that director will receive 243/365th of the annual compensation amount). 



If a director is appointed to or leaves a Committee, or assumes or relinquishes a Chair or Lead Independent Director position, on a date that is between annual meetings, his or her cash compensation will be prorated based on the effective date of the change in service and the number of days elapsed since the annual meeting of shareholders that most recently occurred.



Deferral Election

A director may elect to defer the receipt of cash compensation or defer the receipt of shares of common stock that otherwise would be issuable upon vesting of an RSU by submitting to Chipotle a deferral election in the form provided by Chipotle.  The deferral form must be received by Chipotle before the end of the calendar year immediately prior to the compensation year in which the cash compensation or RSU relates (for example, the deferral election is due before December 31, 2019 for director compensation payable for the compensation year May 2020 – May 2021). 



Expense Reimbursement

Directors will be reimbursed for reasonable expenses directly incurred in connection with their service as directors, including travel and lodging expenses for meetings. Reimbursement is subject to a director providing timely substantiation of expenses pursuant to Chipotle’s expense policy.

---

 



Stock Ownership Guidelines

Directors are expected to own, within five years after being elected to the Board, shares of Chipotle common stock having a total value of five (5) times the annual cash retainer payable to non-employee directors (excluding Committee, Chair and Lead Independent Director retainers).



The following forms of equity count towards the required stock ownership guidelines:



The following forms of equity do not count towards the required stock ownership guidelines:

---

Exhibit 10.2





CHIPOTLE MEXICAN GRILL, INC.

NON-EMPLOYEE DIRECTOR

2021 RESTRICTED STOCK UNIT (“RSU”) AGREEMENT

 



Name of Participant:



Number of RSUs:



Grant Date:May 18, 2021



This Non-Employee Director 2021 Restricted Stock Unit Agreement (this “Agreement”), dated as of the Grant Date stated above, is delivered by Chipotle Mexican Grill, Inc., a Delaware corporation (the “Company”), to the Participant named above (“you” or the “Participant”), in your capacity as a non-employee member of the Board of Directors of the Company (the “Board”).  

Recitals

WHEREAS, the Compensation Committee of the Board (the “Committee”) has granted to you, under the Amended and Restated Chipotle Mexican Grill, Inc. 2011 Stock Incentive Plan (the “Plan”), the restricted stock units (“RSUs”) indicated above (the “Award”), subject to the terms and conditions hereof and the Plan (capitalized terms used and not otherwise defined in this Agreement shall have the meanings set forth in the Plan); and 



WHEREAS, the RSUs and other Awards provided for under the Plan are intended to comply with the requirements of Rule 16b-3 under the Securities Exchange Act of 1934, as amended.



Agreement

NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements herein contained, you and the Company hereby agree as follows:



1.Grant of Award. The Company hereby grants to you, and you hereby accept, subject to the terms and conditions set forth in the Plan and in this Agreement, the number of RSUs indicated above, effective as of the Grant Date indicated above.   Each RSU represents the right to receive one share of common stock, par value $0.01 per share, of the Company (“Stock”), subject to the terms and conditions set forth in the Plan and in this Agreement. The shares of Stock that are issuable upon vesting of the RSUs granted to you pursuant to this Agreement are referred to in this Agreement as the “Shares.” Subject to the provisions of Section 2 hereof, this Award of RSUs is irrevocable and is intended to conform in all respects with the Plan.



---

 

2.Immediate Vesting.  Except as otherwise provided in the Plan, your RSUs will vest in full and become nonforfeitable on the Grant Date indicated above.



3. Distribution of Shares.



(a)Distribution Upon Vesting. The Company will distribute to you (or to your estate in the event of your death) the Shares of Stock represented by the RSUs as soon as administratively practicable after vesting, but in no event later than the fifteenth day of the third calendar month beginning after the calendar year in which such RSUs shall have become vested.  



(b)Compliance with Law. The Plan, the granting of this RSU, and any obligations of the Company under the Plan, shall be subject to all applicable federal, state and foreign country laws, rules and regulations, and to such approvals by any regulatory or governmental agency as may be required, and to any rules or regulations of any exchange on which the Stock is listed. The Company, in its discretion, may postpone the granting and vesting of this RSU, the issuance or delivery of Stock under this RSU or any other action permitted under the Plan to permit the Company, with reasonable diligence, to complete such stock exchange listing or registration or qualification of such Stock or other required action under any federal, state or foreign country law, rule or regulation and may require you to make such representations and furnish such information as it may consider appropriate in connection with the issuance or delivery of Stock in compliance with applicable laws, rules and regulations. The Company shall not be obligated by virtue of any provision of the Plan to recognize the vesting of this RSU or to otherwise sell or issue Stock in violation of any such laws, rules or regulations.



4.Deferral Elections.  You may elect to defer the receipt of the Shares that otherwise would be issuable upon vesting of this RSU by submitting to the Company a deferral election, in the form provided by the Company, prior to the start of the calendar year in which the RSU is granted.   If you submit a deferral election form, you represent that you understand the effect of such deferral under relevant federal, state and local tax and social security laws, including but not limited to the fact that social security contributions may be due upon vesting notwithstanding the deferral election, and the fact that the deferral may need to qualify as a “change in the time and form of distribution” under Code § 409(a)(4)(C) in order to avoid immediate taxation of the RSUs and a 20% addition to tax and premium interest tax.



5.Rights as a Shareholder. Except as set forth in the Plan, neither you nor any person claiming under or through you shall be, or have any of the rights or privileges of, a shareholder of the Company (e.g., you have no right to vote or receive dividends) in respect of the Shares issuable pursuant to this Award unless and until your Shares shall have been issued; provided that dividends and other distributions paid on the Stock shall be credited to you in an amount equal to the amount that would have been payable or distributable to you had the Shares of Stock underlying the RSUs been issued and outstanding as of the record date for such dividend or distribution, to be held by the Company on your behalf and made subject to the same vesting conditions applicable to the underlying RSUs.  At the time of delivery of the underlying Shares of Stock, the Company shall distribute to you in cash all dividends or distributions previously paid with respect to the RSUs that vested hereunder without interest.  In the event you forfeit RSUs, you also shall immediately forfeit any dividends or distributions held by the

---

 

Company that are attributable to the Stock underlying such forfeited RSUs.



6.Tax Withholding. Any provision of this Agreement to the contrary notwithstanding, the Company may take such steps as it deems necessary or desirable for the withholding of any taxes that it is required by law or regulation of any governmental authority, federal, state or local, domestic or foreign, to withhold in connection with vesting of any RSU or issuance of any of the Shares subject thereto.



7.Transfer of RSUs. The RSUs granted herein are not transferable except in accordance with the provisions of the Plan.



8.Plan Incorporated. You accept the RSUs hereby granted subject to all the provisions of the Plan, which, except as expressly contradicted by the terms hereof, are incorporated into this Agreement, including the provisions that authorize the Committee to administer and interpret the Plan and which provide that the Committee’s decisions, determinations and interpretations with respect to the Plan are final and conclusive on all persons affected thereby.



9.           Adjustment of RSUs.  The number of RSUs subject to this Award will automatically be adjusted in accordance with Section 9 of the Plan to prevent accretion, or to protect against dilution, in the event of a change to the Common Stock resulting from a recapitalization, stock split, consolidation, spin-off, reorganization, or liquidation or other similar transactions.



10.Miscellaneous.

(a)Notices. Any notice to be given to the Company under the terms of this Agreement shall be addressed to the Company at its principal executive offices, and any notice to be given to you shall be addressed to you at the address set forth on the attached Notice of Grant, or at such other address for a party as such party may hereafter designate in writing to the other. Any such notice shall be deemed to have been duly given if mailed, postage prepaid, addressed as aforesaid.



(b)Repayment. You agree and acknowledge that this RSU is subject to any policies that the Committee may adopt from time to time with respect to the repayment to the Company of any benefit received hereunder, including compensation recoupment or “clawback” policies.



(c)Binding Agreement. Subject to the limitations in this Agreement on the transferability by you of the Award granted herein, this Agreement shall be binding upon and inure to the benefit of the representatives, executors, successors or beneficiaries of the parties hereto.



(d)Governing Law. The interpretation, performance and enforcement of this Agreement shall be governed by the laws of the State of Delaware and the United States, as applicable, without reference to the conflict of laws provisions thereof.



---

 

(e)Severability. If any provision of this Agreement is declared or found to be illegal, unenforceable or void, in whole or in part, then the parties shall be relieved of all obligations arising under such provision, but only to the extent that it is illegal, unenforceable or void, it being the intent and agreement of the parties that this Agreement shall be deemed amended by modifying such provision to the extent necessary to make it legal and enforceable while preserving its intent or, if that is not possible, by substituting therefore another provision that is legal and enforceable and achieves the same objectives.



(f)Interpretation. All section titles and captions in this Agreement are for convenience only, shall not be deemed part of this Agreement, and in no way shall define, limit, extend or describe the scope or intent of any provisions of this Agreement.



(g)Entire Agreement. This Agreement constitutes the entire agreement among the parties hereto pertaining to the subject matter hereof and supersedes all prior agreements and understandings pertaining thereto.



(h)No Waiver. No failure by any party to insist upon the strict performance of any covenant, duty, agreement or condition of this Agreement or to exercise any right or remedy consequent upon a breach thereof shall constitute waiver of any such breach or any other covenant, duty, agreement or condition.



(i)Relief. In addition to all other rights or remedies available at law or in equity, the Company shall be entitled to injunctive and other equitable relief to prevent or enjoin any violation of the provisions of this Agreement.



IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the Grant Date specified above.



CHIPOTLE MEXICAN GRILL, INC.



By:/s/ Neil Flanzraich,  

Chairman, Compensation Committee





---

Exhibit 31.1

CERTIFICATION

I, Brian R. Niccol, certify that:

Date: July  23, 2021

 



---

Exhibit 31.2 

CERTIFICATION

I, John R. Hartung, certify that:

Date: July  23, 2021

 



---

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In accordance with 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, Brian R. Niccol, the Chairman and Chief Executive Officer of Chipotle Mexican Grill, Inc. (the “Registrant”) and John R. Hartung, the Chief Financial Officer of the Registrant, each hereby certifies that, to the best of his knowledge:

Date: July  23, 2021

 



---