EXHIBIT 10.1

EMPLOYMENT, CONFIDENTIALITY AND NONCOMPETE AGREEMENT

This Employment, Confidentiality and Noncompete Agreement (“Agreement”) is made
and entered into effective as of the 1st day of July 2008, by and between
Build-A-Bear Workshop, Inc., a Delaware corporation (“Company”), and Eric Fencl
(“Employee”).

WHEREAS, Company desires to employ and Employee desires to be employed as the
Chief Bearrister – General Counsel of Company.

WHEREAS, Company has pioneered the retail concept of “make your own” stuff plush
toys, including animals and dolls, and is engaged in, among other things, the
business of production, marketing, promotion and distribution of plush stuff
toys, clothing, accessories and similar items, including without limitation, the
ownership, management, franchising, leasing and development of retail stores in
which the basic operation is the selling of such items, and the promotion of the
related concepts and characters through merchandising and mass media. The
Company is headquartered and its principal place of business are located in, and
this Agreement is being signed in, St. Louis, Missouri.

WHEREAS, Company conducts business in selected locations throughout the United
States and internationally through franchise arrangements.

WHEREAS, Company has expended a great deal of time, money and effort to develop
and maintain its proprietary Confidential Information (as defined herein) which
is material to Company and which, if misused or disclosed, could be very harmful
to Company’s business.

WHEREAS, the success of Company depends to a substantial extent upon the
protection of its Confidential Information and goodwill by all of its employees.

WHEREAS, Company compensates its employees to, among other things, develop and
preserve goodwill with its customers, landlords, suppliers and partners on
Company’s behalf and business information for Company’s ownership and use.

WHEREAS, if Employee were to leave Company, Company, in all fairness, would need
certain protections in order to prevent competitors of Company from gaining an
unfair competitive advantage over Company or diverting goodwill from Company, or
to prevent Employee from misusing or misappropriating the Confidential
Information.

NOW, THEREFORE, in consideration of the compensation and other benefits of
Employee’s employment by Company and the recitals, mutual covenants and
agreements hereinafter set forth, Employee and Company agree as follows:

1. Employment Services.

(a) Employee is hereby employed by Company, and Employee hereby accepts such
employment, upon the terms and conditions hereinafter set forth. Employee shall
serve as Chief Bearrister – General Counsel during the Employment Period, on a
full-time basis. Employee shall carry out such duties as are assigned to him by
Company’s Chief Executive Bear.

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(b) Employee agrees that throughout Employee’s employment with Company, Employee
will (i) faithfully render such services as may be delegated to Employee by
Company, (ii) devote substantially all of Employee’s entire business time, good
faith, best efforts, ability, skill and attention to Company’s business, and
(iii) follow and act in accordance with all of the rules, policies and
procedures of Company, including but not limited to working hours, sales and
promotion policies, and specific Company rules. Company further agrees that it
shall not during the Initial Term of this Agreement require Employee to relocate
his residence outside of the St. Louis metropolitan area.

(c) “Company” means Build-A-Bear Workshop, Inc. or one of its Subsidiaries,
whichever is Employee’s employer. The term “Subsidiary” means any corporation,
joint venture or other business organization in which Build-A-Bear Workshop,
Inc. now or hereafter, directly or indirectly, owns or controls more than fifty
percent (50%) interest.

2. Term of Employment. The term of this Agreement shall commence on the date
first set forth above, and shall end on the third anniversary hereof, unless
sooner terminated as provided in Section 4 hereof (the “Initial Term”).
Following the Initial Term, this Agreement shall renew for successive one-year
periods (each a “Renewal Period”; collectively, the Initial Term and each
Renewal Period, the “Employment Period”), unless either party notifies the other
party of its decision not to renew the Agreement at least 30 days prior to the
third anniversary date or the expiration of any Renewal Period, or unless the
Agreement is sooner terminated as provided in Section 4 hereof. For the
avoidance of doubt, if either party provides notice of non-renewal of the
Agreement at least 30 days prior to the end of the Initial Term or the end of
any Renewal Period, then the Agreement shall expire.

3. Compensation.

(a) Base Salary. During the Employment Period, Company shall pay Employee as
compensation for his services an annual base salary of not less than Two Hundred
Sixty Four Thousand Dollars ($264,000), payable in accordance with Company’s
usual practices. Employee’s annual base salary rate shall be reviewed by the
Compensation Committee of the Board of Directors (the “Compensation Committee”)
at least annually for increase following each fiscal year so that Employee’s
salary will be commensurate for similarly situated executives with firms
similarly situated to Company; provided, however, that if Employee’s
individualized performance targets (set for each fiscal year by Employee and
Employee’s team leader) are achieved, Employee’s annual base salary rate shall
not be subject to decrease at any time during the Employment Period and shall be
subject to annual increase by no less than the average percentage increase given
to all other Company executive employees for such fiscal year (the “Average
Increase”).

(b) Bonus. Should Company exceed the sales, profits and other objectives
established by Compensation Committee for any fiscal year, Employee shall be
eligible to receive a bonus for such fiscal year in the amount as determined by
the Compensation Committee; provided however the potential bonus opportunity for
Employee in any given fiscal year will be set by the Compensation Committee such
that, if the Company exceeds its objectives, the Company will pay Employee not
less than thirty five percent (35%) of Employee’s annual base pay for such
fiscal year. Any bonus payable to Employee will be payable in cash, stock or
stock options, or combination thereof, all as determined by the Board of
Directors or any duly authorized committee thereof, and unless a different
payout schedule is

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applicable for all executive employees of the Company, any such bonus payment
will be payable in a single, lump sum payment. In the event of termination of
this Agreement because of Employee’s death or disability (as defined by
Section 4.1(b)), termination by the Company without Cause pursuant to
Section 4.1(c), or pursuant to Employee’s right to terminate this Agreement for
Good Reason under Section 4.1(d), the bonus criteria shall not change and any
bonus shall be pro-rated based on the number of full calendar weeks during the
applicable fiscal year during which Employee was employed hereunder and shall be
paid at the time and in the form such bonus would have been paid had Employee’s
employment continued. No bonus shall be payable hereunder for any other
termination of employment by Executive prior to the last day of a fiscal year.

Such bonus, if any, shall be payable after Company’s accountants have determined
the sales and profits and have issued their audit report with respect thereto
for the applicable fiscal year, which determination shall be binding on the
parties. Any such bonus shall be paid within seventy-five (75) days after the
end of each calendar year, regardless of Employee’s employment status at the
time payment is due. If timely payment is not made, the Company shall indemnify
the Employee against any additional tax liability that the Employee may incur
proximately as a result of the payment being made after the seventy-five day
period.

(c) Stock Options. Employee may have been granted in the past, and/or may in the
future be granted, a certain number of restricted shares and/or stock options to
purchase shares of Company’s common stock (the “Common Stock”), pursuant to the
terms set forth more particularly in the stock option and/or restricted stock
agreements (“Stock Agreement”) used in connection with the Build-A-Bear
Workshop, Inc. 2004 Stock Incentive Plan (or any successor plan) (the “Plan”).
The Plan and applicable Stock Agreement(s) shall govern any grants of restricted
shares and/or stock options to purchase shares of Company’s Common Stock.

(d) Discounts. Employee and his immediate family will be entitled to a 20%
discount for all merchandise purchased at Company’s stores.

(e) Vacation. Employee shall be entitled to paid vacation and paid sick leave on
the same basis as may from time to time apply to other Company executive
employees generally. Vacations will be scheduled with the approval of Company’s
Chief Executive Bear, who may block out certain periods of time during which
vacations may not be taken, including preceding Valentine’s Day, preceding
Easter, from November 1 through December 31, during Company inventory, and just
prior to store openings. One-third of one year’s vacation (or any part of it)
may be carried over to the next year; provided that such carry over is used in
the first calendar quarter of the next year. Unless approved by the Chief
Executive Bear, all unused vacation shall be forfeited. No more than two weeks
of vacation can be taken at one time. Employee shall also be entitled to one
(1) additional day per calendar year of paid vacation to be taken in the month
of his birthday.

(f) Other. Employee shall be eligible for such other perquisites as may from
time to time be awarded to Employee by Company payable at such times and in such
amounts as Company, in its sole discretion, may determine. All such compensation
shall be subject to customary withholding taxes and other employment taxes as
required with respect thereto. During the Employment Period, Employee shall also
qualify for all rights and benefits for which Employee may be eligible under any
benefit plans including group life, medical, health, dental and/or disability
insurance or other benefits

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(“Welfare Benefits”) which are provided for employees generally at his then
current location of employment. Employee may, in his sole discretion, decline
any perquisite, Welfare Benefit, proposed annual salary increase, or bonus
payment.

4. Termination Provisions.

4.1 Termination of Employment. Prior to the expiration of the Employment Period,
this Agreement and Employee’s employment may be terminated as follows:

(a) Upon Employee’s death;

(b) By the Company upon thirty (30) day’s prior written notice to Employee in
the event Employee, by reason of permanent physical or mental disability (which
shall be determined by a physician selected by Company or its insurers and
acceptable to Employee or Employee’s legal representative (such agreement as to
acceptability not to be withheld unreasonably), shall be unable to perform the
essential functions of his position, with or without reasonable accommodation,
for six (6) consecutive months; provided, however, Employee shall not be
terminated due to permanent physical or mental disability unless or until said
disability also entitles Employee to benefits under such disability insurance
policy as is provided to Employee by Company, provided however that continued
entitlement to disability benefits coverage shall be not required where Employee
fails to qualify for benefits coverage continuation due to an act or omission by
Employee.

(c) By the Company with or without Cause. For the purposes of this Agreement,
“Cause” shall mean: (i) Employee’s engagement in any conduct which, in Company’s
reasonable determination, constitutes gross misconduct, or is illegal, unethical
or improper provided such conduct brings detrimental notoriety or material harm
to Company; (ii) gross negligence or willful misconduct; (iii) any act which
results in a conviction for a felony involving moral turpitude, fraud or
misrepresentation; (v) a material breach of a material provision of this
Agreement by Employee, or (v) failure of Employee to follow a written directive
of the Chief Executive Bear or the Board of Directors within thirty (30) days
after receiving such notice, provided that such directive is reasonable in scope
or is otherwise within the Chief Executive Bear’s or the Board’s reasonable
business judgment, and is reasonably within Employee’s control; provided
Employee does not cure said conduct or breach (to the extent curable) within
thirty (30) days after the Chief Executive Bear or the Board of Directors
provides Employee with written notice of said conduct or breach. In the event of
termination for Cause, the Employee will be afforded an opportunity prior to the
actual date of termination to discuss the matter with the Company.

(d) By the Employee with or without Good Reason. For purposes of this Agreement,
“Good Reason” shall mean (i) a material breach of a material provision of this
Agreement by Company, provided Company does not cure said breach within thirty
(30) days after Employee provides the Board of Directors with written notice of
the breach or (ii) Company’s issuance of a notice of non-renewal of this
Agreement under Section 2, which results in expiration of this Agreement and a
failure of Company and Employee to enter into a new written employment
agreement.

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4.2 Impact of Termination.

(a) Survival of Covenants. Upon termination of this Agreement, all rights and
obligations of the parties hereunder shall cease, except termination of
employment pursuant to Section 4 or otherwise shall not terminate or otherwise
affect the rights and obligations of the parties pursuant to Sections 5 through
13 hereof.

(b) Severance. In the event during the Employment Period (i) the Company
terminates Employee’s employment other than for Cause pursuant to Section 4.1(c)
or (ii) the Employee terminates his employment for Good Reason pursuant to
Section 4.1(d), the Company shall continue his base salary for a period of
twelve (12) months from termination, such payments to be reduced by the amount
of any compensation from a subsequent employer during such period. Employee
shall accept these payments in full discharge of all obligations of any kind
which Company has to him except obligations, if any (i) for post-employment
benefits expressly provided under this Agreement and/or at law, (ii) to
repurchase any capital stock of Company owned by Employee (as may or may not be
set forth in the applicable stock agreement); or (iii) for indemnification under
separate agreement by virtue of Employee’s status as a director/officer of the
Company. Employee shall also be eligible to receive a bonus with respect to the
year of termination as provided in Section 3(b).

Notwithstanding anything herein to the contrary, in the event that Employee is
determined to be a specified employee within the meaning of Section 409A of the
Internal Revenue Code of 1986, as amended (the “Code”), for purposes of any
payment on termination of employment hereunder, payment(s) shall be made or
begin, as applicable, on the first payroll date which is more than six months
following the date of separation from service, to the extent required to avoid
any adverse tax consequences under Section 409A of the Code. Any payments that
would have been made during such 6-month period shall be made in a lump sum on
the first payroll date which is more than six months following the date Employee
separates from service with Company.

(c) Termination due to Employee Non-Renewal of Term or Termination by Employee
without Good Reason. If the Agreement expires either at the end of the Initial
Term or at the end of any Renewal Period, due to the issuance of notice of
non-renewal by Employee under Section 2, then no severance under Section 4(b)
shall be paid to the Employee and his employment shall terminate upon the
anniversary date. If Employee terminates his employment without Good Reason,
then no severance under 4.2(b) shall be paid to Employee and his employment
shall terminate on the effective date of such termination.

(d) Welfare Benefits. Upon termination or expiration of this Agreement for any
reason, Employee shall be provided with such Welfare Benefits continuation
notices, rights and obligations as may be required under federal or state law
(including COBRA). During the period that Welfare Benefits are continued under
COBRA, the Company shall continue to pay the Company’s portion of the medical
plan premium for the benefit of Employee.

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5. Confidential Information.

(a) Employee agrees to keep secret and confidential, and not to use or disclose
to any third parties, except as directly required for Employee to perform
Employee’s employment responsibilities for Company, any of Company’s proprietary
Confidential Information.

(b) Employee acknowledges and confirms that certain data and other information
(whether in human or machine readable form) that comes into his possession or
knowledge (whether before or after the date of this Agreement) and which was
obtained from Company, or obtained by Employee for or on behalf of Company, and
which is identified herein (the “Confidential Information”) is the secret,
confidential property of Company. This Confidential Information includes, but is
not limited to:

(1) lists or other identification of customers or prospective customers of
Company;

(2) lists or other identification of sources or prospective sources of Company’s
products or components thereof, its landlords and prospective landlords and its
current and prospective alliance, marketing and media partners (and key
individuals employed or engaged by such parties);

(3) all compilations of information, correspondence, designs, drawings, files,
formulae, lists, machines, maps, methods, models, studies, surveys, scripts,
screenplays, artwork, sketches, notes or other writings, plans, leases, records
and reports;

(4) financial, sales and marketing data relating to Company or to the industry
or other areas pertaining to Company’s activities and contemplated activities
(including, without limitation, leasing, manufacturing, transportation,
distribution and sales costs and non-public pricing information);

(5) equipment, materials, designs, procedures, processes, and techniques used
in, or related to, the development, manufacture, assembly, fabrication or other
production and quality control of Company’s products, stores and services;

(6) Company’s relations with its past, current and prospective customers,
suppliers, landlords, alliance, marketing and media partners and the nature and
type of products or services rendered to, received from or developed with such
parties or prospective parties;

(7) Company’s relations with its employees (including, without limitation,
salaries, job classifications and skill levels); and

(8) any other information designated by Company to be confidential, secret
and/or proprietary (including without limitation, information provided by
customers, suppliers and alliance partners of Company).

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Notwithstanding the foregoing, the term Confidential Information shall not
consist of any data or other information which has been made publicly available
or otherwise placed in the public domain other than by Employee in violation of
this Agreement.

(c) During the Employment Period, Employee will not copy, reproduce or otherwise
duplicate, record, abstract, summarize or otherwise use, any papers, records,
reports, studies, computer printouts, equipment, tools or other property owned
by Company except as expressly permitted by Company in writing or required for
the proper performance of his duties on behalf of Company.

6. Post-Termination Restrictions. Employee recognizes that (i) Company has spent
substantial money, time and effort over the years in developing and solidifying
its relationships with its customers, suppliers, landlords and alliance,
marketing and media partners and in developing its Confidential Information;
(ii) long-term customer, landlord, supplier and partner relationships often can
be difficult to develop and require a significant investment of time, effort and
expense; (iii) Company has paid its employees to, among other things, develop
and preserve business information, customer, landlord, vendor and partner
goodwill, customer, landlord, vendor and partner loyalty and customer, landlord,
vendor and partner contacts for and on behalf of Company; and (iv) Company is
hereby agreeing to employ and pay Employee based upon Employee’s assurances and
promises not to divert goodwill of customers, landlords, suppliers or partners
of Company, either individually or on a combined basis, or to put himself in a
position following Employee’s employment with Company in which the
confidentiality of Company’s Confidential Information might somehow be
compromised. Accordingly, Employee agrees that during the Employment Period and
for the period of time set forth below following termination of employment,
provided termination is in accordance with the terms of paragraph 4.1(b), (c),
or (d), or due to expiration of the Agreement due to non-renewal by either
party, Employee will not, directly or indirectly (whether as owner, partner,
consultant, employee or otherwise):

(a) for one (1) year, engage in, assist or have an interest in, or enter the
employment of or act as an agent, advisor or consultant for, any person or
entity which is engaged in, or will be engaged in, the development, manufacture,
supplying or sale of a product, process, service or development which is
competitive with a product, process, service or development on which Employee
worked or with respect to which Employee has or had access to Confidential
Information while at Company (“Restricted Activity”), and which is located
within the United States or within any country where the Company has established
a retail presence either directly or through a franchise arrangement; or

(b) for one (1) year, induce or attempt to induce any employee, consultant,
partner or advisor of Company to accept employment or an affiliation with any
entity engaged in a Restricted Activity;

provided, however, that following termination of his employment, Employee shall
be entitled to be an employee of an entity that engages in Restricted Activity
so long as: (i) the sale of stuffed plush toys is not a material business of the
entity; (ii) Employee has no direct or personal involvement in the sale of
stuffed plush toys ; and (iii) neither Employee, his relatives, nor any other
entities with which he is affiliated own more than 1% of the entity. As used in
this paragraph 6, “material business” shall mean that either (A) greater than
10% of annual revenues received by such entity were derived from the sale of
stuffed plush toys and related products, or (B) the annual revenues received or
projected to be received by such entity from the sale of stuffed plush toys and
related products exceeded $10 million, or (C) or the entity otherwise annually
derives or is projected to derive annual revenues in excess of $5 million from a
retail concept that is similar in any material regard to Company.

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7. Acknowledgment Regarding Restrictions. Employee recognizes and agrees that
the restraints contained in Section 6 (both separately and in total), including
the geographic scope thereof in light of the Company’s marketing efforts, are
reasonable and enforceable in view of Company’s legitimate interests in
protecting its Confidential Information and customer goodwill and the limited
scope of the restrictions in Section 6.

8. Inventions.

Any and all ideas, inventions, discoveries, patents, patent applications,
continuation-in-part patent applications, divisional patent applications,
technology, copyrights, derivative works, trademarks, service marks,
improvements, trade secrets and the like (collectively, “Inventions”), which are
developed, conceived, created, discovered, learned, produced and/or otherwise
generated by Employee, whether individually or otherwise, during the time that
Employee is employed by Company, whether or not during working hours, that
relate to (i) current and anticipated businesses and/or activities of Company,
(ii) the current and anticipated research or development of Company, or
(iii) any work performed by Employee for Company, shall be the sole and
exclusive property of Company, and Company shall own any and all right, title
and interest to such Inventions. Employee assigns, and agrees to assign to
Company whenever so requested by Company, any and all right, title and interest
in and to any such Invention, at Company’s expense, and Employee agrees to
execute any and all applications, assignments or other instruments which Company
deems desirable or necessary to protect such interests, at Company’s expense.

(b) Employee acknowledges that as part of his work for the Company he may be
asked to create, or contribute to the creation of, computer programs,
documentation and other copyrightable works. Employee hereby agrees that any and
all computer programs, documentation and other copyrightable materials that he
has prepared or worked on for the Company, or is asked to prepare or work on by
the Company, shall be treated as and shall be a “work made for hire,” for the
exclusive ownership and benefit of Company according to the copyright laws of
the United States, including, but not limited to, Sections 101 and 201 of Title
17 of the U.S. Code (“U.S.C.”) as well as according to similar foreign laws.
Company shall have the exclusive right to register the copyrights in all such
works in its name as the owner and author of such works and shall have the
exclusive rights conveyed under 17 U.S.C. §§ 106 and 106A including, but not
limited to, the right to make all uses of the works in which attribution or
integrity rights may be implicated. Without in any way limiting the foregoing,
to the extent the works are not treated as works made for hire under any
applicable law, Employee hereby irrevocably assigns, transfers, and conveys to
Company and its successors and assigns any and all worldwide right, title, and
interest that Employee may now or in the future have in or to the works,
including, but not limited to, all ownership, U.S. and foreign copyrights, all
treaty, convention, statutory, and common law rights under the law of any U.S.
or foreign jurisdiction, the right to sue for past, present, and future
infringement, and moral, attribution, and integrity rights. Employee hereby
expressly and forever irrevocably waives any and all rights that he may have
arising under 17 U.S.C. §§ 106A, rights that may arise under any federal, state,
or foreign law that conveys rights that are similar in nature to those conveyed
under 17 U.S.C. §§ 106A, and any other type of moral right or droit moral.

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9. Company Property. Employee acknowledges that any and all notes, records,
sketches, computer diskettes, training materials and other documents relating to
Company obtained by or provided to Employee, or otherwise made, produced or
compiled during the Employment Period, regardless of the type of medium in which
they are preserved, are the sole and exclusive property of Company and shall be
surrendered to Company upon Employee’s termination of employment and on demand
at any time by Company.

10. Nondisparagement. Employee agrees that he will not in any way disparage
Company or its affiliated entities, officers, or directors. Further, Employee
agrees that he will neither make nor solicit any comments, statements, or the
like to the media or to third parties that may be considered to be derogatory or
detrimental to the good name or business reputation of Company or any of its
affiliated entities, officers or directors.

11. Non-Waiver of Rights. Either party’s failure to enforce at any time any of
the provisions of this Agreement or to require at any time performance by the
other party of any of the provisions hereof shall in no way be construed to be a
waiver of such provisions or to affect either the validity of this Agreement, or
any part hereof, or the right of the non-breaching party thereafter to enforce
each and every provision in accordance with the terms of this Agreement.

12. Company’s Right to Injunctive Relief. In the event of a breach or threatened
breach of any of Employee’s duties and obligations under the terms and
provisions of Sections 5, 6, or 8 hereof, Company shall be entitled, in addition
to any other legal or equitable remedies it may have in connection therewith
(including any right to damages that it may suffer), to temporary, preliminary
and permanent injunctive relief restraining such breach or threatened breach.
Employee hereby expressly acknowledges that the harm which might result to
Company’s business as a result of any noncompliance by Employee with any of the
provisions of Sections 5, 6 or 8 would be largely irreparable. Employee
specifically agrees that if there is a question as to the enforceability of any
of the provisions of Sections 5, 6 or 8 hereof, Employee will not engage in any
conduct inconsistent with or contrary to such Sections until after the question
has been resolved by a final judgment of a court of competent jurisdiction.

13. Judicial Enforcement. If any provision of this Agreement is adjudicated to
be invalid or unenforceable under applicable law in any jurisdiction, the
validity or enforceability of the remaining provisions thereof shall be
unaffected as to such jurisdiction and such adjudication shall not affect the
validity or enforceability of such provisions in any other jurisdiction. To the
extent that any provision of this Agreement is adjudicated to be invalid or
unenforceable because it is overbroad, that provision shall not be void but
rather shall be limited only to the extent required by applicable law and
enforced as so limited. The parties expressly acknowledge and agree that this
Section is reasonable in view of the parties’ respective interests.

14. Employee Representations. Employee represents that the execution and
delivery of the Agreement and Employee’s employment with Company do not violate
any previous employment agreement or other contractual obligation of Employee.
Employee further represents and agrees that he will not, during his employment
with Company, improperly use or disclose any proprietary information or trade
secrets of former employers and will not bring on to the premises of the Company
any unpublished documents or any property belonging to his former employers
unless consented to in writing by such employers.

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15. Amendments. No modification, amendment or waiver of any of the provisions of
this Agreement shall be effective unless in writing specifically referring
hereto, and signed by the parties hereto. This Agreement supersedes all prior
agreements and understandings between Employee and Company to the extent that
any such agreements or understandings conflict with the terms of this Agreement.

16. Assignments. This Agreement shall be freely assignable by Company to and
shall inure to the benefit of, and be binding upon, Company, its affiliates,
successors and assigns and/or any other entity which shall succeed to the
business presently being conducted by Company. Being a contract for personal
services, neither this Agreement nor any rights hereunder shall be assigned by
Employee.

17. Choice of Forum and Governing Law. In light of Company’s substantial
contacts with the State of Missouri, the parties’ interests in ensuring that
disputes regarding the interpretation, validity and enforceability of this
Agreement are resolved on a uniform basis, and Company’s execution of, and the
making of, this Agreement in Missouri, the parties agree that: (i) any
litigation involving any noncompliance with or breach of the Agreement, or
regarding the interpretation, validity and/or enforceability of the Agreement,
shall be filed and conducted in the state or federal courts in St. Louis City or
County, Missouri; and (ii) the Agreement shall be interpreted in accordance with
and governed by the laws of the State of Missouri, without regard for any
conflict of law principles.

18. Notices. Except as otherwise provided for herein, any notices to be given by
either party to the other shall be affected by personal delivery in writing or
by mail, registered or certified, postage prepaid, with return receipt
requested. Mailed notices shall be addressed as follows:

a. If to Company:

Maxine Clark

Chief Executive Bear

1954 Innerbelt Business Center

St. Louis, MO 63114

b. If to Employee:

Eric Fencl

19. Arbitration. Any controversy or claim arising out of, or relating to this
Agreement, the breach thereof, or Employee’s employment by Company, shall, at
Company’s sole option, be settled by binding arbitration in the County of St.
Louis in accordance with the rules then in force of the American Arbitration
Association, and judgment upon the award rendered may be entered and enforced in
any court having jurisdiction thereof. The controversies or claims subject to
arbitration at Company’s option under this Agreement include, without
limitation, those arising under Title VII of the Civil Rights Act of 1964, 42
U.S.C. Section 1981, the Age Discrimination in Employment Act, the Americans
with Disabilities Act, the Family and Medical Leave Act, the

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Worker Adjustment and Retraining Notification Act, the Missouri Human Rights
Act, local laws governing employment, and the statutory and/or common law of
contract and tort. In the event Employee commences any action in court which
Company has the right to submit to binding arbitration, Company shall have sixty
(60) days from the date of service of a summons and complaint upon Company to
direct in writing that all or any part of the dispute be arbitrated. Any remedy
available in any court action shall also be available in arbitration.

20. Headings. Section headings are provided in this Agreement for convenience
only and shall not be deemed to substantively alter the content of such
sections.

PLEASE NOTE: BY SIGNING THIS AGREEMENT, EMPLOYEE IS HEREBY CERTIFYING THAT
EMPLOYEE (A) HAS RECEIVED A COPY OF THIS AGREEMENT FOR REVIEW AND STUDY BEFORE
EXECUTING IT; (B) HAS READ THIS AGREEMENT CAREFULLY BEFORE SIGNING IT; (C) HAS
HAD SUFFICIENT OPPORTUNITY BEFORE SIGNING THE AGREEMENT TO ASK ANY QUESTIONS
EMPLOYEE HAS ABOUT THE AGREEMENT AND HAS RECEIVED SATISFACTORY ANSWERS TO ALL
SUCH QUESTIONS; AND (D) UNDERSTANDS EMPLOYEE’S RIGHTS AND OBLIGATIONS UNDER THE
AGREEMENT.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the day and year first above written.

THIS AGREEMENT CONTAINS A BINDING ARBIRTARTION PROVISION WHICH MAY BE ENFORCED
BY COMPANY.

/s/ Eric R. Fencl Eric Fencl Address: BUILD-A-BEAR WORKSHOP, INC. By:   /s/
Maxine Clark   Name:   Maxine Clark   Title:   Chief Executive Bear