Employment Agreement - Rubio's Restaurants and John Fuller
May 23, 2003
Mr. John Fuller
20 Salinas
Foothill Ranch, CA 92610
Dear John:
I am pleased to confirm our offer of employment made to you for the position of
Chief Financial Officer for Rubio's Restaurants, Inc. (Rubio's) reporting
directly to me under the terms and conditions outlined below:
Start Date: June 16, 2003
Base Salary: An annual rate of $200,000, paid biweekly at a rate of $7,692.30
and subject to withholdings and deductions as required by law. Your salary will
be reviewed annually and may be adjusted based on such review.
Bonus Plan: For calendar year 2003, you will be eligible to earn up to 25% of
your base salary if pretax income equals or exceeds the budget range for bonus
in accordance with the Rubio's Fiscal 2003 Executive Bonus Plan (a summary copy
of which is enclosed). Additionally, 10% of pretax income above the high end of
this range for 2003 will be paid in accordance with the terms of such bonus plan
for 2003. The bonus plan will be adjusted if changes are made to GAAP or
accounting principles permitted by SEC rules. Both bonuses will be prorated by
the number of months you are employed with Rubio's for 2003. For calendar year
2004 and later calendar years, you will participate in the Executive Bonus Plans
developed for those years as ultimately approved by the Compensation Committee
of the Board of Directors.
You may also participate in other bonus or incentive plans adopted by Rubio's
that are applicable to your position. Bonus criteria for each subsequent year
will be mutually determined within a reasonable period of time at the close of
each fiscal year.
Stock Options: Stock Options for 100,000 shares of Rubio's Restaurants, Inc.
common stock, pursuant and subject to Rubio's 1999 Stock Incentive Plan, will be
granted to you on your Start Date at the closing market price on the date of the
grant. They will vest at 20% at the end of the first year and each month
thereafter for 48 months on a pro-rata basis.
Relocation of Household goods: You will be relocating to the San Diego area by a
mutually agreed upon time. You will be reimbursed for all applicable moving
expenses up to $100,000 which is expected to cover all reasonable and customary
relocation costs for you and your family (i.e., home sale, home purchase,
movement of household goods, temporary living expenses, interim travel to former
location expenses, etc.). Amounts above the allowable IRS reimbursements for
relocation will be grossed-up for taxes at the applicable state and federal tax
rates. You will need to submit relocation expense receipts to Rubio's Controller
who will work with you to mitigate the tax impact for both you and the Company.
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Automobile: Car allowance of $450 per month plus $0.15 per mile (exclusive of
commuter mileage).
Vacation: 10 days per year accrued pro-rata on a monthly basis.
Health Plans: You will be eligible to participate in Rubio's medical (including
Exec-U-Care), dental, employee assistance program (EAP), vision, and life
insurance programs (executive level term life insurance is two times annual
salary) effective the first day of the month following two consecutive months of
service. You will be reimbursed for any COBRA premiums incurred during this
waiting period.
Professional Reimbursements: You will be reimbursed for reasonable expenses
necessarily incurred in the performance of your duties, including, but not
limited to, cell phone service, long distance telephone service, facsimile and
duplication services, overnight and courier services, travel expenses, expenses
related to attendance at industry conferences and membership in industry
associations.
401(k) Plan: You will be eligible to participate in Rubio's 401(k) Plan
effective the first day of the month following two consecutive months of
service. Currently, after one year of service you will be matched at a rate of
25% of the first 6% of the salary you contribute. (Although our 401(k) plan
allows for up to 15% of compensation as an employee's contribution, you should
be aware that our most recent discrimination testing has limited actual
contributions for highly paid executives to approximately 1%.)
Meal Discount: You and your family will be eligible for a meal discount of 50%
for food consumed at Rubio's Restaurants.
At-Will Employment: Employment with Rubio's Restaurants, Inc. is not for a
specific term and can be terminated by you or the Company at any time and for
any reason, with or without cause or advanced notice. The At-Will nature of your
employment described in this offer letter shall constitute the entire agreement
between you and Rubio's concerning the nature and duration of your employment
and the circumstance under which you or the Company may terminate the employment
relationship. No oral statement by any person can change the At-Will nature of
your employment with Rubio's.
Although your job duties, title, and compensation benefits may change over time,
the At-Will term of your employment with Rubio's can only be changed in writing,
signed by you and the President or Chairman of the Company, and which expressly
states the intention to change the At-Will term of your employment. Any prior
representations to the contrary are superseded by the terms of this offer.
Confidentiality and Non-Solicitation: One of the conditions of your employment
with Rubio's is the maintenance of the confidentiality of Rubio's proprietary
and confidential information. You agree during and after the period of your
employment with Rubio's not to use, directly or indirectly, any confidential
information other than in the course of performing duties as an employee of
Rubio's. You further agree that during your term of employment and for two (2)
years thereafter, not to encourage or solicit, directly or indirectly, any
employee of Rubio's to leave the Company for any reason. You will be required to
execute the Company's Proprietary Information and Inventions Agreement on your
first day of employment.
Company Policy: As an employee of Rubio's, you will be required to comply with
all Company policies and procedures. In particular, you will be required to
familiarize yourself with and to comply with Rubio's policy prohibiting
harassment and discrimination and the policy concerning drugs and alcohol.
Violations of these policies may lead to immediate termination of employment.
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Arbitration: Rubio's maintains a policy of mandatory arbitration. This means
that any and all disputes that you may have with Rubio's, or any of Rubio's
other employees, which arise out of your employment will be resolved through
final and binding arbitration. This includes, without limitation, disputes
relating to offer letters, your employment by Rubio's or the termination
thereof, claims for breach of contract, claims for breach of covenant of good
faith and fair dealing, any claims of discrimination or harassment, any claims
under any federal, state or local law or regulation now in existence or
hereinafter enacted and amended from time to time concerning in any way the
subject of your employment with Rubio's or your termination. You agree that
arbitration shall be instead of any civil lawsuit and you waive your right to
pursue any and all employment-related claims in court.
This letter supersedes any prior agreements, representations or promises of any
kind, express or implied, concerning your employment and it constitutes the full
and complete agreement between you and the Company.
The foregoing offer of employment with Rubio's is contingent upon your
successful completion of a background and reference checks, pre-employment drug
and alcohol screen, your execution of this letter, the Company's Proprietary
Information and Inventions Agreement, the Company's Arbitration Agreement and
all other forms presented at the time of hire. This offer is further contingent
upon the Company's verification of the information provided to us in your
application form, resume and attachments, if any.
The existence and terms of this offer letter should remain confidential except
for disclosure to your spouse, attorneys, accountants and other tax or financial
professional advisors to whom the disclosure is necessary.
John, we are very excited about your joining our team. We are confident that you
have much to contribute to the success of Rubio's. The strength of our
organization, the quality and experience of our personnel, and your presence
will facilitate this success.
If you wish to accept our offer of employment on the terms described herein,
please acknowledge your acceptance by signing below and returning the original
to me within ten (10) business days. A copy of this letter has been enclosed for
your records. If you have any questions, please do not hesitate to contact me by
calling (760) 602-3625.
Sincerely,
/s/ Sheri Miksa
Sheri Miksa
President and Chief Operating Officer
Rubio's Restaurants, Inc.
I have read, understand and accept the terms and conditions of the above offer
of employment.
Accepted: /s/ John Fuller Date:
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John Fuller
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July 2, 2003
Mr. John Fuller
20 Salinas
Foothill Ranch, CA 92610
Dear John:
The following is an addendum to your offer letter dated May 23, 2003 as approved
by the Compensation Committee of the Board of Directors. All other terms of your
offer letter remain the same:
Severance Benefits: If your employment is terminated, without Cause or upon
Disability, as defined below, you will be paid, subject to signing our standard
release agreement, six (6) months of your salary in effect as of your
termination date, in thirteen (13) equal biweekly installments, and subject to
all appropriate deductions and withholdings. In addition, you will have
continued enrollment in the health and welfare plans (with the exception of the
401(k) plan as precluded by our Plan), including life insurance, for a period of
six months or until your eligibility under another employer's group benefit
plan, whichever event occurs first.
Disability: "Disability" means the medical determination that you are eligible
for benefits under the Company's long term disability insurance plan.
Cause: "Cause" means: (a) willful failure by you to substantially perform your
duties under this agreement, other than a failure resulting from your complete
or partial incapacity due to physical or mental illness or impairment (b)
conviction of or a plea of "guilty" or "no contest" to, a felony or crime
involving an act of moral turpitude, dishonesty, or misfeasance under the laws
of the United States or any state thereof; (c) refusal to follow, or material
neglect of, reasonable requests of the Company's Board of Directors or its
designee(s), if unremedied following thirty (30) days' written notice; (d)
conduct that substantially interferes with or damages the standing, reputation,
financial condition or prospects of the Company, after you have been given ten
(10) days' notice and an opportunity to respond; or (e) a material or willful
violation of a federal or state law or regulation applicable to the business of
the Company. If your employment is terminated without Cause you shall be paid
the Severance Benefits described above under Severance Benefits.
The following is not an addendum, but is being restated here for clarity:
At-Will Employment: Employment with Rubio's Restaurants, Inc. is not for a
specific term and can be terminated by you or the Company at any time and for
any reason, with or without cause or advanced notice. The At-Will nature of your
employment described in your original offer letter shall constitute the entire
agreement between you and Rubio's concerning the nature and duration of your
employment and the circumstance under which you or the Company may terminate the
employment relationship. No oral statement by any person can change the At-Will
nature of your employment with Rubio's.
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Although your job duties, title, and compensation benefits may change over time,
the At-Will term of your employment with Rubio's can only be changed in writing,
signed by you and the President or Chairman of the Company, and which expressly
states the intention to change the At-Will term of your employment. Any prior
representations to the contrary are superseded by the terms of this offer.
The existence and terms of your offer letter and this addendum should remain
confidential except for disclosure to your spouse, attorneys, accountants and
other tax or financial professional advisors to whom the disclosure is
necessary.
Sincerely,
/s/ Sheri Miksa
Sheri Miksa
President and Chief Operating Officer
Accepted: /s/ John Fuller Date:
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John Fuller
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