Performance Share Agreement



This Performance Share Agreement (“Agreement”) evidences the grant to the Participant by Chipotle Mexican Grill, Inc. (the “Company”) of the right to receive shares of Common Stock of the Company, $.01 par value per share (“Common Stock”), on the terms and conditions provided for herein pursuant to the Chipotle Mexican Grill, Inc. 2011 Stock Incentive Plan (the “Plan”).  Except as specifically set forth herein, this Agreement and the rights granted hereunder are expressly subject to all of the terms, definitions and provisions of the Plan as it may be amended and restated from time to time. Capitalized terms used in this Agreement and not defined herein shall have the meanings attributed to them in the Plan.

The date on which all of the conditions set forth above are satisfied is the “Vesting Date,” and the Company will issue one share of Common Stock for each Performance Share earned and vested to the Participant on the March 15th immediately following the Performance Period or as soon as practicable thereafter consistent with not violating Section 409A of the Code (the “Payout Date”), subject to earlier payment in connection with a Change in Control under Section 3(c).

This Agreement represents the Company’s unfunded and unsecured promise to issue Common Stock at a future date, subject to the terms of this Agreement and the Plan.  Participant has no rights under this Agreement other than the rights of a general unsecured creditor of the Company.



Subject to the satisfaction of any tax withholding obligations described in Section 6 below, Participant may elect to defer the receipt of any of the shares of Common Stock underlying the Performance Shares by submitting to the Company a deferral election in the form provided by the Company.  In the event Participant intends to defer the receipt of Performance Shares, Participant must submit to the Company a completed deferral election form no later than the Final Election Date (as defined below). By submitting such deferral election, Participant represents that he/she understands the effect of any 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 the Vesting Date notwithstanding the deferral election.  Any deferral election may be amended or terminated prior to the Final Election Date.  A deferral election shall become irrevocable on the Final Election Date and any deferral election or revision of a deferral election submitted after the Final Election Date shall be void and of no force or effect.  The “Final Election Date” shall be the last business day occurring on or before the date that is six months prior to the final day of the Performance Period, provided that in no circumstances will the Final Election Date be later than the date Participant ceases to provide services to the Company or the date that the making of such election causes the Performance Shares to become subject to the excise tax pursuant to Code Section 409A.

Notwithstanding the foregoing or any contrary provision in the Plan, if Participant’s employment terminates prior to the Vesting Date as a result of Participant’s death, or the Committee determines that such termination is in connection with Participant’s Retirement (as defined below), or is as a result of Participant’s medically diagnosed permanent physical or mental inability to perform his or her job duties, then the award evidenced by this Agreement will continue in force following the date of such termination, and, subject to any then effective deferral election, a pro-rata portion of the shares of Common Stock underlying the Performance Shares will be issued to Participant (or if applicable his or her estate, heirs or beneficiaries) reflecting the period of Participant’s continued service to the Company from and after the Grant Date through the date of termination of Participant’s service, will be issued to Participant on the Payout Date.  The Committee will determine the pro-rata portion of the Performance Shares to be paid out under the following formula:  Total number of shares of Common Stock issuable on account of attaining the Performance Goals based upon the actual performance results during the Performance Period multiplied by a fraction, the numerator of which is the number of days of service following Grant Date and the denominator of which is the number of days following the Grant Date through the final day of the Performance Period).

For purposes of this Section 2, “Retirement” means that a Participant having a combined Age and Years of Service (as those terms are defined below) of at least 70 (a) has given the Chief Executive Officer of the Company or his or her designee at least six months prior written notice

of such Participant’s retirement; (b) has signed and delivered to the Company an agreement providing for such restrictive covenants, for a period of two years after such retirement, as may be determined from time to time by the Committee, based on individual facts and circumstances, to be reasonably necessary to protect the Company’s interests, (c) has signed and delivered to the Company, within 21 days of the Executive’s date of employment termination (or such later time as required under applicable law) a general release agreement of claims against the Company and its affiliates in a form reasonably acceptable to the Committee, which is not later revoked, and (d) voluntarily terminates from service with the Company.  The term “Age” of a Participant means (as of a particular date of determination), the Participant’s age on that date in whole years and any fractions thereof, and the term “Years of Service” means the number of years and fractions thereof during the period beginning on a Participant’s most recent commencement of employment with the Company or a subsidiary or parent of the Company (or such other Company-associated entity as the Committee may determine from time to time) and ending on the date of such Participant’s termination of service with the Company or a subsidiary or parent of the Company.  The Participant’s refusal to meet any of the conditions set forth in (a), (b), (c) or (d) above, or breach of any agreement entered into pursuant to (b) or (c) above, shall constitute a waiver by the Participant of the benefits attributable to Retirement under this Agreement.

Upon such substitution the Performance Shares shall terminate and be of no further force and effect.

If to Participant:

to Participant’s most recent address on the records of the Company

If to the Company:

Chipotle Mexican Grill, Inc.
1401 Wynkoop Street, Suite 500
Denver, CO 80202
Attn: Director – Compensation & Benefits
Facsimile: 303-222-2500

(or to such other address as the party in question shall from time to time designate by written notice to the other parties).

13.Compensation Recovery.   The Company may cancel, forfeit or recoup any rights or benefits of, or payments to, the Participant hereunder, including but not limited to any Shares issued by the Company following vesting of the Performance Shares under this Agreement or the proceeds from the sale of any such Shares, under any future compensation recovery policy that it may establish and maintain from time to time, to meet listing requirements that may be imposed in connection with the Dodd-Frank Wall Street Reform and Consumer Protection Act or otherwise.  The Company shall delay the exercise of its rights under this Section for the period as may be required to preserve equity accounting treatment.

14.Governing Law.    Except to the extent that provisions of the Plan are governed by applicable provisions of the Code or other substantive provisions of federal law, this Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Delaware without regard to the principles of conflicts of law thereof.



CHIPOTLE MEXICAN GRILL, INC.



                     /s/ Darlene Friedman

_________________________________________                                             

By: Darlene Friedman
Compensation Committee of the Board of Directors



Participant Name:



Participant





Signature Page to Performance Share Agreement

Appendix A to 2017 Performance Share Agreement



Name of Participant: 

Summary The Incentive Award under this Agreement consists of the following two components:

Stock Price Component refers the portion of the Incentive Award that is based on the Company’s Stock Price (as defined below) during the Performance Period.

CRS Component refers to the portion of the Incentive Award that is based on growth in Comparable Restaurant Sales (as defined below) during the Performance Period.  

Two-thirds (2/3rd) of the Target Number of Performance Shares (as defined in the Performance Share Award Agreement) is allocated to the Stock Price Component.  One-third (1/3rd)  of the Target Number of Performance Shares is allocated to the CRS Component.  Each of these components and the performance goals for threshold, target and maximum performance is described further below.  The features common to both components are described after that under the heading “Provisions Applicable to all Performance Shares.”

Stock Price Component

The number of shares earned under the Stock Price Component is equal to 2/3rd of the Target Number of Performance Shares multiplied by the Payout Percentage determined under the Performance Goal Table set forth below based on the Company’s Stock Price:

Performance Goal Table
for the Stock Price Component



For avoidance of doubt, no Performance Shares will be earned under the Stock Price Component Performance Goal Table set forth above if the Stock Price during the Performance Period is less than $600, and no more than 350% of the Target Number of Performance allocable to the Stock

Price Component will be earned under the Performance Goal Table set forth above if the Stock Price is more than $900. 

For purposes of this Appendix A, the Company’s “Stock Price” shall be equal to the highest rolling average (i.e., the arithmetic mean) of the closing prices of a share of Common Stock for any period of sixty (60) consecutive trading days during the Performance Period.  Any day that is not a trading day on the New York Stock Exchange shall be disregarded when determining the Stock Price.  

Notwithstanding anything to the contrary in this Appendix A, if the rolling average (i.e., the arithmetic mean) of the closing prices of a share of Common Stock for the last sixty (60) consecutive trading days of the Performance Period (disregarding any day that is not a trading day on the New York Stock Exchange is below $600, then the number of earned Performance Shares shall not be greater than at Target irrespective of whether a higher Stock Price was achieved earlier during the Performance Period.

CRS Component

The number of shares that can be earned under the CRS Component is equal to 1/3rd of the Target Number of Performance Shares multiplied by the Payout Percentage determined under the Performance Goal Table set forth below based on the Company’s Comparable Restaurant Sales or CRS:



Performance Goal Table
for the CRS Component



For avoidance of doubt, no Performance Shares will be earned under the CRS Component Performance Goal Table set forth above if the 3-Year CRS Growth is less than 5%, and no more than 300% of the Target Number of Performance allocable to the CRS Component will be earned under the Performance Goal Table set forth above if 3-Year CRS Growth is more than 11%.



For purposes of the Performance Goal Table under this Appendix A, “3-Year CRS Growth” shall be determined under the following formula:







(1+X)*(1+Y)*(1+Z)-1

3

Where:



“X” = the annual percentage change in the Comparable Restaurant Sales for the fiscal year ending December 31, 2017

“Y” = the annual percentage change in Comparable Restaurant Sales for the fiscal year ending December 31, 2018

“Z” = the annual percentage change in Comparable Restaurant Sales for the fiscal year ending December 31, 2019.



The following terms shall have the respective meanings set forth below when determining 3-Year CRS Growth:



“Comparable Restaurant” means a restaurant operated under the Chipotle Mexican Grill, Pizzeria Locale, and/or TastyMade brands by the Company or its direct or indirect Subsidiaries, beginning in such restaurant’s 13th full calendar month of operations.



“Comparable Restaurant Sales”, with respect to a fiscal year, means the net sales attributable to Comparable Restaurants that are realized during such year, as determined in accordance with generally  accepted accounting principles.  For avoidance of doubt, net sales from a restaurant shall only be counted after it has become a Comparable Restaurant.



Provisions Applicable to all Performance Shares



The Target Number of Performance Shares (and, with respect to the Stock Price Component, the dollar amounts designed in its Performance Goal Table) shall be adjusted to prevent the enlargement or dilution of rights under this Award Agreement due to any increase or decrease in issued shares of the Company’s Common Stock without consideration consistent with the terms of the Plan.



Straight-line interpolation shall be used to determine the Payout Percentage when the level of performance in a Performance Goal Table is between two stated levels in such table, and the Payout Percentage shall be expressed to the nearest tenth of a percent. For example, if the highest Stock Price during the Performance Period is $700, the Payout Percentage is 150%, which is the midpoint between the Payout Percentage at $650 per share and $750 per share.



Performance Shares that are earned under this Appendix A shall only be issued to the Participant to the extent that the continued employment conditions set forth in the Performance Share Agreement have been satisfied.