Build-A-Bear Workshop, Inc. Exhibit 10.1 to Form 8K




Exhibit 10.1




















BUILD-A-BEAR WORKSHOP,
INC.
2004 STOCK INCENTIVE PLAN 

as amended and
restated effective July 27, 2005 




























BUILD-A-BEAR WORKSHOP,
INC.

2004 STOCK INCENTIVE PLAN 



Table of Contents 



	 		Page 	  




	1. 	Purpose of the Plan 	1 	  




	2. 	Definitions 	1 	  
	 	A.     “Act”	1 	  
	 	B.     “Award”	1 	  
	 	C.     “Award Agreement”	1 	  
	 	D.     “Board”	1 	  
	 	E.     “Cash-Based Award”	1 	  
	 	F.     “Change in Control”	2	  
	 	G.     “Code”	2	  
	 	H.     “Committee”	2	  
	 	I.     “Company”	2	  
	 	J.     “Employer”	2	  
	 	K.     “Fair Market Value”	2	  
	 	L.     “Incentive Stock Option”	3	  
	 	M.     “Non-qualified Stock Option”	3	  
	 	N.     “Option”	3	  
	 	O.     “Other Stock-Based Award”	3	  
	 	P.     “Parent”	3	  
	 	Q.     “Participant”	3	  
	 	R.     “Performance Based Award”	3	  
	 	S.     “Plan”	3	  
	 	T.     “Public Offering”	3	  
	 	U.     “Statutory Option Stock”	3	  
	 	V.     “Stock”	3	  
	 	W.     “Stock Appreciation Right”	3	  
	 	X.     “Subsidiary”	4	  





	3. 	Stock Subject to the Plan 	4 	  





	4. 	Administration 	4 	  





	5. 	Committee 	5 	  




	6. 	Options 	5 	  
	 	A.     “Type of Option”	5 	  
	 	B.     “Option Prices”	5 	  
	 	C.     “Exercise - Elections and Restrictions”	6	  
	 	D.     “Option Terms”	6	  






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	 	E.     “Successive Option Grants”	7	  
	 	F.     “Additional Incentive Stock Option Requirements”	7	  
	 	G.     “Deferral of Gain on a Non-qualified Stock Option”	8	  





	7. 	Stock Appreciation Rights 	8 	  
	 	A.     “Grant Terms” 	8 	  
	 	B.     “Exercise Terms” 	8 	  
	 	C.     “Limitations” 	9 	  




	8. 	Other Stock-Based Awards and Cash-Based Awards 	9 	  




	9. 	Performance-Based Awards	9 	  




	10. 	Nontransferability of Awards	10	  




	11. 	Investment Purpose 	10 	  
	 	A.     “Right of First Refusal” 	11	  
	 	B.     “Take-Along Rights” 	12	  
	 	C.     “Effect of Prohibited Transfer” 	12	  
	 	D.     “Buy-Back Rights” 	12	  
	 	E.     “Exceptions to Transfer Restrictions” 	12	  
	 	F.     “Termination of Transfer Restrictions” 	12	  




	12. 	Adjustments Upon Changes in Capitalization or Corporation Acquisitions	12	  




	13. 	Amendment and Termination	13	  




	14. 	Effectiveness of the Plan	13	  




	15. 	Time of Granting of an Award 	14	  




	16. 	Term of Plan	14	  




	17. 	Severability	14	  




	18. 	Non-Waiver of Rights	14	  




	19. 	Assignment	14	  




	20. 	No Right To Continued Employment or Other Status	15	  




	21. 	Choice of Laws	15	  





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BUILD-A-BEAR WORKSHOP,
INC.2004 
STOCK INCENTIVE PLAN 



        WHEREAS,
the Company previously adopted the Build-A-Bear Workshop, Inc. 2004 Stock Incentive Plan
(“Plan”); and 



        WHEREAS,
in accordance with Section 13 of the Plan, the Board of Directors of the Company or any
duly appointed Committee thereof (“Board”) may at any time make such amendments
or modifications to the Plan as it shall deem advisable; provided, however, that if and
solely if such approval is required by applicable law, then to the extent such approval is
so required, such amendment or modification shall be made subject to approval by the
holders of Stock; and 



        WHEREAS,
the Board deems it advisable to amend the Plan in certain respects and to completely
restate the Plan effective July 27, 2005; 



        NOW,
THEREFORE, the Plan is hereby amended and restated as follows: 




          	1. 	
               Purpose of the Plan. 



               





        The
purpose of the Plan is to provide the Company with a means to assist in recruiting,
retaining and rewarding certain employees, directors and consultants and to motivate such
individuals to exert their best efforts on behalf of the Employer by providing incentives
through the granting of Awards. By granting Awards to such individuals, the Company
expects that the interests of the recipients will be better aligned with those of the
Employer. 



          	2. 	
               Definitions. 



               




        Unless
the context clearly indicates otherwise, the following capitalized terms shall have the
meanings set forth below: 



          	A. 	  	
               “Act” means the Securities Exchange Act of 1934, as amended, or any
               successor thereto. 



               



          	B. 	  	
               “Award” means a grant under the Plan of an Option, Stock Appreciation
               Right, Cash-Based Award or Other Stock-Based Award. 



               



          	C. 	  	
               “Award Agreement” means an agreement entered into between the Employer
               and a Participant, or a certificate issued by the Employer as determined by the
               Committee, as such agreement or certificate may be amended from time to time,
               setting forth the terms and provisions applicable to Awards granted under the
               Plan. 



               



          	D. 	  	
               “Board” means the Board of Directors of the Company or any duly
               appointed Committee thereof. 



               



          	E. 	  	
               “Cash-Based Award” means an Award described in Section 8 as a
               Cash-Based Award. 



               














          	F. 	  	
               “Change in Control” means (i) the purchase or other acquisition (other
               than from the Company) by any person, entity or group of persons, within the
               meaning of Section 13(d) or 14(d) of the Act (excluding, for this purpose, the
               Company or its subsidiaries or any employee benefit plan of the Company or its
               subsidiaries), of beneficial ownership (within the meaning of Rule 13d-3
               promulgated under the Act) of 20% or more of either the then-outstanding shares
               of common stock of the Company or the combined voting power of the
               Company’s then-outstanding voting securities entitled to vote generally in
               the election of directors; or (ii) individuals who, as of the date hereof,
               constitute the Board (and, as of the date hereof, the “Incumbent
               Board”) cease for any reason to constitute at least a majority of the
               Board, provided that any person who becomes a director subsequent to the date
               hereof whose election, or nomination for election by the Company’s
               stockholders, was approved by a vote of at least a majority of the directors
               then comprising the Incumbent Board (other than an individual whose initial
               assumption of office is in connection with an actual or threatened election
               contest relating to the election of directors of the Company, as such terms are
               used in Rule 14a-11 of Regulation 14A promulgated under the Act) shall be, for
               purposes of this section, considered as though such person were a member of the
               Incumbent Board; or (iii) approval by the stockholders of the Company of a
               reorganization, merger or consolidation, in each case with respect to which
               persons who were the stockholders of the Company immediately prior to such
               reorganization, merger or consolidation do not, immediately thereafter, own more
               than 50% of, respectively, the common stock and the combined voting power
               entitled to vote generally in the election of directors of the reorganized,
               merged or consolidated corporation’s then-outstanding voting securities, or
               of a liquidation or dissolution of the Company or of the sale of all or
               substantially all of the assets of the Company. 



               



          	G. 	  	
               “Code” means the Internal Revenue Code of 1986, as amended, or any
               successor thereto. 



               



          	H. 	  	
               “Committee” means the committee described in Section 5 or, in the
               absence of any such Committee, the Board. 



               



          	I. 	  	
               “Company” means Build-A-Bear Workshop, Inc., a Delaware corporation. 



               



          	J. 	  	
               “Employer” means the Company and any other entity directly or
               indirectly controlling, controlled by, or under common control with, the Company
               or any other entity designated by the Board in which the Company has an
               interest. 



               



          	K. 	  	
               “Fair Market Value” means (i) if there should be a public market for
               the relevant Stock on the determination date, the arithmetic mean between the
               high and lows of prices of such Stock as reported on such date on the Composite
               Tape of the principal national securities exchange or, if applicable, the NASDAQ
               National Market on which such Stock is listed or admitted to trading, or, if
               such Stock is not listed or admitted on any national securities exchange or the
               NASDAQ National Market, the arithmetic mean of the per share closing bid price
               and per 



               







2











          		  	
share closing asked price on such date as quoted on the National
               Association of Securities Dealers Automated Quotation System (or such market in
               which such prices are regularly quoted) (“NASDAQ”), or if no sale of
               such shares shall have been reported on the Composite Tape of any national
               securities exchange or the NASDAQ National Market or quoted on the NASDAQ on
               such date, then the immediately preceding date on which sales of such shares
               have been so reported or quoted shall be used, and (ii) if there should not be a
               public market for the Stock on such date, the value established by the Committee
               in good faith. 



               



          	L. 	  	
               “Incentive Stock Option” means a stock option which is an incentive
               stock option within the meaning of Code Section 422. 



               



          	M. 	  	
               “Non-qualified Stock Option” means a stock option which is not an
               Incentive Stock Option. 



               



          	N. 	  	
               “Option” means both an Incentive Stock Option and a Non-Qualified
               Stock Option. 



               



          	O. 	  	
               “Other Stock-Based Award” means an Award granted pursuant to Section 8
               and described as an Other Stock-Based Award. 



               



          	P. 	  	
               “Parent” means any corporation (other than the Company) in an unbroken
               chain of corporations ending with the Company if, at the time of the granting of
               the Option, each of the corporations other than the Company owns stock
               possessing 50% or more of the total combined voting power of all classes of
               stock in one of the other corporations in such chain, or such other meaning as
               may be hereafter ascribed to it in Code Section 424. 



               



          	Q. 	  	
               “Participant” means an employee, director or consultant of the
               Employer who is selected by the Committee to receive an Award. 



               



          	R. 	  	
               “Performance Based Award” means an Award issued pursuant to the terms
               of Section 9. 



               



          	S. 	  	
               “Plan” means the Build-A-Bear Workshop, Inc. 2004 Stock Incentive
               Plan. 



               



          	T. 	  	
               “Public Offering” means the creation of an active trading market in
               Common Stock by the sale of Common Stock to the public pursuant to a
               registration statement under the Securities Act of 1933. 



               



          	U. 	  	
               “Statutory Option Stock” means any stock acquired through the exercise
               of an Incentive Stock Option or an option granted under an employee stock
               purchase plan as defined in Code Section 423. 



               



          	V. 	  	
               “Stock” means the common stock, par value of $0.01 per share, of the
               Company. 



               



          	W. 	  	
               “Stock Appreciation Right” means a stock appreciation right described
               in Section 7. 



               





3













          	X. 	  	
               “Subsidiary” means any corporation or other legal entity (other than
               the Company) in an unbroken chain of corporations or other legal entities
               beginning with the Company if, at the time of granting an Award, each of the
               corporations or other legal entities other than the last corporation or other
               legal entity in the unbroken chain owns stock possessing 50% or more of the
               total combined voting power of all classes of stock or other equity in one of
               the other corporations or other legal entities in such chain, or such other
               meaning as may be hereafter ascribed to it in Code Section 424. 



               



          	3. 	
               Stock Subject to the Plan. 



               



        The
number of shares of Stock allocated to the Plan and reserved to satisfy Awards under the
Plan shall be the remainder of (i) three million seven hundred thousand (3,700,000) shares
of Stock less (ii) the sum of (a) and (b) where (a) is the sum of the number of shares of
Stock with respect to which options have been awarded under the Build-A-Bear Workshop,
Inc. 2000 Stock Option Plan and the number of shares of Stock with respect to which
options have been awarded under the Build-A-Bear Workshop, Inc. 2002 Stock Incentive Plan,
reduced by the number of shares of such Stock awarded pursuant to options which have
expired, lapsed or been forfeited, and (b) is the number of shares of Stock awarded
pursuant to a restricted stock agreement reduced by the number of shares of such Stock
granted pursuant to awards which have expired, lapsed or been forfeited. The maximum
number of shares of Stock subject to Awards which are Options and Stock Appreciation
Rights which may be granted during a calendar year to a Participant shall be Three Hundred
Thousand (300,000). Notwithstanding the preceding, in no event shall the number of shares
of Stock awarded to Participants under the Plan, when taken in combination with the number
of outstanding shares of Stock previously issued by the Company, a Parent or Subsidiary to
employees of the Company, a Parent or Subsidiary, exceed the limit specified in the
Company Charter. The Company may, in its discretion, use shares held in the treasury or
shares acquired on the public market, if applicable, in lieu of authorized but unissued
shares. If any Award shall expire or terminate for any reason, the shares subject to the
Award shall again be available for the purposes of the Plan. Any shares of Stock which are
used by a Participant as full or partial payment to the Company to satisfy a purchase
price related to an Award shall again be available for the purposes of the Plan. To the
extent any shares subject to an Award are not delivered to a Participant because such
shares are used to satisfy an applicable tax-withholding obligation, such withheld shares
shall again be available for the purposes of the Plan. 




          	4. 	
               Administration.. 



               




        The
Plan shall be administered by the Committee. Subject to the express provisions of the
Plan, the Committee shall have plenary authority, in its discretion, to determine the
individuals to whom, and the time or times at which, Awards shall be granted and the
number of shares, if applicable, to be subject to each Award. In making such
determinations, the Committee may take into account the nature of services rendered by the
respective individuals, their present and potential contributions to the Employer’s
success and such other factors as the Committee, in its discretion, shall deem relevant.
Subject to the express provisions of the Plan, the Committee shall also have plenary
discretionary authority to interpret the Plan, to prescribe, amend and rescind rules and
regulations relating to it, to determine the terms and provisions of 







4











the respective Award
Agreements (which need not be identical), to waive or amend any provision hereof in any
manner not adversely affecting the rights granted to the Participant by the express terms
hereof and to make all other determinations necessary or advisable for the administration
of the Plan. The Committee’s determinations on the matters referred to in this
Section 4 shall be conclusive. Notwithstanding anything herein to the contrary, Chief
Executive Bear and Chief Operating Officer Bear are specifically designated under the Plan
to have plenary authority, in her or his discretion, as applicable, to also determine
individuals, other than themselves, to whom, and the time or times at which, Awards shall
be granted and the number of shares, if applicable, subject to such Award. 




          	5. 	
               Committee.. 



               




        The
Committee shall be comprised of directors appointed by the Board, which may from time to
time appoint members of the Committee in substitution for members previously appointed and
may fill vacancies, however caused, in the Committee. The Board shall select one of the
Committee members as its Chairman, and shall hold its meetings at such times and places as
it may determine. A majority of its members shall constitute a quorum. All determinations
of the Committee shall be made by a majority of its members present at any meeting at
which there is a quorum. Any decision or determination reduced to writing and signed by
all of the members shall be fully as effective as if it had been made by a majority vote
at a meeting duly called and held. The Committee may appoint a secretary, shall keep
minutes of its meetings and shall make such rules and regulations for the conduct of its
business as it shall deem advisable. The Committee may, to the extent permitted by law,
delegate its responsibilities and authority hereunder to an executive officer of the
Company. All decisions by the Committee shall be made in the Committee’s sole
discretion and shall be final and binding on all persons having or claiming any interest
in the Plan or in any Award. No person acting pursuant to the authority delegated by the
Committee shall be liable for any action or determination relating to or under the Plan
made in good faith. 



          	6. 	
               Options.. 



               





        The
Committee, in its discretion, may grant Options which are Incentive Stock Options or
Non-qualified Stock Options, as evidenced by the Award Agreement, and shall be subject to
the foregoing and the following terms and conditions and to such other terms and
conditions, not inconsistent therewith, as the Committee shall determine: 



          	A. 	  	
               Type of Option. Incentive Stock Options may be granted to any individual
               classified by the Committee as an employee of the Company, a Parent or a
               Subsidiary. A Non-Qualified Stock Option may be granted to any individual
               selected by the Committee. 



               



          	B. 	  	
               Option Prices. The purchase price of the Stock under each Incentive Stock Option
               shall not be less than 100% of the Fair Market Value of the Stock at the time of
               the granting of the Option; provided that, in the case of a Participant who owns
               more than 10% of the total combined voting power of all classes of stock of the
               Company, a Parent or a Subsidiary, the purchase price of the Stock under each
               Incentive Stock Option shall not be less than 110% of the Fair Market Value of



               






5












          		  	
               the Stock on the date such Option is granted. The purchase price of the Stock
               under each Non-qualified Stock Option shall be determined from time to time by
               the Committee, which need not be uniform for all Participants. 



               



          	C. 	  	
               Exercise — Elections and Restrictions. Options may be exercised by delivery
               to the Company of a written notice of exercise signed by the proper persons or
               by any other form of notice (including electronic notice) approval by the
               Committee together with payment in full as described in this Section 6(c). 



               



	  	
The
purchase price for an Option is to be paid in full upon the exercise of the Option, either
(i) in cash, (ii) in the discretion of the Committee, by the tender to the Company (either
actual or by attestation) of shares of Stock already owned by the Participant for a period
of at least six months as of the date of tender and registered in his or her name, having
a Fair Market Value equal to the cash exercise price of the Option being exercised, or
(iii) in the discretion of the Committee, by any combination of the payment methods
specified in clauses (i) and (ii) hereof; provided that, no shares of Statutory Option
Stock may be tendered in exercise of an Incentive Stock Option unless (a) such shares have
been held by the Participant for at least one year and (b) at least two years have elapsed
since such Statutory Option Stock was granted; [and provided further that, unless
otherwise specifically provided in an Award Agreement, [until such time as a Public
Offering shall occur, the only method of payment of the purchase price for an Option shall
be cash.] The Committee may, after consideration of any potential accounting consequences,
cause the Company to loan the option price to the Participant or to guaranty that any
shares to be issued will be delivered to a broker or lender in order to allow the
Participant to borrow the option price. Unless otherwise provided in the Award Agreement,
at the request of a Participant, the Committee may, to the extent permissible under
applicable state law, in its sole discretion, allow the Participant to defer payment in
full of the option price at the time the Participant provides written notice of exercise
provided that the notice of exercise directs that the certificate or certificates for the
shares of Stock for which the Option is exercised be delivered to a licensed broker
acceptable to the Company as the agent for the individual exercising the Option and, at
the time such certificate or certificates are delivered, the broker tenders to the Company
cash (or cash equivalents acceptable to the Company) equal to the option price for the
shares of Stock purchased pursuant to the exercise of the Option plus the amount (if any)
of any withholding obligations on the part of the Company. The proceeds of sale of Stock
subject to the Option are to be added to the general funds of the Company or to the shares
of the Stock held in its Treasury, and used for its corporate purposes as the Board shall
determine. 






          	D. 	  	
               Option Terms. The term of each Option shall not be more than ten (10) years from
               the date of granting thereof or such shorter period as is prescribed in the
               Award Agreement; provided that, in the case of a Participant who owns more than
               ten percent (10%) of the total combined voting power of all classes of stock of
               the Company, a Parent or a Subsidiary, the term of any Incentive Stock Option
               shall not be more than five (5) years from the date of granting thereof or such
               shorter 



               






6













          		  	
period as prescribed in the Award Agreement. Within such limit, Options
               will be exercisable at such time or times, and subject to such terms,
               restrictions and conditions, as the Committee shall, in each instance, approve,
               which need not be uniform for all Participants. To the extent Options are
               subject to restrictions, Options shall vest in whole shares only, and the holder
               of an Option shall not be deemed vested in any fractional share regardless of
               anything to the contrary in any Award Agreement. The holder of an Option shall
               have none of the rights of a stockholder with respect to the shares subject to
               Option until such shares shall be issued to him or her upon the exercise of his
               or her Option. Upon exercise of an Option, the Committee shall withhold a
               sufficient number of shares to satisfy the Company’s minimum required
               statutory withholding obligations for any taxes incurred as a result of such
               exercise (based on the minimum statutory withholding rates for federal and state
               tax purposes, including payroll taxes); provided that, in lieu of all or part of
               such withholding, the Participant may pay an equivalent amount of cash to the
               Company. 



               



          	E. 	  	
               Successive Option Grants. As determined by the Committee, successive option
               grants may be made to any Participant under the Plan. 



               



          	F. 	  	
               Additional Incentive Stock Option Requirements. 



               



          	(1) 	  	
               Grant Limits. The maximum aggregate Fair Market Value (determined at the time an
               Option is granted) of the Stock with respect to which Incentive Stock Options
               are exercisable for the first time by a Participant during any calendar year
               (under all plans of the Company, a Parent and a Subsidiary) shall not exceed
               $100,000. 



               



          	(2) 	  	
               Notice of Disposal. A Participant who disposes of Stock acquired upon the
               exercise of an Incentive Stock Option either (i) within two years after the date
               of grant of such Incentive Stock Option or (ii) within one year after the
               transfer of such shares to the Participant upon exercise, shall notify the
               Company of such disposition and of the amount realized upon such disposition. 



               



          	(3) 	  	
               Termination of Participant’s Employment. The holder of any Option issued
               hereunder must exercise the Option prior to his or her termination of
               employment, except that if the employment of a Participant terminates with the
               consent and approval of his or her Employer, the Committee may, in its absolute
               discretion, permit the Participant to exercise his or her Option, to the extent
               that he or she was entitled to exercise it at the date of such termination of
               employment, at any time within three (3) months or such longer period as
               approved by the Committee after such termination, but not after ten (10) years
               (or five (5) years, if applicable) from the date of the granting thereof.
               Notwithstanding the preceding, the Committee may, in a Participant’s Award
               Agreement, afford a Participant who terminates employment other than for cause,
               the right to exercise his or her Option, to the extent that he or she was
               entitled to exercise it at such 



               






7












          		  	
date of termination of employment, at any time
               within three (3) months or such longer period as approved by the Committee after
               such termination, but not after ten (10) years (or five (5) years, if
               applicable) from the date of granting thereof. 



               



          	(4) 	  	
               Death of Participant. In the event of the death of a Participant during the term
               of an Award Agreement and while he or she is employed by the Company (or its
               Parent or a Subsidiary), any outstanding option shall become fully vested (if
               not already fully vested) and may be exercised by a legatee or legatees of the
               Participant under his or her last will, or by his or her personal
               representatives or distributees, at any time within a period of one year after
               his or her death, but not after ten (10) years from the date of grant as
               specified in the Award Agreement, and only if he or she was entitled to exercise
               the option at the date of his or her death. The Committee may, in any Award
               Agreement, provide additional provisions for the exercise of an Option after the
               death of a Participant. 



               



          	G. 	  	
               Deferral of Gain on a Non-qualified Stock Option. In accordance with the terms
               of the applicable non-qualified deferred compensation plan, if any, in which a
               Participant is eligible to participate, a Participant may elect to defer any
               gain realized upon the exercise of a Non-qualified Stock Option. The election to
               defer the gain must be made in accordance with the applicable non-qualified
               deferred compensation plan. 



               



          	7. 	
               Stock Appreciation Rights. 



               



          	A. 	  	
               Grant Terms. The Committee may grant a Stock Appreciation Right independent of
               an Option or in connection with an Option or a portion thereof. A Stock
               Appreciation Right granted in connection with an Option or a portion thereof
               shall cover the same shares of Stock covered by the Option, or a lesser number
               as the Committee may determine. A Stock Appreciation Right shall be subject to
               the same terms and conditions as an Option, and any additional limitations,
               terms or conditions set forth in this Section 7 or the Award Agreement. 



               



          	B. 	  	
               Exercise Terms. The exercise price per share of Stock of a Stock Appreciation
               Right shall be an amount determined by the Committee. A Stock Appreciation Right
               granted independent of an Option shall entitle the Participant upon exercise to
               a payment from the Company in an amount equal to the excess of the Fair Market
               Value on the exercise date of a share of Stock over the exercise price per
               share, times the number of Stock Appreciation Rights exercised. A Stock
               Appreciation Right granted in connection with an Option shall entitle the
               Participant to surrender an unexercised Option (or portion thereof) and to
               receive in exchange an amount equal to the excess of the Fair Market Value on
               the exercise date of a share of Stock over the exercise price per share for the
               Option, times the number of shares covered by the Option (or portion thereof)
               which is surrendered. Payment may be made, in the discretion of the Committee,
               in 



               






8











          		  	
(i) Stock, (ii) cash or (iii) any combination of Stock and cash. Cash shall
               be paid for fractional shares of Stock upon the exercise of a Stock Appreciation
               Right. 



               



          	C. 	  	
               Limitations. The Committee may impose such conditions upon the exercisability or
               transferability of Stock Appreciation Rights as it determines in its sole
               discretion. To the extent Stock Appreciation Rights are subject to restrictions,
               Stock Appreciation Rights shall vest in whole shares only, and the holder of a
               Stock Appreciation Right shall not be deemed vested in any fractional share
               regardless of anything to the contrary in any Award Agreement. 



               



          	8. 	
               Other Stock-Based Awards and Cash-Based Awards. 



               



        The
Committee may, in its sole discretion, grant Awards of Stock, restricted Stock and other
Awards that are valued in whole or in part by reference to the Fair Market Value of Stock.
These Awards shall collectively be referred to herein as Other Stock-Based Awards. The
Committee may also, in its sole discretion, grant Cash-Based Awards, which shall have a
value as may be determined by the Committee. Other Stock-Based Awards shall be in such
form, and dependent on such conditions, as the Committee shall determine, including, but
not limited to, the right to receive one or more shares of Stock (or the cash-equivalent
thereof) upon the completion of a specified period of service, the occurrence of an event
or the attainment of performance objectives. Other Stock-Based Awards and Cash-Based
Awards may be granted with or in addition to other Awards. Subject to the other terms of
the Plan, Other Stock-Based Awards and Cash-Based Awards may be granted to such
Participants in such amounts and upon such terms, restrictions and conditions, and at any
time and from time to time, as shall be determined by the Committee and set forth in an
Award Agreement. To the extent Other Stock-Based Awards are subject to restrictions, Other
Stock-Based Awards shall vest in whole shares only, and the holder of an Other Stock-Based
Award shall not be deemed vested in any fractional share regardless of anything to the
contrary in any Award Agreement. 



          	9. 	
               Performance-Based Awards. 



               




        To
the extent applicable, the Committee may, in its sole and absolute discretion, determine
that certain Awards, including Other Stock-Based Awards and/or Cash-Based Awards, should
be subject to such requirements so that they are deductible by the Employer under Code
Section 162(m), or any successor thereto. If the Committee so determines, such Awards
shall be considered Performance-Based Awards subject to the terms of this Section 9, as
provided in the Award Agreement. A Performance-Based Award shall be granted by the
Committee in a manner to satisfy the requirements of Code Section 162(m) and the
regulations thereunder. The performance measures to be used for purposes of a
Performance-Based Award shall be chosen by the Committee, in its sole and absolute
discretion, from among the following: earnings per share of Stock; book value per share of
Stock; net income (before or after taxes); operating income; return on invested capital,
assets or equity; cash flow return on investments which equals net cash flows divided by
owners’ equity; earnings before interest or taxes; gross revenues or revenue growth;
market share; expense management; improvements in capital structure; profit margins; Stock
price; total stockholder return; free cash flow; or working capital. The performance
measures may relate to the Company, a Parent, a Subsidiary, an Employer or one or more
units of such an entity. 






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        The
Committee shall determine whether, with respect to a performance period, the applicable
performance goals have been met with respect to an Award and, if they have, to so certify
and ascertain the amount of the applicable Performance-Based Award. The Committee shall
have the discretion to adjust Performance-Based Awards downward. 



        For
calendar years beginning after the “reliance period” defined in Treas. Reg.
Section 1.162-27(f)(2) or any successor thereto with respect to the Company, an Award
shall be a Performance-Based Award only if the Committee described in Section 5 consists
solely of two or more Outside Directors within the meaning of Treas. Reg. Section
1.162-27(e)(3) or any successor thereto. 




          	10. 	
               Nontransferability of Awards. 



               




        Unless
otherwise determined by the Committee and expressly set forth in an Award Agreement, an
Award granted under the Plan and all rights thereunder shall, by its terms, be
non-transferable, nonassignable and not subject to encumbrance in any manner otherwise
than by will or the laws or descent and distribution and an Award may be exercised, if
applicable, during the lifetime of the Participant thereof, only by the Participant or his
or her guardian or legal representative. Notwithstanding the above, the Committee may not
provide in an Award Agreement that an Incentive Stock Option is transferable. Any
attempted assignment, transfer, mortgage, pledge or encumbrance except as herein
authorized, shall be void and of no effect. 




          	11. 	
               Investment Purpose. 



               




        If
deemed advisable by the Committee, each Award under the Plan shall be awarded only on the
condition that all purchases of Stock thereunder shall be for investment purposes, and not
with a view to resale or distribution, except that the Committee may make such provision
with respect to Awards granted under this Plan as it deems necessary or advisable for the
release of such condition upon the registration with the Securities and Exchange
Commission of Stock subject to the Award, or upon the happening of any other contingency
warranting the release of such condition. 



        If
deemed advisable by the Committee, the certificates evidencing the shares acquired by the
Participant pursuant to this Plan may bear a restrictive legend, if appropriate,
indicating that the shares have not been registered under said Act and are subject to
restrictions on the transfer thereof, which legend may be in the following form (or such
other form as the Company shall determine to be proper), to-wit: 



	  	
“The
shares represented by this certificate have not been registered under the Securities Act
of 1933, but have been issued or transferred to the registered owner pursuant to the
exemption afforded by Section 4(2) of said Act. No transfer or assignment of these shares
by the registered owner shall be valid or effective, and the issuer of these shares shall
not be required to give any effect to any transfer or attempted transfer of these shares,
including without limitation, a transfer by operation of law, unless (a) the issuer shall
have received an opinion of its counsel that the shares









10













	  	
 may be transferred without
requirement of registration under said Act, or (b) there shall have been delivered to the
issuer a ‘no-action’ letter from the staff of the Securities and Exchange
Commission, or (c) the shares are registered under said Act.” 






        In
addition to the restrictions described above, the Participant may not sell, pledge,
transfer, donate, assign or otherwise dispose of (collectively, “transfer”),
whether voluntarily or by operation of law, any shares of Stock acquired pursuant to the
Plan except as provided in this Section 11. 



          	A. 	  	
               Right of First Refusal. 



               



          	(1) 	  	
               If the Participant intends to transfer any shares of Stock pursuant to a bona
               fide purchase offer of an offeror who has agreed to be bound by transfer and
               buy/sell restrictions identical to those to which the Participant is subject
               (“Offeror”), the Participant shall deliver to the Company a written
               notice (“Notice”) of such intention to transfer such shares, setting
               forth in reasonable detail: (i) the proposed price, (ii) the number of shares
               proposed to be transferred, (iii) the other terms and conditions of the proposed
               transfer of such shares, (iv) an offer to sell the shares to the Company as
               provided herein and (v) the identity of the Offeror. The shares proposed to be
               transferred are hereinafter referred to as the “Offered Shares.” 



               



          	(2) 	  	
               The Company may elect to purchase all (but not less than all) of the Offered
               Shares at any time during the thirty (30) day period following its receipt of
               the Notice. The Company shall be entitled to purchase the Offered Shares from
               the Participant at the same price and on the same terms and conditions as those
               pursuant to which the Participant proposes to transfer the Offered Shares, as
               described in the Notice. If the Company fails to respond to such offer within
               the 30-day period, it shall be deemed to have rejected the offer. 



               



          	(3) 	  	
               Unless the Participant and the Company otherwise agree, the closing of the
               purchase of the Offered Shares shall take place at the principal offices of the
               Company at 10:00 a.m. on the tenth day (or if such day is not a business day on
               the next business day) after the expiration of the 30-day period. At the
               closing, the Participant shall tender the Offered Shares, together with
               appropriate instruments of transfer endorsed to the Company, and the Company
               shall tender a certified check, cashier’s check or a wire transfer of
               immediately available funds in the amount of the purchase price therefore. 



               



          	(4) 	  	
               If the Offered Shares are not purchased by the Company pursuant to this Section
               11, the Participant shall be entitled to sell all of the Offered Shares to the
               Offeror at the price and on the terms and conditions specified in the Notice,
               provided that such sale is consummated within one-hundred twenty (120) days from
               the date the Notice is delivered to the Company. For any sale of shares after
               such one-hundred 



               







11











          		  	
twenty (120) day period, the Participant shall give a new
               notice which shall reinstate the rights of the Company set forth in this Section
               11 to purchase the Offered Shares. 



               



          	B. 	  	
               Take-Along Rights. If an offeror desires to purchase all of the outstanding
               shares of Stock and if the owners of at least 50% of the outstanding shares
               desire to make such sale, the Participant agrees to sell all of his or her
               shares to such offeror on the terms and conditions approved by the owners of at
               least 50% of the outstanding shares. 



               



          	C. 	  	
               Effect of Prohibited Transfer. If any transfer of shares is made or attempted by
               a Participant other than in accordance with the terms of this Plan and the Award
               Agreement, the Company may refuse for any purpose to recognize any transferee
               who receives shares and any such transferee shall have no right to claim or
               retain any dividends on such shares which were paid or become payable subsequent
               to the date on which the prohibited transfer was made or attempted. In addition
               to any other legal or equitable rights that it may have, the Company may enforce
               its rights by specific performance to the extent permitted by law. 



               



          	D. 	  	
               Buy-Back Rights. If the Participant terminates employment for any reason, the
               Participant must, upon request by the Committee, sell his or her shares of Stock
               to the Company at a price equal to the Fair Market Value, as defined in the
               Plan, of such shares of Stock on the date of such sale. The Company shall
               exercise the buy-back right with respect to a Participant no later than twelve
               (12) months after the date the Participant terminates employment. 



               



          	E. 	  	
               Exceptions to Transfer Restrictions. Notwithstanding anything to the contrary in
               this Plan and Award Agreement, the restrictions upon transfer set forth in this
               Section 11 shall not apply to a transfer of shares of Stock by a Participant to
               any of (i) the Participant’s heirs, executors, administrators or other
               personal representative upon death of the Participant or (ii) the
               Participant’s spouse, children or grandchildren, or a trust for their or
               the Participant’s benefit; provided that, the restrictions on transfer in
               this Section 11 shall continue to apply to the shares received by any such
               permitted transferee, including without limitation that such permitted
               transferee shall not again transfer such shares except in accordance with this
               Section 11. 



               



          	F. 	  	
               Termination of Transfer Restrictions. The restrictions described in Sections
               11(A) through 11(E) shall apply except as provided otherwise in the Award
               Agreement and shall terminate on the earlier of a Public Offering of shares of
               Stock or mutual agreement of the parties to an Award Agreement. 



               



          	12. 	
               Adjustments Upon Changes in Capitalization or Corporation Acquisitions. 



               



        Notwithstanding
any other provisions of the Plan, unless otherwise provided in the Award Agreement, the
number and class of shares subject to each outstanding Award and the 





12













exercise prices, if
applicable, shall be adjusted, to the same pro rata number of shares and price as in the
original Award Agreement, in the event of changes in the outstanding Stock by reason of
stock dividends, stock splits, reverse stock splits, recapitalization, mergers,
consolidations, statutory share exchange, sale of all or substantially all assets,
split-ups, combinations or exchanges of shares and the like, and, in the event of any such
change in the outstanding Stock, the aggregate number and class of shares available under
the Plan and the maximum number of shares as to which Awards may be granted to an
individual shall be appropriately adjusted by the Committee, whose determination shall be
conclusive. In the event the Company, a Parent or a Subsidiary enters into a transaction
described in Section 424(a) of the Code with any other corporation, the Committee shall,
unless otherwise provided in the Award Agreement, grant options to employees or former
employees of such corporation in substitution of options previously granted to them upon
such terms and conditions as shall be necessary to qualify such grant as a substitution
described in Section 424(a) of the Code. 



        In
the event of a Change in Control, notwithstanding any other provisions of the Plan or
Award Agreement to the contrary, the Committee may, in its sole discretion, provide for: 



               	(1) 	  	
                    Accelerated vesting of any outstanding Awards that are otherwise unexercisable
                    or unvested as of a date selected by the Committee; 



                    



               	(2) 	  	
                    Termination of an Award upon the consummation of the Change in Control in
                    exchange for the payment of a cash amount determined at the discretion of the
                    Committee but intended to provide the Participant with the difference between
                    the Stock subject to the vested portion of the Award and the exercise price;
                    and/or 



                    



               	(3) 	  	
                    Issuance of substitute Awards to substantially preserve the terms of any Awards
                    previously granted under the Plan, which may be with respect to securities of a
                    successor issuer. 



                    



               	13. 	
                    Amendment and Termination. 



                    



        The
Board may at any time terminate the Plan, or make such amendments or modifications to the
Plan as it shall deem advisable; provided, however, that if and solely if such approval is
required by applicable law, then to the extent such approval is so required, such
amendment or modification shall be made subject to approval by the holders of Stock. No
termination or amendment of the Plan may, without the consent of the Participant to whom
any Award shall theretofore have been granted, adversely affect the rights of such
Participant under such Award. 



               	14. 	
                    Effectiveness of the Plan. 



                    




        The
Plan became effective upon adoption by the Board, subject, however, to its further
approval by the stockholders of the Company given within twelve (12) months of the date
the Plan is adopted by the Board at a regular meeting of the stockholders or at a special
meeting duly called and held for such purpose. Grants of Awards may be made prior to such
stockholder approval but all Award grants made prior to stockholder approval shall be
subject to the obtaining of such approval and if such approval is not obtained, such
Awards shall not be







13











effective for any purpose. This amendment and restatement shall become
effective upon adoption by the Board. 




               	15. 	
                    Time of Granting of an Award. 



                    




        An
Award grant under the Plan shall be deemed to be made on the date on which the Committee,
by formal action of its members duly recorded in the records thereof, makes an Award to a
Participant (but in no event prior to the adoption of the Plan by the Board); provided
that, such Award is evidenced by a written Award Agreement duly executed on behalf of the
Company and on behalf of the Participant, if applicable, within a reasonable time after
the date of the Committee action. Notwithstanding the foregoing, an Award granted under
the Plan by Maxine Clark or Barry Erdos shall be deemed to be made on the date on which
such grant is communicated to the Committee. 



               	16. 	
                    Term of Plan. 



                    



        This
Plan shall terminate ten (10) years after the date on which it was first approved and
adopted by the Board, without regard to the time of adoption of this amendment and
restatement, and no Award shall be granted hereunder after the expiration of such ten-year
period. Awards outstanding at the termination of the Plan shall continue in accordance
with their terms and shall not be affected by such termination. 




               	17. 	
                    Severability. 



                    





        Any
word, phrase, clause, sentence or other provision herein which violates or is prohibited
by any applicable law, court decree or public policy shall be modified as necessary to
avoid the violation or prohibition and so as to make this Plan and any Award Agreement
enforceable as fully as possible under applicable law, and if such cannot be so modified,
the same shall be ineffective to the extent of such violation or prohibition without
invalidating or affecting the remaining provisions herein. 



               	18. 	
                    Non-Waiver of Rights. 



                    





        The
Company’s failure to enforce at any time any of the provisions of this Plan or any
Award Agreement or to require at any time performance by the Participant 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 Plan, any Award Agreement, or any part hereof, or the
right of the Company thereafter to enforce each and every provision in accordance with the
terms of this Plan and any Award Agreement. 



               	19. 	
                    Assignment. 



                    




        Any
Award Agreement shall be freely assignable by the Company and shall inure to the benefit
of, and be binding upon, the Company, its successors and assigns and/or any other entity
which shall succeed to the business presently being conducted by the Company. 






14











               	20. 	
                    No Right To Continued Employment or Other Status. 



                    





        Nothing
in the Plan or in any Award granted pursuant to the Plan shall be considered or construed
as creating a contract of employment or any other relationship for any specified period of
time or shall confer on any individual any right to continue in the employ of the Employer
or continue any other relationship with the Company. The Employer and the Company
expressly reserve the right at any time to dismiss or otherwise terminate its
relationship, whether employment or otherwise, with a Participant free from any liability
or claim under the Plan, except as expressly provided in the applicable Award Agreement. 




               	21. 	
                    Choice of Laws. 



                    




        The
Plan shall be governed by and construed in accordance with the laws of the State of
Delaware without regard to conflicts of law. 



        The
foregoing Plan, as amended and restated, was approved and adopted by the Board on
July 27, 2005. 



	 	BUILD-A-BEAR WORKSHOP, INC. 






	 	By: 	  /s/ Tina Klocke
 

















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