8-KLeadership ChangesMaterial AgreementsOther Events

CHIPOTLE MEXICAN GRILL INC 8-K Report, Material Agreement (Oct 18, 2006)

Filed October 18, 2006For Securities:CMG

Summary

This 8-K filing by Chipotle Mexican Grill, Inc. (CMG) on October 18, 2006, reports on significant corporate events following McDonald's Corporation's disposition of its ownership interest in Chipotle. Key developments include the adoption of a Supplemental Deferred Investment Plan for eligible management employees, allowing them to defer additional compensation beyond the 401(k) limits with company matching contributions. This plan aims to incentivize and retain key personnel by offering tax-deferred growth opportunities. Furthermore, the filing announces the resignation of Mats Lederhausen from the Board of Directors, a consequence of the McDonald's divestiture, and confirms this departure is amicable. Notably, Chipotle's Class B common stock began trading on the New York Stock Exchange under the ticker symbol CMGB on October 13, 2006, marking a significant step in its transition as an independent public company. The conversion of Class B shares to Class A shares has also been discontinued as per the company's charter.

Key Highlights

  • 1Chipotle adopted a Supplemental Deferred Investment Plan for eligible management, allowing contributions beyond 401(k) limits.
  • 2The new plan includes company matching contributions of 100% on the first 3% and 50% on the next 2% of base compensation deferrals.
  • 3Deferred amounts are invested and fluctuate with market performance, are fully vested upon contribution, and are taxed as ordinary income upon distribution.
  • 4Mats Lederhausen, representing McDonald's former interest, resigned from the Board of Directors, effective October 12, 2006.
  • 5This resignation is stated to be without disagreement with Chipotle's operations or policies.
  • 6Chipotle's Class B common stock started trading on the New York Stock Exchange (NYSE) under the symbol CMGB on October 13, 2006.
  • 7Class B common stock is no longer convertible into Class A common stock.

Frequently Asked Questions

The plan is designed for designated eligible management employees, including executive officers, who have maximized their contributions to the standard 401(k) plan. It allows them to defer additional compensation and certain incentive awards, providing a tax-deferred growth opportunity and a mechanism for retention and incentivization.

The plan involves Chipotle making matching contributions to employee deferral accounts. These amounts are considered unfunded, unsecured general obligations of the company to pay the value of the accounts in the future. The immediate cash impact is the matching contribution, while the future obligation depends on plan participation and investment performance.

Mats Lederhausen resigned from the Board of Directors in connection with McDonald's Corporation completing its disposition of its ownership interest in Chipotle. His resignation is not due to any disagreement with Chipotle or its operations.

This signifies Chipotle's debut as an independent publicly traded company following the separation from McDonald's. The listing on the NYSE provides liquidity and visibility for its Class B common stock, allowing investors to buy and sell shares freely under a new ticker symbol.