Document:

Exhibit 10.1

Rules of the Build-A-Bear Workshop, Inc. Share Option Scheme

Part A: Approved Part approved by the HMRC under Schedule 4 to the Income Tax (Earnings and Pensions) Act 2003 on [           ] under reference [             ]

	
            1.
 	
            Definitions
 

	
             
  	
            1.1
 	
            In this Scheme, the following words and expressions shall bear, unless the context otherwise requires, the meanings set forth below:
 

	
             
 	
            ‘Appropriate Limit’ the limit given by ITEPA 2003, Sch 4, para 6;
 

‘Appropriate Period’ the meaning given by ITEPA 2003, Sch 4, para 26;

‘Associated Company’ an associated company of the Company within the meaning the expression bears in ITEPA 2003, Sch 4, para 35;

‘the Board’ the board of directors of the Company, or a duly authorised committee thereof;

‘Close Company’ a close company as defined in Taxes Act, s 414(1) as varied by ITEPA 2003, Sch 4, para 9;

‘the Company’ Build-A-Bear Workshop, Inc., a Delaware corporation;

‘Control’ the meaning given by Taxes Act, s 840;

	
             
 	
            ‘Date of Grant’ the date on which the Board grants an Option;
 

	
             
 	
            ‘Eligible Employee’ any individual who:
 

	
             
  	
            (a)
 	
            is a director of a Participating Company on terms which require him to devote at least 25 hours a week (excluding meal breaks) to his duties, or an employee of a Participating Company;
 

	
             
  	
            (b)
 	
            has not at the Date of Grant, and has not had within the preceding 12 months, a Material Interest in a Close Company which is:
 

	
             
  	
            (i)
 	
            the Company; or
 

	
             
  	
            (ii)
 	
            a company which has Control of the Company or is a Member of a Consortium which owns the Company;
 

‘Employees’ Share Scheme’ the meaning given by Companies Act 1985, s 743;

‘Executive Share Option Scheme’ an employees’ share option scheme in which participation is solely at the discretion of the Board;

 

1

 

 

‘Exercise Price’ the amount payable in relation to the exercise of an Option, whether in whole or in part, being an amount equal to the relevant Option Price multiplied by the number of Shares in respect of which the Option is exercised;

‘Grant Period’ the period of 42 days commencing on the Trading Day following any of the following:

	
             
  	
            (a)
 	
            the day on which Part A is approved by the HMRC;
 

	
             
  	
            (b)
 	
            the day immediately following the day on which the Company makes an announcement of its results for the last preceding financial year, half-year or other period;
 

	
             
  	
            (c)
 	
            the day immediately following the Company compensation committee determines to grant options to a Participant;
 

	
             
  	
            (d)
 	
            any day on which the Board resolves that exceptional circumstances exist which justify the grant of Options;
 

	
             
 	
            ‘ITEPA 2003’
 	
            the Income Tax (Earnings and Pensions) Act 2003;
 

	
             
 	
            ‘Market Value' in relation to a Share on any day:
 

	
             
  	
            (a)
 	
            if and so long as the Shares are admitted to listing on the New York stock exchange its Market Value shall be the closing of the sales price for such stock on that exchange for the Trading Day applicable to the date of determination, as reported in the Wall Street Journal or such other source as the Board deems reliable; or
 

	
             
  	
            (b)
 	
            subject to (a), above, its market value, determined in accordance with Part VIII of the Taxation of Chargeable Gains Act 1992 and agreed in advance with Shares Valuation;
 

 ‘Material Interest’ the meaning given by ITEPA 2003, Sch 4, paras 9, 10;

‘Member of a Consortium’ the meaning given by ITEPA 2003, Sch 4, para 36;

‘New York Stock Exchange’ New York Stock Exchange Group, Inc.;

‘Option’ a right to acquire Shares under the Scheme which is either subsisting or (where the context so admits or requires) is proposed to be granted;

‘Option Price’ the price per Share, as determined by the Board, at which an Eligible Employee may acquire Shares upon the exercise of an Option being not less than:

 

2

 

 

	
             
  	
            (a)
 	
            the Market Value of a Share:
 

	
             
  	
            (i)
 	
            subject to (ii) and (iii) below, on the Trading Day (being a Trading Day within the Grant Period) immediately preceding the Date of Grant; or
 

	
             
  	
            (ii)
 	
            if the Board so determines, averaged over the three Trading Days (all being Trading Days within the Grant Period) immediately preceding the Date of Grant; or
 

	
             
  	
            (iii)
 	
            if the Board so determines, at such earlier time or times as the Board may determine (with the previous agreement in writing of Her Majesty's Revenue and Customs (HMRC)); and
 

	
             
  	
            (b)
 	
            if the Shares are to be subscribed, their nominal value, but subject to any adjustment pursuant to Rule 9;
 

‘Original Market Value’ in relation to any Share to be taken into account for the purposes of the limit in Rule 2.4 and Rule 2.5, its Market Value as determined for the purposes of the relevant grant of options;

‘Part A’ Part A of the Scheme;

‘Part B’ Part B of the Scheme;

‘Participant’ a director or employee, or former director or employee, to whom an Option has been granted or (where the context so admits or requires) the personal representatives of any such person;

	
             
 	
            ‘Participating Company’
 

	
             
  	
            (a)
 	
            the Company; and
 

	
             
  	
            (b)
 	
            any other company which is under the Control of the Company, is a Subsidiary of the Company and is for the time being designated by the Board as a Participating Company;
 

‘Retirement Age’ in relation to a Participant, any age at which he is either bound or entitled to retire;

‘the Scheme’ the Build-A-Bear Workshop, Inc. Share Option Scheme in its present form comprising Part A and Part B and as may be subject to shareholder approval or as from time to time amended in accordance with the provisions hereof;

‘Share’ a share in the capital of the Company which satisfies the conditions specified in ITEPA 2003, Sch 4, paras 15—20;

 ‘Subsidiary’ the meaning given by Companies Act 1985, ss 736 and 736A;

 

3

 

 

‘Taxes Act’ the Income and Corporation Taxes Act 1988;

‘Trading Day’ any day on which the New York Stock Exchange is open for the transaction of business;             

	
             
  	
            1.2
 	
            In the Scheme, unless the context requires otherwise:
 

	
             
  	
            (a)
 	
            the headings are inserted for convenience only and do not affect the interpretation of any Rule;
 

	
             
  	
            (b)
 	
            a reference to a Rule is a reference to a Rule of the Scheme;
 

	
             
  	
            (c)
 	
            a reference to a statute or statutory provision includes a reference:
 

	
             
  	
            (i)
 	
            to that statute or provision as from time to time consolidated, modified, re-enacted or replaced by any statute or statutory provision;
 

	
             
  	
            (ii)
 	
            to any repealed statute or statutory provision which it re-enacts (with or without modification); and
 

	
             
  	
            (iii)
 	
            to any subordinate legislation made under it;
 

	
             
  	
            (d)
 	
            words in the singular include the plural, and vice versa;
 

	
             
  	
            (e)
 	
            a reference to the masculine shall he treated as a reference to the feminine, and vice versa;
 

	
            2.
 	
            Grant of Options
 

	
             
  	
            2.1
 	
            An Option may only he granted to an Eligible Employee who is nominated at the discretion of the Board.
 

	
             
  	
            2.2
 	
            Options may only be granted during the Grant Period and shall he granted the day after the Option Price was determined.
 

	
             
  	
            2.3
 	
            An Option may he granted subject to such objective condition or conditions of exercise as the Board may determine provided that any such condition shall be set out in documentation which is approved in advance by HMRC.
 

	
             
  	
            2.4
 	
            Any Option granted to an Eligible Employee shall he limited to take effect so that immediately following such grant the aggregate of the Original Market Value of all the Shares over which he has been granted option rights and which are subsisting under:
 

	
             
  	
            (a)
 	
            Part A;
 

 

4

 

 

	
             
  	
            (b)
 	
            any other Executive Share Option Scheme adopted by the Company or an Associated Company, and approved under the Taxes Act (other than an approved savings-related share option scheme),
 

	
             
 	
            shall not exceed in amount the Appropriate Limit.
 

	
             
  	
            2.5
 	
            Any Option granted to an Eligible Employee shall be limited to take effect so that immediately following such grant the aggregate of the Original Market Value of all the Shares over which he has been granted option rights in the period of one year ending on the Date of Grant under:
 

	
             
  	
            (a)
 	
            the Scheme; and
 

	
             
  	
            (b)
 	
            any other Executive Share Option Scheme adopted by the Company or a Subsidiary of the Company,
 

shall not exceed an amount equal to two times his current annual rate of salary (excluding bonuses) PROVIDED THAT this limit may be exceeded where the Board consider exceptional circumstances apply.

	
             
  	
            2.6
 	
            In determining the limits in Rule 2.5 above, no account shall be taken of any Shares where the Option was released without being exercised within 30 days of its grant.
 

	
             
  	
            2.7
 	
            The Company shall issue to each Participant an option certificate in such form (not inconsistent with the provisions of the Scheme) as the Board may from time to time prescribe. Each such certificate shall specify the Date of Grant of the Option, whether the Option has been granted under Part A or Part B, the number and class of Shares over which the Option is granted, the Option Price and any performance target or other condition to which the Option is subject. The option certificate shall be sealed or executed in such other manner as to take effect in law as a deed.
 

	
             
  	
            2.8
 	
            Except as provided in the Scheme, every Option shall be personal to the Participant to whom it is granted and shall not be transferable.
 

	
             
  	
            2.9
 	
            No amount shall be paid in respect of the grant of an Option.
 

	
            3.
 	
            Number of Shares in respect of which Options may be granted
 

	
             
  	
            3.1
 	
            The number of Shares which may be allocated under the Scheme on any day shall not, when added to the aggregate number of Shares which have been allocated in the previous ten years under the Scheme and any other Executive Share Option Scheme adopted by the Company, exceed such number as represents 5% of the ordinary share capital of the Company in issue immediately prior to that day.
 

	
             
  	
            3.2
 	
            The number of Shares which may be allocated under the Scheme on any day shall not, when aggregated with the number of Shares which have been 
 

 

5

 

 

allocated in the previous ten years under the Scheme and any other Employees’ Share Scheme adopted by the Company, exceed 10% of the ordinary share capital of the Company in issue immediately prior to that day.

	
             
  	
            3.3
 	
            In determining the above limits, no account shall be taken of any Shares where the right to acquire the Shares was released, lapsed or otherwise became incapable of exercise.
 

	
             
  	
            3.4
 	
            References in this Rule to ‘allocation’ shall mean, in the case of any share option scheme, the placing of unissued Shares under option and, in relation to other types of Employees’ Share Scheme, shall mean the issue and allotment of Shares and references to ‘allocated’ shall be construed accordingly.
 

	
            4.
 	
            Rights of exercise and lapse of Options
 

	
             
  	
            4.1
  	
             

 
 

	
             
  	
            (a)
 	
            Save as provided in Rules 4.2, 4.3, 4.4 and Rule 5, an Option shall not be exercised earlier than the third anniversary of the Date of Grant;
 

	
             
  	
            (b)
 	
            Save as provided in Rules 4.2, 4.3 and Rule 5, an Option may only be exercised by a Participant whilst he is a director or employee of a Participating Company or an Associated Company,
 

	
             
  	
            (c)
 	
            An Option may not be exercised by a Participant if he has, or has had at any time within the 12 month period preceding the date of exercise, a Material Interest in the issued ordinary share capital of a Close Company which is the Company or a company which has Control of the Company or is a Member of a Consortium which owns the Company;
 

	
             
  	
            (d)
 	
            Save as provided in Rules 4.2, 4.3, 4.4 and Rule 5, an Option may only be exercised if any condition pursuant to Rule 2.3 has been fulfilled to the satisfaction of the Board and subsequent to the determination of the Company compensation committee normally meeting in the March of each year.
 

	
             
  	
            (e)
 	
            An Option exercised at any time within the first 12 months of its grant will only provide 25% of the shares potentially available under it.  Thereafter 50% of the shares potentially available under it may be provided in the second year after grant; 75% after three years and the full 100% of shares may be available in the fourth year after grant.
 

	
             
  	
            4.2
 	
            An Option may be exercised by the personal representatives of a deceased Participant within one year following the date of his death.
 

 

6

 

 

	
             
  	
            4.3
 	
            An Option may be exercised within one year following the date on which the Participant ceases to hold an office or employment with a Participating Company or an Associated Company if such cessation is as a result of:
 

	
             
  	
            (a)
 	
            injury or disability;
 

	
             
  	
            (b)
 	
            pregnancy;
 

	
             
  	
            (c)
 	
            redundancy within the meaning of the Employment Rights Act 1996;
 

	
             
  	
            (d)
 	
            retirement at Retirement Age provided the Option has been held for at least two years at the date of such retirement (or for such longer period as the Board may determine at the Date of Grant);
 

	
             
  	
            (e)
 	
            early retirement by agreement with his employer;
 

	
             
  	
            (f)
 	
            the company which employs him ceasing to be under the Control of the Company;
 

	
             
  	
            (g)
 	
            the company which employs him (not being under the Control of the Company) ceasing to be an Associated Company;
 

	
             
  	
            (h)
 	
            the transfer or sale of the undertaking or part-undertaking in which he is employed to a person who is neither under the Control of the Company nor an Associated Company;
 

	
             
  	
            (i)
 	
            any other reason at the discretion of the Board acting fairly and reasonably.
 

	
             
  	
            4.4
 	
            If a Participant, whilst continuing to hold an office or employment with a Participating Company or an Associated Company, is transferred to work in another country and, as a result of that transfer, the Participant will either:
 

	
             
  	
            (a)
 	
            become subject to income tax on his remuneration in the country to which he is transferred and the Board is satisfied that, as a result, he will suffer a tax disadvantage upon exercising an Option; or
 

	
             
  	
            (b)
 	
            become subject to restrictions on his ability to exercise an Option or to deal in the Shares issuable upon the exercise of that Option by reason of, or in consequence of, the securities laws or exchange control laws of the country to which he is transferred,
 

the Participant may exercise the Option in the period commencing three months before and ending three months after the transfer takes place.

	
             
  	
            4.5
 	
            Options shall lapse upon the occurrence of the earliest of the following events:
 

	
             
  	
            (a)
 	
            the 10th anniversary of the Date of Grant;
 

 

7

 

 

	
             
  	
            (b)
 	
            the expiry of any of the periods specified in Rules 4.2 and 4.3 (save that if, at the time any of the applicable periods under Rule 4.3 expire, time is running under the period in Rule 4.2, the Option shall not lapse by reason of this Rule 4.5(B) until the expiry of the period under Rule 4.2);
 

	
             
  	
            (c)
 	
            the expiry of any of the periods specified in Rules 5.3, 5.4 and 5.5, save where an Option is released in consideration of the grant of a New Option over New Shares in the Acquiring Company (during one of the periods specified in Rules 5.3 and 5.4) pursuant to Rule 5.6;
 

	
             
  	
            (d)
 	
            the Participant ceasing to hold an office or employment with a Participating Company or an Associated Company in any circumstances other than:
 

	
             
  	
            (i)
 	
            where the cessation of office or employment arises on any of the grounds specified in Rules 4.2 and 4.3; or
 

	
             
  	
            (ii)
 	
            where the cessation of office or employment arises on any ground whatsoever during any of the periods specified in Rule 5;
 

	
             
  	
            (e)
 	
            subject to Rule 5.5, the passing of an effective resolution, or the making of an order by the Court, for the winding-up of the Company;
 

	
             
  	
            (f)
 	
            the Participant being deprived (otherwise than on death) of the legal or beneficial ownership of the Option by operation of law, or doing or omitting to do anything which causes him to be so deprived or becomes bankrupt.
 

	
            5.
 	
            Takeover, reconstruction and amalgamation, and liquidation
 

	
             
  	
            5.1
 	
            If any person obtains Control of the Company as a result of making an offer to acquire Shares which is either unconditional or is made on a condition such that, if it is satisfied, the person making the offer will have Control of the Company, an Option may be exercised within six months of the time when the person making the offer has obtained Control of the Company and any condition subject to which the offer is made has been satisfied.
 

	
             
  	
            5.2
 	
            For the purposes of Rule 5. 1, a person shall be deemed to have obtained Control of the Company if he and others acting in concert with him have together obtained Control of it.
 

	
             
  	
            5.3
 	
            If any person becomes bound or entitled to acquire Shares under Companies Act 1985, ss 428—430F or Companies (Northern Ireland) Order 1986, articles 421—423, an Option may be exercised at any time when that person remains so bound or entitled.
 

 

8

 

 

	
             
  	
            5.4
 	
            If, under Companies Act 1985, s 425 or Companies (Northern Ireland) Order 1986, article 418, the court sanctions a compromise or arrangement proposed for the purposes of, or in connection with, a scheme for the reconstruction of the Company or its amalgamation with any other company or companies, an Option may he exercised within six months of the court sanctioning the compromise or arrangement.
 

	
             
  	
            5.5
 	
            If notice is duly given of a resolution for the voluntary winding-up of the Company, an Option may be exercised within two months from the date of the resolution.
 

	
             
  	
            5.6
 	
            If any company (‘the Acquiring Company’):
 

	
             
  	
            (a)
 	
            obtains Control of the Company as a result of making:
 

	
             
  	
            (i)
 	
            a general offer to acquire the whole of the issued ordinary share capital of the Company which is made on a condition such that if it is satisfied, the Acquiring Company will have Control of the Company; or
 

	
             
  	
            (ii)
 	
            a general offer to acquire all the shares in the Company which are of the same class as the Shares, which may he acquired by the exercise of Options,
 

in either case ignoring any Shares which are already owned by it or a member of the same group of companies; or

	
             
  	
            (b)
 	
            obtains Control of the Company in pursuance of a compromise or arrangement sanctioned by the court under Companies Act 1985, s 425 or Companies (Northern Ireland) Order 1986, article 418; or
 

	
             
  	
            (c)
 	
            becomes bound or entitled to acquire Shares under Companies Act 1985, s 428—430F or Companies (Northern Ireland) Order 1986, articles 421— 423;
 

any Participant may, at any time within the Appropriate Period, by agreement with the Acquiring Company, release any Option which has not lapsed (‘the Old Option’) in consideration of the grant to him of an Option (‘the New Option’) which (for the purposes of ITEPA 2003, Sch 4, paras 26 and 27 is equivalent to the Old Option but relates to shares in a different company (whether the Acquiring Company itself or some other company falling within ITEPA 2003, Sch 4, para 16.

	
             
  	
            5.7
 	
            The New Option shall not be regarded for the purposes of Rule 5.6 as equivalent to the Old Option unless the conditions set out in ITEPA 2003, Sch 4, para 26 are satisfied, but so that the provisions of the Scheme shall for this purpose be construed as if:
 

 

9

 

 

	
             
  	
            (a)
 	
            the New Option were an option granted under the Scheme at the same time as the Old Option;
 

	
             
  	
            (b)
 	
            except for the purposes of the definitions of ‘Participating Company’ and ‘Subsidiary’ in Rule 1, the reference to Build-A-Bear Workshop, Inc. in the definition of ‘the Company’ in Rule 1 were a reference to the different company mentioned in Rule 5.6;
 

	
             
  	
            (c)
 	
            Rule 11.2 was omitted.
 

	
            6.
 	
            Manner of exercise
 

	
             
  	
            6.1
 	
            An Option may be exercised, in whole or in part, by the delivery to the Secretary of the Company, or its duly appointed agent, of a notice of exercise, in such form as the Board may prescribe, duly completed and signed by the Participant (or by his duly authorised agent) together with a remittance for the Exercise Price payable and/or an application for bridging finance to exercise the Option duly completed and signed, in such form as the Board may prescribe and subject to prior approval by HMRC, in respect of the Shares over which the Option is to be exercised.  If any conditions must be fulfilled before an Option may be exercised, the delivery of the option certificate shall not be treated as effecting the exercise of an Option unless and until the Board is satisfied that the conditions have been fulfilled. All such Shares
shall be allotted or transferred (as the case may be) into the name of the Participant, or, as he may direct, pursuant to any bridging finance arrangement, provided that the beneficial ownership of the Shares remains with the Participant until any sale of the Shares takes effect
 

	
            7.
 	
            Issue or transfer of Shares
 

	
             
  	
            7.1
 	
            Shares to be issued pursuant to the exercise of an Option shall be allotted within 28 days following the effective date of exercise of the Option.
 

	
             
  	
            7.2
 	
            The Board shall procure the transfer of any Shares to be transferred pursuant to the exercise of an Option within 28 days following the effective date of exercise of the Option.
 

	
             
  	
            7.3
 	
            Shares to be issued pursuant to the Scheme will rank pari passu in all respects with the Shares then in issue, except that they will not rank for any rights attaching to Shares by reference to a record date preceding the date of exercise.
 

	
             
  	
            7.4
 	
            Shares to he transferred pursuant to the Scheme will be transferred free of all liens, charges and encumbrances and together with all rights attaching thereto, except they will not rank for any rights attaching to Shares by reference to a record date preceding the date of exercise.
 

	
             
  	
            7.5
 	
            If and so long as the Shares are admitted to listing by the UK Listing Authority and traded on the New York Stock Exchange, the Company shall 
 

 

10

 

 

apply for a listing for any Shares issued pursuant to the Scheme as soon as practicable after the allotment thereof.

	
            8.
 	
            Tax Liability
 

	
             
  	
            8.1
 	
            If, on the exercise of an Option (whether in whole or in part), the Company or the Participant’s employer or former employer becomes liable on behalf of the Participant to make payment to the appropriate authorities on account of any amount of tax and primary National Insurance contributions (the ‘Tax Liability’), then unless:
 

	
             
  	
            (a)
 	
            the Participant has agreed that he will make a payment to the Company or his employer or former employer of an amount equal to the Tax Liability;
 

	
             
  	
            (b)
 	
            the Participant makes such payment within seven days of being notified by the Company of the amount of the Tax Liability; and
 

	
             
  	
            (c)
 	
            the Participant authorises the Company to make any further adjustments through payroll to ensure that the correct amount is reimbursed to the Company or the Participant’s employer or former employer in respect of the Tax Liability arising as a result of the exercise of the Option,
 

the Company shall only he obliged to deliver (or procure the delivery of’) such proportion of the Shares in respect of which that Option is exercised as shall he determined as follows:

 

where:

‘A’ is the aggregate Relevant Value of the Shares in respect of which that Option is exercised, and

	
             
 	
            ‘B’ is the amount of the Tax Liability arising as a result of the exercise.
 

	
             
  	
            8.2
  	
             

 
 

	
             
  	
            (a)
 	
            The Participant authorises the Company to arrange for a trustee or nominee on behalf of the Participant to sell the proportion of the Shares which the Company is not obliged to deliver to the Participant (‘the Retained Shares’) on the date on which those Shares would otherwise be delivered to the Participant and for that nominee or trustee to remit the proceeds of the sale of the Retained Shares to the Company within 14 days, in order to reimburse it for the PAYE liability as a result of the exercise of the Option.
 

 

11

 

 

	
             
  	
            (b)
 	
            The Participant authorises the Company to make any further adjustments through payroll to ensure that the correct amount is reimbursed to the employing company in respect of the PAYE liability arising as a result of the exercise of the Option.
 

	
             
  	
            (c)
 	
            all fractions of a Share shall be ignored
 

	
             
  	
            8.3
 	
            In this Rule 8, ‘Relevant Value’ shall mean ‘the market value of a Share determined in accordance with Part VIII of the Taxation of Chargeable Gains Act 1992’.
 

	
             
  	
            8.4
 	
            In this Rule 8, references to PAYE liability shall include any other tax deduction or national insurance contribution including similar overseas deductions or contributions made by the Company or any Associated or Participating Company.
 

	
            9.
 	
            Adjustments
 

	
             
  	
            9.1
 	
            The number of Shares over which an Option is granted and the Option Price thereof shall be adjusted in such manner as the Board shall determine following any capitalisation issue (other than a scrip dividend), rights issue, subdivision, consolidation, reduction or any other variation of share capital of the Company to the intent that (as nearly as may be without involving fractions of a Share or an Option Price calculated to more than two places of decimals) the Exercise Price payable in respect of an Option shall remain unchanged, provided that no adjustment made pursuant to this Rule 9.1 shall be made without the prior approval of the HMRC (so long as Part A is approved by the HMRC).
 

	
             
  	
            9.2
 	
            Subject to Rule 9.3, an adjustment may be made under Rule 9.1 which would have the effect of reducing the Option Price of unissued Shares to less than the nominal value of a Share, but only if, and to the extent that, the Board shall be authorised to capitalise from the reserves of the Company a sum equal to the amount by which the nominal value of the Shares in respect of which the Option is exercisable exceeds the adjusted Exercise Price, and so that an exercise of any Option in respect of which the Option Price has been reduced, the Board shall capitalise and apply such sum (if any) as is necessary to pay up the amount by which the aggregate nominal value of the Shares in respect of which the Option is exercised exceeds the Exercise Price for such Shares.
 

	
             
  	
            9.3
 	
            Where an Option subsists over both issued and unissued Shares, an adjustment permitted by Rule 9.2 may only be made if the reduction of the Option Price of both issued and unissued Shares can be made to the same extent.
 

	
             
  	
            9.4
 	
            The Board may take such steps as it may consider necessary to notify Participants of any adjustment made under this Rule 9 and to call in, cancel, 
 

 

12

 

 

endorse, issue or reissue any option certificate subsequent upon such adjustment.

	
            10.
 	
            Administration
 

	
             
  	
            10.1
 	
            Any notice or other communication under, or in connection with, the Scheme may be given by personal delivery or by sending the same by post, in the case of a company to its registered office, and in the case of an individual to his last known address, or, where he is a director or employee of the Company or an Associated Company, either to his last known address or to the address of the place of business at which he performs the whole (or substantially the whole) of the duties of his office or employment, and where a notice or other communication is given by first-class post, it shall be deemed to have been received 48 hours after it was put into the post properly addressed and stamped.
 

	
             
  	
            10.2
 	
            The Company may distribute to Participants copies of any notice or document normally sent by the Company to the holders of Shares.
 

	
             
  	
            10.3
 	
            If any option certificate shall be worn out, defaced or lost, it may be replaced on such evidence being provided as the Board may require.
 

	
             
  	
            10.4
 	
            The Company shall at all times keep available for allotment unissued Shares at least sufficient to satisfy all Options under which Shares may be subscribed or procure that sufficient Shares are available for transfer to satisfy all Options under which Shares may be acquired.
 

	
             
  	
            10.5
 	
            The decision of the Board in any dispute relating to an Option, or the due exercise thereof or any other matter in respect of the Scheme, shall be final and conclusive.
 

	
             
  	
            10.6
 	
            The costs of introducing and administering the Scheme shall he borne by the Company.
 

	
            11.
 	
            Alterations
 

	
             
  	
            11.1
 	
            Subject to Rule 11.2, the Board may at any time alter or add to all or any of the provisions of the Scheme in any respect, provided that, if an alteration or addition is made to Part A at a time when Part A is approved by HMRC under ITEPA 2003, Sch 4, it shall not have effect until it has been approved by HMRC.
 

	
             
  	
            11.2
 	
            Subject to Rule 11.3, no alteration or addition to the advantage of present or future Participants or employees shall be made under Rule 11.1 to such of the provisions relating to:
 

	
             
  	
            (a)
 	
            eligibility;
 

 

13

 

 

	
             
  	
            (b)
 	
            limitations on the number or amount of the securities, cash or other benefits subject to the Scheme;
 

	
             
  	
            (c)
 	
            the maximum entitlement for any one Participant and the determination of the price at which Shares may be acquired by the exercise of Options;
 

	
             
  	
            (d)
 	
            the basis for determining a Participant’s entitlement to, and the terms of, his participation in the Scheme and for the adjustment thereof (if any) in the event of a capitalisation issue, rights issue or open offer, sub-division or consolidation of shares or reduction of capital or any other variation of capital.
 

	
             
  	
            11.3
 	
            Rule 11.2 shall not apply to any alteration or addition which:
 

	
             
  	
            (a)
 	
            is necessary or desirable in order to obtain or maintain HMRC approval of Part A under ITEPA 2003, Sch 4 (or any other enactment) to make minor amendments to benefit the administration of the Scheme, to comply with or take account of the provisions of any proposed or existing legislation, law or other regulatory requirements, or to obtain or maintain favourable taxation, exchange control or regulatory treatment of the Company, any Subsidiary or any Participant; and
 

	
             
  	
            (b)
 	
            does not affect the basic principles of the Scheme, the definition of ‘Option Price’, the limits on individual participation or the limits in Rule 3.
 

	
             
  	
            11.4
 	
            No alteration or addition shall be made under Rule 11.1 which would abrogate or adversely affect the subsisting rights of a Participant, unless it is made:
 

	
             
  	
            (a)
 	
            with the consent in writing of such number of Participants as hold Options under the Scheme to acquire 75% of the Shares which would be issued or transferred if all Options granted and subsisting under the Scheme were exercised; or
 

	
             
  	
            (b)
 	
            by a resolution at a meeting of Participants passed by not less than 75% of the Participants who attend and vote either in person or by proxy,
 

and, for the purpose of this Rule 11.4, the Participants shall be treated as the holders of a separate class of share capital and the provisions of the articles of association of the Company relating to class meetings shall apply mutatis mutandis.

	
             
  	
            11.5
 	
            Notwithstanding any other provision of the Scheme other than Rule 11.1, the Board may, in respect of Options granted to Eligible Employees who are or who may become subject to taxation outside the United Kingdom on their 
 

 

14

 

 

remuneration, amend or add to the provisions of the Scheme and the terms of Options as it considers necessary or desirable to take account of or to mitigate or to comply with relevant overseas taxation, securities or exchange control laws, provided that the terms of Options granted to such Eligible Employees are not overall more favourable than the terms of Options granted to other Eligible Employees.

	
             
  	
            11.6
 	
            As soon as reasonably practicable after making any alteration or addition under Rule 11, the Board shall give written notice thereof to any Participant affected thereby.
 

	
            12.
 	
            General
 

	
             
  	
            12.1
 	
            The Scheme shall terminate upon the tenth anniversary of its adoption by the Company in general meeting or at any earlier time by the passing of a resolution by the Board or an ordinary resolution of the Company in general meeting Termination of the Scheme shall be without prejudice to the subsisting rights of Participants.
 

	
             
  	
            12.2
 	
            The Company, and any Subsidiary of the Company, may provide money to the trustees of any trust or any other person to enable them or him to acquire Shares to be held for the purposes of the Scheme, or enter into any guarantee or indemnity for those purposes, to the extent permitted by Companies Act 1985, s 153, provided that any trust deed to be made for this purpose shall, at a time when Part A is approved by the HMRC under ITEPA 2003, Sch 4, have previously been submitted to the HMRC
 

	
             
  	
            12.3
 	
            The rights and obligations of any individual under the terms of his office or employment with the Company or a Participating Company or a Subsidiary of the Company or an Associated Company shall not be affected by his participation in the Scheme or any right which he may have to participate therein, and an individual who participates therein shall waive all and any rights to compensation or damages in consequence of the termination of his office or employment with any such company for any occasion whatsoever, insofar as those rights arise or may arise from his ceasing to have rights under or be entitled to exercise any Option under, the Scheme as a result of such termination, or from the loss or diminution in value of such rights or entitlements.
 

	
             
  	
            12.4
 	
            These Rules shall be governed by, and construed in accordance with, English law.
 

PART B: Unapproved Part

	
            1.
 	
            Definitions
 

	
             
  	
            1.1
 	
            In this Part B, the words and expressions used in Part A shall bear, unless the context otherwise requires, the same meaning herein, save to the extent these Rules shall provide to the contrary.
 

 

15

 

 

	
            2.
 	
            Application of Part A
 

	
             
  	
            2.1
 	
            Save as modified by the Rules set out below, all the provisions in the Rules of Part A shall be incorporated into this Part B as if fully set out herein and so as to be part of Part B and (for the avoidance of doubt) Shares allocated under this Part B shall be taken into account for the purposes of Rule 3 of Part A.
 

	
            3.
 	
            Individual limit
 

	
             
  	
            3.1
 	
            Rule 2.4 of Part A shall not apply in this Part B.
 

	
            4.
 	
            Revenue approval
 

	
             
  	
            4.1
 	
            Any requirement in Part A to obtain HMRC approval shall not apply in this Part B.
 

	
            5.
 	
            Acceptance of Tax Liability
 

	
             
  	
            5.1
 	
            An Option granted under Part B, at the discretion of the Board, may lapse within 28 days of the Date of Grant if the Participant does not agree to the terms of Rule 8 of Part A of the Option.
 

	
            6.
 	
            Material Interest
 

	
             
  	
            6.1
 	
            Paragraph (B) in the definition of ‘Eligible Employee’ in Part A shall not apply in this Part B.
 

	
            7.
 	
            Rules of Part B
 

The Rules of this Part B are set out in the attached document titled 'Build-A-Bear Workshop, Inc. 2004 Stock Incentive Plan'.  For the avoidance of doubt it is not intended that any of the Rules of this Part B shall apply to this Part A or that the provisions of Rule 22 of Part B should extend beyond the capacity to adhere such sub-plans as the Committee so wishes and may be approved by HMRC.

 

 

16EX-10.4 EMPLOYMENT AGREEMENT - LAWRENCE ODELL

 

Exhibit
10.4

EMPLOYMENT AGREEMENT

     AGREEMENT entered into and effective as of February 15, 2006 by and between FIRST BANCORP
PUERTO RICO (the “Company”) and Lawrence Odell (or “L. Odell”).

     WHEREAS, the Company wishes to retain the services of L. Odell and the retention of L. Odell’s
services for and on behalf of the Company and FirstBank Puerto Rico (the “Bank”) is of material
importance to the preservation and enhancement of the value of the Company’s and the Bank’s
business;

     WHEREAS, this Employment Agreement is being executed together with a certain Services
Agreement with the law firm of Martínez Odell & Calabria at which L. Odell is a senior partner, and
pursuant to which said law firm is to be compensated for the services to be rendered by L. Odell
hereunder;

     WHEREAS, the Board of Directors of the Company has approved and authorized the execution of
this Agreement with L. Odell to take effect as of the date above written.

     WHEREAS, the Compensation Committee of the Board of Directors of the Company has approved the
granting to L. Odell of an amount of options to purchase stock of the Company (the “Initial Stock
Option Grant”), as provided in Section 6 herein, as partial consideration for entering into this
Agreement, which will become effective upon execution of this Agreement.

     WHEREAS, the parties desire to enter into this Agreement setting forth the terms and
conditions of the employment relationship of the Company, the Bank and L. Odell;

     NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements
herein, the parties agree as follows:

     1. Employment. The Company agrees to employ L. Odell and L. Odell agrees to the employment by
the Company for the period stated in Section 4 hereof and subject the other terms and conditions
herein provided.

     2. Position and Responsibilities. The Company hereby employs L. Odell as Executive Vice
President and General Counsel, L. Odell shall carry out and render to the Company and to the Bank
such services as are customarily performed by persons holding a similar position. L. Odell shall
also perform such other related duties as he may from time to time be reasonably directed in
writing to perform,

1

 

including, but not limited to performing duties for the Company, the Bank and other subsidiaries of
the Company. L. Odell shall report to the President and Chief Executive Officer of the Company.
In the absence of the President and Chief Executive Officer of the Company, L. Odell shall report
to the Board of Directors, through such Director as may be designated by the Board of Directors.
Notwithstanding the foregoing, the Board of Directors of the Bank may delegate or assign specific
tasks to L. Odell, provided that the assignment clearly sets for the priority of the task, and
whether it takes precedence over other duties and obligations of L. Odell.

     3. Duties. During the period of employment hereunder, and except for illness, vacation
periods, and leaves of absence, the Executive shall devote his business time, attention, skill, and
efforts to the faithful performance of his duties as provided herein as is customary for an
executive holding a similar position in a financial institution of comparable size. The Company
acknowledges that L. Odell shall remain a partner at the law firm of Martinez, Odell & Calabria
(the “Law Firm”) during the term of his employment with the Company. In this connection, the
Company acknowledges that, from time to time, during the term of his employment with the Company,
L. Odell may continue to render legal services to a select and limited group of clients of the Law
Firm, provided that no such client has a direct adversity with the Company and L. Odell
periodically advises the Company of the identities of such clients. Additionally, the Company
acknowledges that L. Odell, during the term of his employment with the Company, will be
participating in administrative meetings at the Law Firm. L. Odell hereby represents that any
such endeavors with or on behalf of the Law Firm shall be of a limited nature and shall not
interfere, nor constitute a conflict of interest with the duties of L. Odell required under this
Agreement. In addition, L. Odell hereby represents that he is not subject to any agreement that
would interfere with his performance of the duties contemplated by this Agreement.

          The parties to this Agreement acknowledge that the Law Firm has been retained by the Board of
Directors to serve as corporate and bank regulatory counsel to the Company and to FirstBank Puerto
Rico. Accordingly, the Company further acknowledges that as General Counsel, L. Odell may need to
consider referring legal matters to the Law Firm in accordance with its retention for those matters
by the Company.

2

 

          L. Odell agrees that, during the term of his employment hereunder, except with the express
consent of the Board of Directors, he will not, directly or indirectly, engage or participate,
become director of, or render advisory or other services for, or in connection with, or become
interested in, or make any financial investment in any firm, corporation, business entity or
business enterprise that directly competes with the Company or its subsidiaries in Puerto Rico;
provided, however, that L. Odell shall not thereby be precluded or prohibited from owning passive
investments, including investments in the securities of other financial institutions so long as
such ownership does not require him to devote substantial time to the management or control of the
business or activities of any such firm, corporation, business entity or enterprise.

          L. Odell shall provide the Company’s President and Chief Executive Officer with monthly
reports of any and all matters referred to the Martínez Odell & Calabria law firm.

     4. Term. The initial term of employment under this Agreement shall be for a period of four
(4) years, commencing on the date hereof and terminating on February 14, 2010. On each anniversary
of the date of commencement of this Agreement, the term of the employment hereunder shall
automatically be extended for an additional one (1) year period beyond the then effective
expiration date, unless either party receives written notice, not less than 90 days prior to the
anniversary date, advising the other party that this Agreement shall not be further extended. Any
such written notice shall not affect any prior extensions of the term of employment hereunder.

     5. Standards. L. Odell shall perform his duties and responsibilities under this Agreement in
accordance with such reasonable standards as established, from time to time, by the Board of
Directors and/or management of the Company and conveyed in writing to L. Odell as well as all
policies and procedures of the Company and its subsidiaries. The reasonableness of such standards
shall be measured against standards for executive performance generally prevailing in the financial
industry (in Puerto Rico).

          Notwithstanding anything to the contrary, nothing in this Agreement will be interpreted in any
manner which would tend to limit or interfere with the authority or oversight duties and discretion
of the Board of Directors to establish adequate guidelines for the effective management of the
Company.

3

 

     6. Initial Stock Option Grant. In consideration for entering into this Employment Agreement,
the Company hereby grants L. Odell options to purchase up to 100,000 shares of common stock of the
Company (the “Initial Stock Options”) with a strike price of $12.64 and under the terms and
conditions of the 1997 Stock Option Plan (a copy of which forms a part of this Agreement).

     7. Compensation and Reimbursement of Expenses.

          a) Compensation

               The Company agrees to pay L. Odell during the term of this Agreement a base salary of not less
than $100.00 a year. The base salary provided herein shall be paid in one installment and upon
each of the anniversary date of this Agreement.

          b) Performance Bonus

               In addition to the base salary set forth above, the performance of L. Odell during each year
of employment shall be evaluated on the basis of his achievement of the predetermined business
objectives contained in the Company’s annual business plan in connection with the areas of endeavor
assigned to L. Odell. The contribution of L. Odell to the achievement of the Company’s annual
business objectives and his performance in such other functions as may be reasonably assigned under
his charge, will be evaluated by the President and Chief Executive Officer who will recommend to
the Compensation Committee payment of a performance bonus in an amount which the Compensation
Committee, and ultimately the Board of Directors, may determine at their discretion.

          c) Stock Options

               L. Odell shall be entitled to participate in and receive the benefits of any stock
option, profit sharing, or other plans, benefits and privileges granted to employees and executives
of the Company or its subsidiaries and affiliates which now exist or may come into existence
hereafter, to the extent commensurate with his then assigned duties and responsibilities, as
recommended by the Compensation Committee and approved by the Board of Directors. The terms and
conditions of such stock options will be within the parameters set forth in the employee stock
option plan of the Company and/or its subsidiaries or other similar plan under which a benefit or
privilege is made available to L. Odell. Notwithstanding the above, the Company agrees that the
Initial Stock Option Grant is independent from,

4

 

and shall never be taken into consideration in the determination and approval of the participating
rights to be granted to L. Odell, with respect to all or any of the benefits referred to in this
subsection (c).

          d) Automobile Expenses

               (i) The Company shall provide L. Odell with a company owned automobile. Such automobile will
be furnished in accordance with the existing Company’s executive automobile policy as approved by
the Board of Directors. All expenses, including but not limited to insurance, maintenance,
repairs, fuel, and lubrication services, shall be provided by the Company.

               (ii) The Company agrees that on a monthly basis, but never more than thirty (30) days after
the expenses are incurred by L. Odell, it shall pay or reimburse L. Odell for any gasoline, oil and
maintenance or repair expenses incurred by him in the operation of the automobile provided
hereunder.

          e) Reimbursement of Expenses

               Not less frequently than monthly, the Company shall pay or reimburse L. Odell for all
reasonable travel and other expenses incurred by L. Odell in the performance of his duties under
this Agreement.

          f) Office

               The Company shall furnish L. Odell with a private office, a private secretary and such other
assistance and accommodations as shall be suitable to the character of L. Odell’s position with the
Company and adequate for the performance of his duties hereunder.

     8. Participation in Benefit Plans. The payment and benefits provided in this Agreement are
independent and separate of any payment and benefits to which L. Odell may be or may become
entitled to under any other present or future group employee benefit plan or insurance programs of
the Company for which executives of the Company and or its subsidiaries are or shall become
eligible, and L. Odell shall be eligible to receive all benefits and entitlements for which said
executives are eligible under every such plan or program.

     9. Voluntary Absences; Vacations and Sick Leave. L. Odell shall be entitled, without loss of
pay, to absent himself voluntarily for reasonable periods of time from the performance of his
duties and

5

 

responsibilities under this Agreement. All such voluntary absences shall count either as paid
vacation time or sick leave, unless otherwise provided by the Board of Directors. L. Odell shall be
entitled to an annual paid vacation of fifteen (15) working days per every twelve (12) month
period, or such longer periods as the Board of Directors may approve, which vacations shall be
scheduled by L. Odell with the prior approval of the President and Chief Executive Officer, taking
into account the needs of the Company. L. Odell may accumulate unused paid vacation time from
twelve (12) month period to the next; provided that such accumulation shall not exceed twenty (20)
working days of unused vacation time from prior twelve (12) month periods. L. Odell shall be
entitled to up to fifteen (15) non-cumulative working days of paid sick leave for each twelve (12)
month period or such longer non-cumulative working days as the Board of Directors may approve.
Upon termination of employment with or without cause, or for any reason, the Company shall pay L.
Odell all accrued and unused vacation days, at the highest rate of salary earned by the Executive,
during his tenure.

     10. Benefits Payable Upon Disability or Death. The Company shall, at all times, maintain in
effect disability and death benefits insurance for the benefit of L. Odell in an amount at least
equal to that maintained for executives of similar rank and which will not be less than that
maintained by the Company for all officers and employees. Provided that the Company may increase
but never decrease the benefits which L. Odell and/or the Executive’s heirs would be entitled to
thereunder.

     11. Termination of Employment.

          (a) Without cause. The Board of Directors may, without cause, terminate this
Agreement at any time, by giving ninety (90) days written notice to the Executive. In such event,
the Executive, if requested by the Board of Directors, shall continue to render his services, and
shall be paid his regular salary up to the date of termination. In addition, the Executive shall be
paid from the date of termination a severance payment of four (4) times $450,000 (less all amounts
required to be withheld and deducted) such payment to be made in substantially equal semimonthly
installments on the fifteenth and last days of each month, or if these days are nonbusiness days,
the immediately preceding business day, commencing with the month in which the date of termination
occurs and continuing for twelve (12) consecutive semimonthly payment dates.

6

 

          L. Odell may, without cause, terminate the Agreement by giving ninety (90) days written notice
to the Board of Directors. In such event, the Executive shall continue to render his services and
shall be paid his regular salary up to the date of termination, but shall not receive any severance
payment.

          (b) With
Cause. The Board of Directors may, at any time, terminate this Agreement for
cause. In such event, L. Odell shall not be entitled to receive any further compensation from the
date of notice of termination. The notice of termination shall be in writing, shall set forth the
date of delivery to L. Odell, and the effect of termination shall not be retroactive to a date
prior to delivery of such notice. For the purpose of this Agreement, “termination for cause” shall
include any act or omission on the part of L. Odell which involves personal dishonesty, willful
misconduct, material breach of fiduciary duty, a material violation of any law, rule or regulation
relating to the banking industry or a material breach of any provision of this Agreement, such as
the willful and continued failure of L. Odell to perform the duties herein set forth. No act or
failure to act on the Executive’s part shall be considered “willful” unless done, or omitted to be
done, other than in good faith and without reasonable belief that his action or omission was in the
best interest of the Company. For purposes of this paragraph, any act or omission to act on the
part of L. Odell in reliance upon an opinion of counsel, outside auditor or advisor to the Company
or to L. Odell shall not be deemed to be willful or without reasonable belief that the act or
omission to act was in the best interest of the Company.

          L. Odell may, with cause, terminate this Agreement. For purposes of this section, termination
with cause shall mean a failure of the Company to comply with any material provision of this
Agreement, which failure has not been cured within fifteen (15) days of receipt of a written notice
by L. Odell of such noncompliance by the Company.

          Either party may submit for arbitration, as provided in Section 23 of this Agreement, among
other matters, any controversy that may arise with regard to the cause for termination that is set
forth in the written notice of termination provided by the Board of Directors or the Executive, as
the case may be.

          (c) If L. Odell is suspended and/or prohibited from participating in the conduct of the
Company’s affairs by a notice or order served under Section 8(e)(3),(e)(4) or (g)(1) of the Federal
Deposit

7

 

Insurance Act [12 USC 1818(e)(3), (e)(4) and (g)(1)], or any other similar provision of state or
federal law now in place or enacted in the future, the Company’s obligations under this Agreement
shall be suspended as of the date of service, unless such prohibition and/or suspension is stayed
by appropriate proceedings. If after a hearing is held and upon judicial review, the notice or
order suspending and/or prohibiting L. Odell from participating in the affairs of the Company is
confirmed, then this Agreement shall be terminated with cause. If the charges in the notice or
order are dismissed, the Company shall: (i) pay L. Odell all the compensation withheld while the
contractual obligations were suspended and (ii) reinstate, in whole or in part, any of the
obligations which were suspended.

          (d) If the Company is in default, defined to mean an adjudication or other official
determination by a court of competent jurisdiction, the appropriate Federal banking agency or other
public authority pursuant to which a conservator, receiver or other legal custodian is appointed
for the Company or the Bank for the purpose of liquidation, all obligations under this Agreement
shall terminate as of the date of default, but the rights of the Executive to compensation earned
as of the date of termination shall not be affected.

          (e) In the event that L. Odell is terminated or he terminates this Agreement, in a manner
which violates the provisions of this Section 11, as determined by the arbitration procedure
provided in Section 22, L. Odell or the Company, as the case may be, shall be entitled to
reimbursement for all reasonable costs, including attorney’s fees, incurred by L. Odell or the
Company, as the case may be, in challenging such termination.

     12. Change
in Control.

          (a) If during the term of this Agreement there is “change in control” of the Company, as such
term is defined in Sub-section (c) hereunder, L. Odell shall be entitled to receive from the
Company a severance payment in consideration of having bound himself to employment by the Company
and having foregone other business or professional opportunities, actual or potential. The
severance payment shall be a lump sum cash payment equal to four (4) times $450,000, plus four (4)
times the highest cash Performance Bonus paid to L. Odell in any of the four (4) fiscal years
prior to the date of the change in control, and (ii) the value of any other benefits provided to L.
Odell during the year in which the

8

 

change in control occurs which are listed and attached hereto as Exhibit A, as it may be amended
from time to time. Payment of the amounts set forth in this Section 12(a) shall be on or before
the fifth day following the date on which the change of control occurs.

          (c) The term “change in control” shall be deemed to have taken place if: (i) a third person,
including a “group” as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, becomes
the beneficial owner of shares of the Company having 25% or more of the total number of votes which
may be cast for the election of directors of the Company or which, by cumulative voting, if
permitted by the Company’s charter or bylaws, would enable such third person to elect 50% or more
of the directors of the Company; or (ii) as the result of, or in connection with, any cash tender
or exchange offer, merger or any other business combination, sales of assets or contested election,
or any combination of the foregoing transactions, the person who were directors of the Company
before such transaction shall cease to constitute a majority of the Board of the Company or any
successor institution.

          (d) Any payments made to L. Odell pursuant to this Agreement are subject to and conditioned
upon their compliance with 12 USC 1828(k) and any regulations promulgated thereunder. The Company
through the Bank shall in good faith seek to obtain, if necessary or required, any consents or
approvals from the FDIC or any other applicable regulatory agency and any successors thereto with
respect to any payments to be made or any benefits to be provided to L. Odell pursuant to the terms
of this Agreement.

     13. Confidentiality;
Injunctive Relief. Recognizing that the knowledge and information
about, or relationships with, the business associates, customers, clients, and agents of the
Company and its affiliated companies and the business methods, systems, plans, and policies of the
Company and of its affiliated companies which L. Odell will receive, obtain, or establish as an
employee of the Company or otherwise are valuable and unique assets of the Company, L. Odell agrees
that, during the continuance of this Agreement and thereafter, he shall not (otherwise than
pursuant to his duties hereunder) disclose without the written consent of the Company, any material
or substantial, confidential, or proprietary know-how, data, or information pertaining to the
Company, or its business, personnel, or plans, to any person, firm, corporation, or other entity,
for any reason or purpose whatsoever. L. Odell acknowledges and

9

 

agrees that all memoranda, notes, records, and other documents made or compiled by L. Odell or made
available to L. Odell concerning the Company’s business shall be the Company’s exclusive property
and shall be delivered by L. Odell to the Company upon expiration or termination of this Agreement
or at any other time upon the request of the Company.

     The provision of this Section 13 shall survive the expiration or termination of this Agreement
or any part thereof, without regard to the reason therefor.

     L. Odell hereby acknowledges that the services to be rendered by him are of special, unique,
and extraordinary character and, in connection with such services, he will have access to
confidential information concerning the Company’s business. By reason of this, L. Odell consents
and agrees that if he violates any of the provisions of this Agreement with respect to
confidentiality, the Company would sustain irreparable harm and, therefore, in addition to any
other remedies which the Company may have under this Agreement or otherwise, the Company will be
entitled to an injunction to be issued by any court of competent jurisdiction restraining L. Odell
from committing or continuing any such violation of this Agreement. The term “Confidential
Information” means: (1) proprietary information of the Company; (2) information marked or
designated by the Company as confidential; (3) information, whether or not in written form and
whether or not designated as confidential, which is known to L. Odell as treated by the Company as
confidential; and (4) information provided to the Company by third parties which the Company is
obligated to keep confidential, specifically including customer lists and information. Confidential
information does not include any information now or hereafter voluntarily disseminated by the
Company to the public, or which otherwise becomes part of the public domain through lawful means.

     14. No Assignments. This Agreement is personal to each of the parties hereto. Neither party
may assign or delegate any of his or its rights or obligations hereunder without first obtaining
the written consent of the other party. However, in the event of the death of L. Odell all his
rights to receive payments hereunder shall become rights of his estate.

     15. Benefits. Any benefits due or provided hereunder to L. Odell shall be in addition to, and
not in substitution of, any benefit to which L. Odell is otherwise entitled to without regard to
the Agreement.

10

 

     16. Mitigation. L. Odell shall not be obligated to seek other employment in mitigation of the
amounts payable or arrangements made under any provision of this Agreement, and the obtaining of
any such other employment shall in no event effect any reduction of the Company’s obligation to
make the payments and arrangements required to be made under this Agreement.

     17. Notices. All notices required by this Agreement to be given by one party to the other
shall be in writing and shall be deemed to have been delivered either:

          (a) When personally delivered to the Office of the Secretary of the Company at his regular
corporate office, or L. Odell in person; or

          (b) Five days after depositing such notice in the United States mails, certified mail with
return receipt requested and postage prepaid at:

	 	 	 
	i.
	 	the Company:

	 	 	c/o Office of the Secretary of the Company

	 	 	FirstBank Corp Puerto Rico

	 	 	PO Box 9146

	 	 	Santurce, PR 00908-0146

	 
	 	 

	ii.
	 	L. Odell:

	 	 	c/o Martínez Odell & Calabria

	 	 	PO Box 190998

	 	 	San Juan, PR 00919-0998

or to such other address as either party may designate to the other by notice in writing in
accordance with the terms hereof.

     18. Amendments or Additions; Action by Board of Directors. No amendments or additions to this
Agreement shall be binding unless in writing and signed by both parties. The prior approval by a
two-thirds affirmative vote of the full Board of Directors of the Company shall be required in
order for the Company to authorize any amendments or additions to this Agreement, to give any
consent or waivers of provisions of this Agreement, or to take any other action under this
Agreement including any termination of the employment of L. Odell with or without cause under
Section 11 hereof.

     19. Sections Headings. The Section headings used in this agreement are included solely for
convenience and shall not affect, or be used in connection with, the interpretation of this
Agreement.

11

 

     20. Severability. The provisions of this Agreement shall be deemed severable and the
invalidity or unenforceability of any provision shall not affect the validity or enforceability of
the other provisions hereto.

     21. Governing Law. This Agreement shall be governed by the laws of the Commonwealth of Puerto
Rico. Venue for the litigation of any and all matters arising under or in connection with this
Agreement shall be in the Court of First Instance, San Juan Superior Part for the Commonwealth of
Puerto Rico, in the case of state court jurisdiction, or in the U.S. District Court for the
District of Puerto Rico, in the case of federal court jurisdiction.

     22. Arbitration. Any controversy as to the interpretation of this Agreement must be submitted
before three arbitrators to be appointed by the American Arbitration Association (“AAA”). The
rules and regulations of the AAA shall govern the procedures of said arbitration. The award of a
majority of arbitrators shall be binding and final on the parties.

     23. The Company agrees to reimburse L. Odell for all reasonable legal fees incurred by him in
connection with the negotiation, drafting and execution of this Agreement.

	 	 	 	 	 
	 	FIRST BANCORP PUERTO RICO

 	 
	 	By:  /s/ Luis Beauchamp
	 	  	 
	 	 	 	 
	 	 	 	 
	 

ATTEST :_________________________

	 	 	 	 	 
	 	 	 
	 	/s/ Lawrence Odell
	 	Executive  	 
	 	 	 
	 

12

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00116-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00116-of-00352.parquet"}]]