Document:

exv10w4w1

 

EXHIBIT 10.4.1

FIRST AMENDMENT TO EMPLOYMENT, CONFIDENTIALITY AND

NONCOMPETE AGREEMENT

     This First Amendment (the “Amendment”) to the Employment, Confidentiality and Non-compete
Agreement dated the 1st day of May, 2004 (the “Agreement”) is made effective as of February 24,
2006, between BUILD-A-BEAR WORKSHOP, INC. (“Company”) and MAXINE CLARK (“Employee” or “Ms. Clark”).

Recital

     Company and Employee previously entered into the Agreement whereby Company hired Employee to
provide various services to Company under the title of Chief Executive Officer Bear. Company and
Employee now mutually desire to amend the Agreement pursuant to the terms of this Amendment.

     NOW, THEREFORE, in consideration of the premises and agreements hereinafter set forth, and
other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:

	1.	 	Section 3(b) of the Agreement is hereby amended as follows:

(b) Bonus. Should Company exceed its sales, profits and other objectives for any fiscal
year, Employee shall be eligible to receive a bonus for such fiscal year as determined by
the Compensation Committee of the Board of Directors; provided however such potential bonus
opportunity for Employee in any fiscal year shall be set by the Compensation Committee such
that, if Company exceeds its objectives, Company will pay Employee an amount not less than
125% of Employee’s base compensation. Such bonus opportunity will be sufficiently large
that if Employee achieves such bonus, she will be Company’s highest paid employee. Any
bonus payable to Employee will be payable in cash, stock or stock options or combination
thereof, all as determined by the Board of Directors of any duly authorized committee
thereof, and unless a different payout schedule is applicable for all executive employees
of Company, any such bonus payment will be payable in a single, lump sum payment. In the
event of termination of this Agreement because of Employee’s death or disability (as
defined by Section 4.1(b)), termination by Company without Cause pursuant to Section 4.1(d)
or pursuant to Employee’s right to terminate this Agreement for Good Reason under Section
4.1(e), the bonus criteria shall not change and any bonus shall be pro-rated based on the
number of full calendar weeks during the applicable fiscal year during which Employee was
employed hereunder.

Such bonus, if any, shall be payable after Company’s accountants have determined the sales
and profits and have issued their audit report with respect
thereto for the applicable fiscal year, which determination shall be binding on the
parties. Any such bonus shall be paid within seventy-five (75) days after the end

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EXHIBIT 10.4.1

of each
calendar year or thirty (30) days after the issuance of the auditor’s report, whichever is
later, regardless of Employee’s employment status at the time payment is due. If timely
payment is not made, Company shall indemnify Employee against any additional tax liability
that Employee may incur proximately as a result of the payment being made late.

Notwithstanding anything to the contrary herein, in no event shall Employee actually
receive a bonus in any fiscal year of less than an amount, when paid, as would render her
the most highly compensated executive at the Company by at least one dollar ($1.00) in
terms of cash compensation (base salary plus the cash component of her bonus). For
avoidance of doubt, Employee shall be the highest paid executive within Company during each
fiscal year of her employment, beginning with Fiscal Year 2005.

	2.	 	Section 3(f) of the Agreement is hereby amended as follows:

(f) Other. Employee shall be eligible for a car allowance and such other perquisites
as may from time to time be awarded to Employee by Company payable at such times and in
such amounts as Company, in its sole discretion, may determine. All such compensation
shall be subject to customary withholding taxes and other employment taxes as required with
respect thereto. Employee shall also qualify for all rights and benefits for which
Employee may be eligible under any benefit plans including group life, medical, health,
dental and/or disability insurance or other benefits (“Welfare Benefits”) which are
provided for employees generally at her then current location of employment. Employee may,
in her sole discretion, decline any perquisite (including without limitation the car
allowance), proposed annual salary increase, or bonus payment.

	3.	 	Section 4.1(b) of the Agreement is hereby amended as follows:

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

	4.	 	Section 4.1(c) is hereby amended to add the following at the end:

Company shall not invoke this Section 4.1(c) to avoid the effects of Section 4.1(a) or (b).

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EXHIBIT 10.4.1

	5.	 	Section 4.1 of the Agreement is hereby amended to add the following at the end:

In the event of termination for Cause, Employee will be afforded an opportunity prior to
the actual date of termination to discuss the matter with Company’s Board of Directors.

	6.	 	Section 4.2(a) of the Agreement is hereby amended as follows:

(a) Survival of Covenants. Upon termination of this Agreement, all rights and obligations
of the parties hereunder shall cease, except termination of employment pursuant to Section
4 or otherwise shall not terminate or otherwise affect the rights and obligations of the
parties pursuant to Section 3(b), Section 3(c) (subject to the terms of the Plan and
applicable Option Agreements), and 4.2 through 13 hereof.

	7.	 	Section 4.2(b) of the Agreement is hereby amended as follows:

(b) Severance. In the event during the Employment Period (i) Company terminates Employee’s
employment without Cause pursuant to Section 4.1(d) or (ii) Employee terminates her
employment for Good Reason pursuant to Section 4.1(e), Company shall continue her base
salary for a period of twenty-four (24) months following termination, such payments to be
reduced by the amount of any cash compensation from a subsequent employer during such
period. Company shall also continue Employee’s Welfare Benefits for such twenty-four (24)
month period as if Employee were an active full-time employee during such period, to the
extent permitted by Company’s Welfare Benefit Plans. If Employee cannot be treated as an
active full-time employee during all or part of such twenty-four (24) months pursuant to
the terms of Company’s Welfare Benefit Plans, Company shall pay towards the premium for any
continuation or conversion insurance coverage available to Employee an amount equal to the
amount it was paying for Employee’s coverage under Company’s Welfare Benefit Plans as of
Employee’s termination date. Employee shall accept these payments in full discharge of all
obligations of any kind which Company has to her except obligations, if any, (i) for
post-employment benefits expressly provided under this Agreement and/or at law, (ii) to
repurchase any capital stock of Company owned by Employee; or (iii) for indemnification
under separate agreement by virtue of Employee’s status as a director/officer of Company.
Employee shall also be eligible to receive a bonus with respect to the year of termination
as provided in Section 3(b).

	8.	 	Section 4.2(c) of the Agreement is hereby amended as follows:

(c) Damages. In the event that during the Initial Term Company terminates Employee’s
employment without Cause (other than for death or disability) in violation of the terms of
this Agreement, Employee shall be entitled to damages in an amount not less than the sum of
(i) the amount of base salary Employee would have been paid during the remainder of the
Initial Term pursuant to Section 3(a),

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EXHIBIT 10.4.1

and (ii) an amount equal to the bonus Employee would
have earned pursuant to Section 3(b) during the Initial Term (but in no event less than the
average bonus paid to Employee during the 2 fiscal years immediately preceding such
termination). This Section 4.2(c) is not intended to be a limit on the amount of damages
Employee may recover or otherwise limit or reduce any remedies available to Employee in the
event Company terminates Employee during the Initial Term in violation of the provisions of
this Agreement.

	9.	 	Section 6(a) of the Agreement is hereby amended as follows:

(a) for twenty-four (24) months, engage in, assist or have an interest in, or enter the
employment of or act as an agent, advisor or consultant for, any person or entity which is
engaged in the development, manufacture, supplying or sale of a product, process, service
or development:

(i) which is competitive with a product, process, service or development on which
the Company has expended resources, on which the Employee worked and which, at the
time of Employee’s termination, Company is selling or producing or has not
abandoned plans to sell or produce; or

(ii) with respect to which Employee has or had access to Confidential Information
while at Company provided Company has not abandoned, as of the date of Employee’s
termination, plans to use such Confidential Information.

(in either case (i) or (ii) a “Restricted Activity”), and which person or entity is located
within the United States or within any country where Company has established a retail
presence either directly or through a franchise arrangement; or

	10.	 	The last two (2) sentences of Section 6 of the Agreement are hereby amended as follows:

provided, however, that following termination of her employment, Employee shall be entitled
to be an employee of or otherwise associated with an entity that engages in Restricted
Activity so long as, for twenty-four (24) months following termination of said employment:
(i) the sale of stuffed plush toys is not a material
business of the entity; (ii) Employee has no direct or personal involvement in the sale of stuffed
plush toys; and (iii) neither Employee, her relatives, nor any other entities with which she
is affiliated own more than 1% of the entity. As used in this Section 6, “material business”
shall mean that either (A) greater than 10% of annual revenues received by such entity were
derived from the sale of stuffed plush toys and related products, or (B) the annual revenues
received or projected to be received by such entity from the sale of stuffed plush toys and
related products exceeded $10 million, or (C) the entity otherwise annually derives or is
projected to derive annual revenues in excess of $5 million from a retail concept that is
similar in any material regard to Company.

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EXHIBIT 10.4.1

	11.	 	Section 8(b) of the Agreement is hereby amended as follows:

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

	12.	 	Except to the extent expressly provided herein, the Agreement remains in full force and
effect, in accordance with its terms.

IN WITNESS WHEREOF, the parties have executed this First Amendment effective as of the date
indicated above.

	 	 	 
	MAXINE CLARK

	 	BUILD-A-BEAR WORKSHOP, INC.
	 
	By: /s/ Maxine Clark

	 	By: /s/ Tina Klocke
	 

	 	 
	Maxine Clark

	 	Tina Klocke
	 

	 	Chief Financial Bear

5exv10w5w1

 

EXHIBIT 10.5.1

FIRST AMENDMENT TO EMPLOYMENT, CONFIDENTIALITY AND

NONCOMPETE AGREEMENT

     This First Amendment (the “Amendment”) to the Employment, Confidentiality and Non-compete
Agreement dated the 13th day of April, 2004 (the “Agreement”) is made effective as of
February 24, 2006, between BUILD-A-BEAR WORKSHOP, INC. (“Company”) and BARRY ERDOS (“Employee” or
“Mr. Erdos”).

Recital

     Company and Employee previously entered into the Agreement whereby Company hired Employee to
provide various services to Company under the title of President and Chief Operating Officer Bear.
Company and Employee now mutually desire to amend the Agreement pursuant to the terms of this
Amendment.

     NOW, THEREFORE, in consideration of the premises and agreements hereinafter set forth, and
other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:

	1.	 	Section 3(b) of the Agreement is hereby amended as follows:

Bonus. Should Company exceed its sales, profits, and other objectives for any fiscal
year, Employee shall be eligible to receive a bonus for such fiscal year in the amount
as determined by the Compensation Committee of the Board of Directors, provided however
the potential bonus opportunity for Employee in any given fiscal year will be set by
the Compensation Committee such that, if the Company exceeds its objectives, the
Company will pay Employee an amount no less than sixty percent (60%) of the Employee’s
base salary for such fiscal year. Any bonus payable to Employee will be payable in
cash, stock or stock options, or any combination thereof, and unless a different payout
schedule is applicable for all executive employees of the Company, any such bonus
payments will be payable in a single, lump sum payment. In the event of termination of
this Agreement because of Employee’s death or disability (as defined by Section
4.1(b)), termination by the Company without cause pursuant to Section 4.1(c), or
pursuant to Employee’s right to terminate this Agreement for Good Reason under Section
4.1(d), the bonus criteria shall not change and any bonus shall be pro-rated based on
the number of full calendar weeks during the applicable fiscal year which Employee was
employed hereunder.

Such bonus, if any, shall be payable after Company’s accountants have finally
determined the sales and profits and have issued their audit report with respect
thereto for the applicable fiscal year, which determination shall be binding on the
parties. Any such bonus shall be paid within seventy-five (75) days after the end of
each calendar year or thirty (30) days after the issuance of the
auditor’s report, whichever is later, regardless of Employee’s employment status at the
time payment is due. If timely payment is not made, the Company

 

 

EXHIBIT 10.5.1

shall indemnify the
Employee against any additional tax liability that the Employee may incur proximately
as a result of the payment being made after the seventy-five day period.

	2.	 	Section 3(g) of the Agreement is hereby amended as follows:

Other. Employee shall be eligible for such other perquisites as may from time to time
be awarded to Employee by Company payable at such times and in such amounts as Company,
in its sole discretion, may determine. All such compensation shall be subject to
customary withholding taxes and other employment taxes as required with respect
thereto. Employee shall also qualify for all rights and benefits for which Employee
may be eligible under any benefit plans including group life, medical, health, dental
and/or disability insurance or other benefits (“Welfare Benefits”) which are provided
for employees generally at his then current location of employment. Employee may, in
his sole discretion, decline any perquisite, proposed annual salary increase, or bonus
payment, provided such decision is communicated to the Company in writing.

	3.	 	Section 4.1(b) of the Agreement is hereby amended as follows:

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

	4.	 	Section 4.1(c) of the Agreement is hereby amended as follows:

(c) By the Company with or without Cause. For the purposes of this Agreement, “Cause”
shall mean: (i) Employee’s engagement in any conduct which, in Company’s reasonable
determination, constitutes gross misconduct, or is illegal, unethical or improper
provided such conduct brings detrimental notoriety or material harm to Company; (ii)
gross negligence or willful misconduct; (iii) conviction of fraud or theft; (v) a
material breach of a material provision of this Agreement by Employee, or (v) failure
of Employee to follow a written directive of the Chief Executive Bear or the Board of
Directors within thirty (30) days after receiving such notice, provided that such
directive is reasonable in scope or is otherwise within the Chief Executive Bear’s or
the Board’s reasonable business judgment, and is reasonably within Employee’s control;
provided Employee does not cure said conduct or breach

 

 

EXHIBIT 10.5.1

(to the extent curable) within
30 days after the Chief Executive Bear or the Board of Directors provides Employee with
written notice of said conduct or breach. In the event of termination for cause, the
Employee will afforded an opportunity prior to the actual date of termination to
discuss the matter with the Company.

	5.	 	Section 4.2(b) of the Agreement is hereby amended as follows:

(b) Severance. In the event (i) the Company terminates Employee’s employment during
the Employment Period without cause pursuant to Section 4.1 (c) or (ii) the Employee
terminates his employment for Good Reason pursuant to Section 4.1(d), the Company shall
continue his base salary for a period of twelve (12) months from termination (unless
such termination occurs within the first twelve (12) months following the date of this
Agreement, in which event such base salary shall be continued for twenty-four (24)
months), such payments to be reduced by the amount of any cash compensation from a
subsequent employer during such period. The Company shall also continue Employee’s
Welfare Benefits for such period to the extent permitted by the Company’s Welfare
Benefit Plans. Employee shall accept these payments in full discharge of all
obligations of any kind which Company has to him except obligations, if any, (i) for
post-employment benefits expressly provided under this Agreement and/or at law, (ii) to
repurchase any capital stock of Company owned by Employee; or (iii) for indemnification
under separate agreement by virtue of Employee’s status as a director/officer of the
Company. Employee shall also be eligible to receive a bonus with respect to the year
of termination as provided in Section 3(b).

	6.	 	A new Section 20 is hereby inserted into the Agreement as follows:

Board Seat. Employee is currently a Class III member of the Company’s Board of
Directors. Management of the Company will propose to the Nominating and Corporate
Governance Committee (or other successor committee) that Employee be nominated by the
Board of Directors for re-election to the Board, and Employee agrees to continue to
serve so long as Employee is re-elected by the shareholders, provided however should
Employee’s employment terminate at any time for any reason (or no reason), Employee
will voluntarily and promptly resign from the Board of Directors, unless the Company
requests that the Employee remain on the Board through the end of his current term, and
for any such terms that the shareholders may elect Employee following such termination.
Employee’s execution of this Amendment shall be deemed to serve as his written
resignation as a Director should his employment terminate
for any other reason, unless the Company has requested in writing that Employee
continue as a Director.

	7.	 	Except to the extent expressly provided herein, the Agreement remains in full force
and effect, in accordance with its terms.

 

 

EXHIBIT 10.5.1

IN WITNESS WHEREOF, the parties have executed this First Amendment effective as of the date
indicated above.

	 	 	 	 	 	 	 
	BARRY ERDOS	 	BUILD-A-BEAR WORKSHOP, INC.
	 
	 	 	 	 	 	 
	By:

	 	      /s/ Barry Erdos
	 	By:
	 	     /s/ Maxine Clark
	 	 	 	 	 	 	 
	 

	 	     Barry Erdos
	 	 	 	     Maxine Clark
	 

	 	 	 	 	 	     Chief Executive Bear

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