Document:

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                                                                    EXHIBIT 10.3

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

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

                                TABLE OF CONTENTS

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                                                                                                               PAGE
<S>     <C>                                                                                                   <C>
1.       Purpose of the Plan......................................................................................1

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

3.       Stock Subject to the Plan................................................................................4

4.       Administration...........................................................................................4

5.       Committee................................................................................................5
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<S>     <C>                                                                                                   <C>
6.       Options..................................................................................................5

         A.       Type of Option..................................................................................5
         B.       Option Prices...................................................................................5
         C.       Exercise - Elections and Restrictions...........................................................5
         D.       Option Terms....................................................................................6
         E.       Successive Option Grants........................................................................6
         F.       Additional Incentive Stock Option Requirements..................................................7
         G.       Deferral of Gain on a Non-qualified Stock Option................................................8

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

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

9.       Performance-Based Awards.................................................................................9

10.      Nontransferability of Awards.............................................................................9

11.      Investment Purpose.......................................................................................9
         A.       Right of First Refusal.........................................................................10
         B.       Take-Along Rights..............................................................................11
         C.       Effect of Prohibited Transfer..................................................................11
         D.       Buy-Back Rights................................................................................11
         E.       Exceptions to Transfer Restrictions............................................................12
         F.       Termination of Transfer Restrictions...........................................................12

12.      Adjustments Upon Changes in Capitalization or Corporation Acquisitions..................................12

13.      Amendment and Termination...............................................................................13

14.      Effectiveness of the Plan...............................................................................13

15.      Time of Granting of an Award............................................................................13

16.      Term of Plan............................................................................................13
</Table>

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<S>     <C>                                                                                                   <C>
17.      Severability............................................................................................13

18.      Non-Waiver of Rights....................................................................................14

19.      Assignment..............................................................................................14

20.      No Right To Continued Employment........................................................................14

21.      Choice of Law...........................................................................................14
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                           BUILD-A-BEAR WORKSHOP, INC.
                            2004 STOCK INCENTIVE PLAN

1.       Purpose of the Plan.

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

2.       Definitions.

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

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

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

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

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

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

         F.       "Change in Control" means (i) the purchase or other
                  acquisition (other than from the Company) by any person,
                  entity or group of persons, within the meaning of Section
                  13(d) or 14(d) of the Act (excluding, for this purpose, the
                  Company or its subsidiaries or any employee benefit plan of
                  the Company or its subsidiaries), of beneficial ownership
                  (within the meaning of Rule 13d-3 promulgated under the Act)
                  of 20% or more of either the then-outstanding shares of common
                  stock of the Company or the combined voting power of the
                  Company's then-outstanding voting securities entitled to vote
                  generally in the election of directors; or (ii) individuals
                  who, as of the date hereof, constitute the Board (and, as of
                  the date hereof, the "Incumbent Board") cease for any reason
                  to constitute at least a majority of the Board, provided that
                  any person who becomes a director subsequent to the date
                  hereof whose election, or nomination for election by the
                  Company's stockholders, was approved by a vote of at least a
                  majority of the

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                  directors then comprising the Incumbent Board (other than an
                  individual whose initial assumption of office is in connection
                  with an actual or threatened election contest relating to the
                  election of directors of the Company, as such terms are used
                  in Rule 14a-11 of Regulation 14A promulgated under the Act)
                  shall be, for purposes of this section, considered as though
                  such person were a member of the Incumbent Board; or (iii)
                  approval by the stockholders of the Company of a
                  reorganization, merger or consolidation, in each case with
                  respect to which persons who were the stockholders of the
                  Company immediately prior to such reorganization, merger or
                  consolidation do not, immediately thereafter, own more than
                  50% of, respectively, the common stock and the combined voting
                  power entitled to vote generally in the election of directors
                  of the reorganized, merged or consolidated corporation's
                  then-outstanding voting securities, or of a liquidation or
                  dissolution of the Company or of the sale of all or
                  substantially all of the assets of the Company.

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

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

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

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

         K.       "Fair Market Value" means (i) if there should be a public
                  market for the relevant Stock on the determination date, the
                  arithmetic mean between the high and lows of prices of such
                  Stock as reported on such date on the Composite Tape of the
                  principal national securities exchange or, if applicable, the
                  NASDAQ National Market on which such Stock is listed or
                  admitted to trading, or, if such Stock is not listed or
                  admitted on any national securities exchange or the NASDAQ
                  National Market, the arithmetic mean of the per share closing
                  bid price and per share closing asked price on such date as
                  quoted on the National Association of Securities Dealers
                  Automated Quotation System (or such market in which such
                  prices are regularly quoted) ("NASDAQ"), or if no sale of such
                  shares shall have been reported on the Composite Tape of any
                  national securities exchange or the NASDAQ National Market or
                  quoted on the NASDAQ on such date, then the immediately
                  preceding date on which sales of such shares have been so
                  reported or quoted shall be used, and (ii) if there should not
                  be a public market for the Stock on such date, the value
                  established by the Committee in good faith.

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

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

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

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

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

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

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

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

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

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

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

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

         X.       "Subsidiary" means any corporation or other legal entity
                  (other than the Company) in an unbroken chain of corporations
                  or other legal entities beginning with the Company if, at the
                  time of granting an Award, each of the corporations or other
                  legal entities other than the last corporation or other legal
                  entity in the unbroken chain owns stock possessing 50% or more
                  of the total combined voting power of all classes of stock or
                  other equity in one of the other corporations

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                  or other legal entities in such chain, or such other meaning
                  as may be hereafter ascribed to it in Code Section 424.

3.       Stock Subject to the Plan.

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

4.       Administration.

         The Plan shall be administered by the Committee. Subject to the express
provisions of the Plan, the Committee shall have plenary authority, in its
discretion, to determine the individuals to whom, and the time or times at
which, Awards shall be granted and the number of shares, if applicable, to be
subject to each Award. In making such determinations, the Committee may take
into account the nature of services rendered by the respective individuals,
their present and potential contributions to the Employer's success and such
other factors as the Committee, in its discretion, shall deem relevant. Subject
to the express provisions of the Plan, the Committee shall also have plenary
discretionary authority to interpret the Plan, to prescribe, amend and rescind
rules and regulations relating to it, to determine the terms and provisions of
the respective Award Agreements (which need not be identical), to waive or amend
any provision hereof in any manner not adversely affecting the rights granted to
the Participant by the express terms hereof and to make all other determinations
necessary or advisable for the administration of the Plan. The Committee's
determinations on the matters referred to in this Section 4 shall be conclusive.

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5.       Committee.

         The Committee shall be comprised of directors appointed by the Board,
which may from time to time appoint members of the Committee in substitution for
members previously appointed and may fill vacancies, however caused, in the
Committee. The Board shall select one of the Committee members as its Chairman,
and shall hold its meetings at such times and places as it may determine. A
majority of its members shall constitute a quorum. All determinations of the
Committee shall be made by a majority of its members present at any meeting at
which there is a quorum. Any decision or determination reduced to writing and
signed by all of the members shall be fully as effective as if it had been made
by a majority vote at a meeting duly called and held. The Committee may appoint
a secretary, shall keep minutes of its meetings and shall make such rules and
regulations for the conduct of its business as it shall deem advisable. The
Committee may, to the extent permitted by law, delegate its responsibilities and
authority hereunder to an officer of the Company.

6.       Options.

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

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

         B.       Option Prices. The purchase price of the Stock under each
                  Incentive Stock Option shall not be less than 100% of the Fair
                  Market Value of the Stock at the time of the granting of the
                  Option; provided that, in the case of a Participant who owns
                  more than 10% of the total combined voting power of all
                  classes of stock of the Company, a Parent or a Subsidiary, the
                  purchase price of the Stock under each Incentive Stock Option
                  shall not be less than 110% of the Fair Market Value of the
                  Stock on the date such Option is granted. The purchase price
                  of the Stock under each Non-qualified Stock Option shall be
                  determined from time to time by the Committee, which need not
                  be uniform for all Participants.

         C.       Exercise - Elections and Restrictions. The purchase price for
                  an Option is to be paid in full upon the exercise of the
                  Option, either (i) in cash, (ii) in the discretion of the
                  Committee, by the tender to the Company (either actual or by
                  attestation) of shares of Stock already owned by the
                  Participant for a period of at least six months as of the date
                  of tender and registered in his or her name, having a Fair
                  Market Value equal to the cash exercise price of the Option
                  being exercised, or (iii) in the discretion of the Committee,
                  by any combination of the payment methods specified in clauses
                  (i) and (ii) hereof; provided that, no shares of Statutory
                  Option Stock may be tendered in exercise of an Incentive Stock
                  Option

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                  unless (a) such shares have been held by the Participant for
                  at least one year and (b) at least two years have elapsed
                  since such Statutory Option Stock was granted; and provided
                  further that, unless otherwise specifically provided in an
                  Award Agreement, until such time as a Public Offering shall
                  occur, the only method of payment of the purchase price for an
                  Option shall be cash. The Committee may, after consideration
                  of any potential accounting consequences, cause the Company to
                  loan the option price to the Participant or to guaranty that
                  any shares to be issued will be delivered to a broker or
                  lender in order to allow the Participant to borrow the option
                  price. Unless otherwise provided in the Award Agreement, at
                  the request of a Participant, the Committee may, to the extent
                  permissible under applicable state law, in its sole
                  discretion, allow the Participant to defer payment in full of
                  the option price at the time the Participant provides written
                  notice of exercise provided that the notice of exercise
                  directs that the certificate or certificates for the shares of
                  Stock for which the Option is exercised be delivered to a
                  licensed broker acceptable to the Company as the agent for the
                  individual exercising the Option and, at the time such
                  certificate or certificates are delivered, the broker tenders
                  to the Company cash (or cash equivalents acceptable to the
                  Company) equal to the option price for the shares of Stock
                  purchased pursuant to the exercise of the Option plus the
                  amount (if any) of any withholding obligations on the part of
                  the Company. The proceeds of sale of Stock subject to the
                  Option are to be added to the general funds of the Company or
                  to the shares of the Stock held in its Treasury, and used for
                  its corporate purposes as the Board shall determine.

         D.       Option Terms. The term of each Option shall not be more than
                  ten (10) years from the date of granting thereof or such
                  shorter period as is prescribed in the Award Agreement;
                  provided that, in the case of a Participant who owns more than
                  ten percent (10%) of the total combined voting power of all
                  classes of stock of the Company, a Parent or a Subsidiary, the
                  term of any Incentive Stock Option shall not be more than five
                  (5) years from the date of granting thereof or such shorter
                  period as prescribed in the Award Agreement. Within such
                  limit, Options will be exercisable at such time or times, and
                  subject to such terms, restrictions and conditions, as the
                  Committee shall, in each instance, approve, which need not be
                  uniform for all Participants. The holder of an Option shall
                  have none of the rights of a stockholder with respect to the
                  shares subject to Option until such shares shall be issued to
                  him or her upon the exercise of his or her Option. Upon
                  exercise of an Option, the Committee shall withhold a
                  sufficient number of shares to satisfy the Company's minimum
                  required statutory withholding obligations for any taxes
                  incurred as a result of such exercise (based on the minimum
                  statutory withholding rates for federal and state tax
                  purposes, including payroll taxes); provided that, in lieu of
                  all or part of such withholding, the Participant may pay an
                  equivalent amount of cash to the Company.

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

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         F.       Additional Incentive Stock Option Requirements.

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

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

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

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

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

7.       Stock Appreciation Rights.

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

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

         C. Limitations. The Committee may impose such conditions upon the
exercisability or transferability of Stock Appreciation Rights as it determines
in its sole discretion.

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

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

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9.       Performance-Based Awards.

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

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

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

10.      Nontransferability of Awards.

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

11.      Investment Purpose.

         If deemed advisable by the Committee, each Award under the Plan shall
be awarded only on the condition that all purchases of Stock thereunder shall be
for investment purposes, and not with a view to resale or distribution, except
that the Committee may make such provision with

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<PAGE>

respect to Awards granted under this Plan as it deems necessary or advisable for
the release of such condition upon the registration with the Securities and
Exchange Commission of Stock subject to the Award, or upon the happening of any
other contingency warranting the release of such condition.

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

                  "The shares represented by this certificate have not been
                  registered under the Securities Act of 1933, but have been
                  issued or transferred to the registered owner pursuant to the
                  exemption afforded by Section 4(2) of said Act. No transfer or
                  assignment of these shares by the registered owner shall be
                  valid or effective, and the issuer of these shares shall not
                  be required to give any effect to any transfer or attempted
                  transfer of these shares, including without limitation, a
                  transfer by operation of law, unless (a) the issuer shall have
                  received an opinion of its counsel that the shares may be
                  transferred without requirement of registration under said
                  Act, or (b) there shall have been delivered to the issuer a
                  'no-action' letter from the staff of the Securities and
                  Exchange Commission, or (c) the shares are registered under
                  said Act."

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

         A.       Right of First Refusal.

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

                  (2)      The Company may elect to purchase all (but not less
                           than all) of the Offered Shares at any time during
                           the thirty (30) day period following its receipt of
                           the Notice. The Company shall be entitled to purchase
                           the

                                       10
<PAGE>

                           Offered Shares from the Participant at the same price
                           and on the same terms and conditions as those
                           pursuant to which the Participant proposes to
                           transfer the Offered Shares, as described in the
                           Notice. If the Company fails to respond to such offer
                           within the 30-day period, it shall be deemed to have
                           rejected the offer.

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

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

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

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

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

                                       11
<PAGE>

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

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

12.      Adjustments Upon Changes in Capitalization or Corporation Acquisitions.

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

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

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

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

                                       12
<PAGE>

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

13.      Amendment and Termination.

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

14.      Effectiveness of the Plan.

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

15.      Time of Granting of an Award.

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

16.      Term of Plan.

         This Plan shall terminate ten (10) years after the date on which it is
approved and adopted by the Board and no Award shall be granted hereunder after
the expiration of such ten-year period. Awards outstanding at the termination of
the Plan shall continue in accordance with their terms and shall not be affected
by such termination.

17.      Severability.

         Any word, phrase, clause, sentence or other provision herein which
violates or is prohibited by any applicable law, court decree or public policy
shall be modified as necessary to avoid the violation or prohibition and so as
to make this Plan and any Award Agreement enforceable as fully as possible under
applicable law, and if such cannot be so modified, the same

                                       13
<PAGE>

shall be ineffective to the extent of such violation or prohibition without
invalidating or affecting the remaining provisions herein.

18.      Non-Waiver of Rights.

         The Company's failure to enforce at any time any of the provisions of
this Plan or any Award Agreement or to require at any time performance by the
Participant of any of the provisions hereof shall in no way be construed to be a
waiver of such provisions or to affect either the validity of this Plan, any
Award Agreement, or any part hereof, or the right of the Company thereafter to
enforce each and every provision in accordance with the terms of this Plan and
any Award Agreement.

19.      Assignment.

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

20.      No Right To Continued Employment.

         Nothing in the Plan or in any Award granted pursuant to the Plan shall
be considered or construed as creating a contract of employment for any
specified period of time or shall confer on any individual any right to continue
in the employ of the Employer or interfere in any way with the right of the
Employer to terminate his or her employment at any time.

21.      Choice of Law.

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

         The foregoing Plan was approved and adopted by the Board on
______________, ________.

                                            BUILD-A-BEAR WORKSHOP, INC.

                                            By
                                              ---------------------------------

                                       14<PAGE>
                                                                  EXHIBIT 10.3.1

                                      MODEL
                        INCENTIVE STOCK OPTION AGREEMENT
                                    UNDER THE
              BUILD-A-BEAR WORKSHOP, INC. 2004 STOCK INCENTIVE PLAN

         THIS AGREEMENT, made this ____ day of __________, ______, by and
between Build-A-Bear Workshop, Inc., a Delaware corporation ("Company"), and
____________ ("Optionee"),

         WITNESSETH THAT:

         WHEREAS, the Board of Directors of the Company ("Board of Directors")
has adopted the Build-A-Bear Workshop, Inc. 2004 Stock Incentive Plan (the
"Plan") pursuant to which options covering an aggregate of 3,700,000 shares of
the Common Stock of the Company may be granted to employees, directors and
consultants of the Company, a parent or subsidiary, as such terms are defined in
the Plan; and

         WHEREAS, Optionee is now an employee of the Company, a parent or a
subsidiary; and

         WHEREAS, the Company desires to grant to Optionee the option to
purchase certain shares of its stock under the terms of the Plan, which option
is intended to qualify as an incentive stock option within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended ("Code")
(hereinafter referred to as an "Incentive Stock Option"); and

         NOW, THEREFORE, in consideration of the premises and of the mutual
agreements hereinafter set forth, it is covenanted and agreed as follows:

         1. Grant Subject to Plan. This option is granted under and is expressly
subject to all the terms and provisions of the Plan, and the terms of such Plan
are incorporated herein by reference. Optionee hereby acknowledges receipt of a
copy of the Plan and agrees to be bound by all the terms and provisions thereof.
Terms not defined herein shall have the meaning ascribed thereto in the Plan.
The Committee referred to in Section 4 of the Plan ("Committee") has been
appointed by the Board of Directors, and designated by it, as the Committee to
make grants of options.

         2. Grant and Terms of Option. Pursuant to action of the Committee,
which action was taken on ________, ____ ("Date of Grant"), the Company grants
to Optionee the option to purchase all or any part of ________ (______) shares
of the Common Stock of the Company, of the par value of $___ per share ("Common
Stock"), for a period of ten (10) years (five (5) years in the case of a 10%
shareholder, as described in Section 6(B) of the Plan) from the Date of Grant,
at the purchase price of $___ per share (110% in the case of a 10% shareholder,
as described in Section 6B of the Plan), which amount may not be less than 100%
of

<PAGE>

the Fair Market Value of the Stock at the time of the granting of the Option;
provided, however, that the right to exercise such option shall be, and is
hereby, restricted as follows:

                  (a) No shares may be purchased prior to ________,______; that
         at any time during the term of this option on or after _________,_____,
         Optionee may purchase up to 25% of the total number of shares to which
         this option relates; that at any time during the term of this option on
         or after ________,______, Optionee may purchase up to an additional 25%
         of the total number of shares to which this option relates; that at any
         time during the term of this option on or after _______,_____, Optionee
         may purchase up to an additional 25% of the total number of shares to
         which this option relates; and that at any time on or after ______,___,
         Optionee may purchase up to an additional 25% of the total number of
         shares to which this option relates; so that on or after _______,_____,
         during the term hereof, Optionee will have become entitled to purchase
         the entire number of shares to which this option relates.

                  (b) Notwithstanding the foregoing, in the event of a Change of
         Control or a Public Offering (both defined below) Optionee may purchase
         100% of the total number of shares to which this option relates.

                           (1) For purposes of this Agreement, a Change in
                  Control means:

                                    (A) The purchase or other acquisition (other
                           than from the Company) by any person, entity or group
                           of persons, within the meaning of Section 13(d) or
                           14(d) of the Securities Exchange Act of 1934, as
                           amended (the "Exchange Act") (excluding, for this
                           purpose, the Company or its subsidiaries or any
                           employee benefit plan of the Company or its
                           subsidiaries), of beneficial ownership (within the
                           meaning of Rule 13d-3 promulgated under the Exchange
                           Act) of 20% or more of either the then-outstanding
                           shares of common stock of the Company or the combined
                           voting power of the Company's then-outstanding voting
                           securities entitled to vote generally in the election
                           of directors; or

                                    (B) Individuals who, as of the date hereof,
                           constitute the Board of Directors of the Company (the
                           "Board" and, as of the date hereof, the "Incumbent
                           Board") cease for any reason to constitute at least a
                           majority of the Board, provided that any person who
                           becomes a director subsequent to the date hereof
                           whose election, or nomination for election by the
                           Company's shareholders, was approved by a vote of at
                           least a majority of the directors then comprising the
                           Incumbent Board (other than an individual whose
                           initial assumption of office is in connection with an
                           actual or threatened election contest relating to the
                           election of directors of the Company, as such terms
                           are used in Rule 14a-11 of Regulation 14A promulgated
                           under the Exchange Act) shall be, for purposes of
                           this section, considered as though such person were a
                           member of the Incumbent Board; or

                                        2
<PAGE>

                                    (C) Approval by the stockholders of the
                           Company of a reorganization, merger or consolidation,
                           in each case with respect to which persons who were
                           the stockholders of the Company immediately prior to
                           such reorganization, merger or consolidation do not,
                           immediately thereafter, own more than 50% of,
                           respectively, the common stock and the combined
                           voting power entitled to vote generally in the
                           election of directors of the reorganized, merged or
                           consolidated corporation's then-outstanding voting
                           securities, or of a liquidation or dissolution of the
                           Company or of the sale of all or substantially all of
                           the assets of the Company.

                           (2) For purposes of this Agreement, a Public Offering
                  means the creation of an active trading market in Common Stock
                  by the sale of Common Stock to the public pursuant to a
                  registration statement under the Securities Act of 1933.

                  (c) In no event may this option or any part thereof be
         exercised after the expiration of ten (10) years (five (5) years in the
         case of a 10% shareholder, as described in Section 6(B) of the Plan)
         from the Date of Grant.

                  (d) The purchase price of the shares subject to the option may
         be paid for (i) in cash, (ii) in the discretion of the Committee, by
         tender of shares of Common Stock already owned by Optionee, or (iii) in
         the discretion of the Committee, by a combination of methods of payment
         specified in clauses (i) and (ii), all in accordance with Section 6 of
         the Plan. Notwithstanding the preceding sentence, Optionee may request
         that the Committee agree that payment in full of the option price need
         not accompany the written notice of exercise; provided that, the notice
         of exercise directs that the certificate or certificates for the shares
         of Common Stock for which the option is exercised be delivered to a
         licensed broker acceptable to the Committee as the agent for Optionee
         and, at the time such certificate or certificates are delivered, the
         broker tenders to the Committee cash (or cash equivalents acceptable to
         the Committee) equal to the option price for the shares of Common Stock
         purchased pursuant to the exercise of the option plus the amount (if
         any) of any withholding obligations on the part of the Company. Such
         request may be granted or denied in the sole discretion of the
         Committee.

                  (e) No shares of Statutory Option Stock (as defined in Section
         424(c)(3)(B) of the Code) may be tendered in exercise of this option
         unless (i) such shares have been held by Optionee for at least one
         year, and (ii) at least two years have elapsed since such Statutory
         Option Stock was granted.

                  (f) The Optionee shall not participate in or be a party to the
         Stockholders' Agreement.

         3. Anti-Dilution Provisions. In the event that, during the term of this
Agreement, there is any change in the number of shares of outstanding Common
Stock of the

                                       3
<PAGE>

Company by reason of stock dividends, recapitalizations, mergers,
consolidations, split-ups, combinations or exchanges of shares and the like, the
number of shares covered by this option agreement and the price thereof shall be
adjusted, to the same proportionate number of shares and price as in this
original agreement.

         4. Investment Purpose and Other Restrictions on Transfer. Optionee
represents that, in the event of the exercise by Optionee of the option hereby
granted, or any part thereof, he or she intends to purchase the shares acquired
on such exercise for investment and not with a view to resale or other
distribution; except that the Company, at its election, may waive or release
this condition in the event the shares acquired on exercise of the option are
registered under the Securities Act of 1933, or upon the happening of any other
contingency which the Company shall determine warrants the waiver or release of
this condition. Optionee agrees that the certificates evidencing the shares
acquired by him or her on exercise of all or any part of this option, may bear a
restrictive legend, if appropriate, indicating that the shares have not been
registered under said Act and are subject to restrictions on the transfer
thereof, which legend may be in the following form (or such other form as the
Company shall determine to be proper), to-wit:

         "The shares represented by this certificate have not been registered
         under the Securities Act of 1933, but have been issued or transferred
         to the registered owner pursuant to the exemption afforded by Section
         4(2) of said Act. No transfer or assignment of these shares by the
         registered owner shall be valid or effective, and the issuer of these
         shares shall not be required to give any effect to any transfer or
         attempted transfer of these shares, including without limitation, a
         transfer by operation of law, unless (a) the issuer shall have received
         an opinion of its counsel that the shares may be transferred without
         requirement of registration under said Act, or (b) there shall have
         been delivered to the issuer a 'no-action' letter from the staff of the
         Securities and Exchange Commission, or (c) the shares are registered
         under said Act."

         In addition to the restrictions described above, Optionee may not sell,
pledge, transfer, donate, assign or otherwise dispose of (collectively,
"transfer"), whether voluntarily or by operation of law, any shares of Common
Stock acquired pursuant to the exercise of an option under this Agreement except
as provided in this Section 4.

                  (a) Right of First Refusal.

                           (1) If the Optionee intends to transfer any shares of
                  Common Stock pursuant to a bona fide purchase offer of an
                  offeror ("Offeror"), the Optionee shall deliver to the Company
                  a written notice (the "Notice") of such intention to transfer
                  such shares, setting forth in reasonable detail: (i) the
                  proposed price, (ii) the number of shares proposed to be
                  transferred, (iii) the other terms and conditions of the
                  proposed transfer of such shares, (iv) an offer to sell the
                  shares to the Company as provided herein and (v) the identity
                  of the Offeror. The shares proposed to be transferred are
                  hereinafter referred to as the "Offered Shares."

                                        4
<PAGE>

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

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

                           (4) If the Offered Shares are not purchased by the
                  Company pursuant to this Section 4, the Optionee shall be
                  entitled to sell all of the Offered Shares to the Offeror at
                  the price and on the terms and conditions specified in the
                  Notice, provided that such sale is consummated within
                  one-hundred twenty (120) days from the date the Notice is
                  delivered to the Company. For any sale of shares after such
                  one-hundred twenty (120) day period, the Optionee shall give a
                  new notice which shall reinstate the rights of the Company set
                  forth in this Section 4 to purchase the Offered Shares.

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

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

                  (d) Buy-Back Rights. If the Optionee terminates employment for
         any reason, the Optionee must, upon request by the Committee, sell his
         or her shares of Common Stock to the Company at a price equal to the
         Fair Market Value of such shares

                                        5
<PAGE>

         of Common Stock on the date of such sale. The Company shall exercise
         the buy-back right with respect to the Optionee no later than twelve
         (12) months after the date the Optionee terminates employment.

                  (e) Exceptions to Transfer Restrictions. Notwithstanding
         anything to the contrary in this Agreement, the restrictions upon
         transfer set forth in this Section 4 shall not apply to a transfer of
         shares of Common Stock by an Optionee to any of (i) the Optionee's
         heirs, executors, administrators or other personal representative upon
         death of the Optionee or (ii) the Optionee's spouse, children or
         grandchildren, or a trust for their or the Optionee's benefit; provided
         that, the restrictions on transfer in this Section 4 shall continue to
         apply to the shares received by any such permitted transferee,
         including without limitation that such permitted transferee shall not
         again transfer such shares except in accordance with this Section 4.

                  (f) Termination of Transfer Restrictions. The restrictions
         described in Sections 4(a) through 4(e) shall terminate on the earlier
         of a Public Offering of shares of Common Stock or mutual agreement of
         the parties to this Agreement.

         5. Non-Transferability. Neither the option hereby granted nor any
rights thereunder or under this Agreement may be assigned, transferred or in any
manner encumbered except by will or the laws of descent and distribution, and
any attempted assignment, transfer, mortgage, pledge or encumbrance except as
herein authorized, shall be void and of no effect. The option may be exercised
during Optionee's lifetime only by Optionee or his or her guardian or legal
representative.

         6. Termination of Employment. In the event of the termination of
employment of Optionee other than by death, the option granted may be exercised
at the times and to the extent provided in Section 6 of the Plan. [IF THE
OPTIONEE'S EMPLOYMENT IS TERMINATED OTHER THAN FOR CAUSE, THE DETERMINATION OF
WHICH SHALL BE MADE IN THE SOLE DISCRETION OF THE COMMITTEE, THE OPTION MAY BE
EXERCISED, TO THE EXTENT IT WAS ELIGIBLE FOR EXERCISE AT THE DATE OF SUCH
TERMINATION OF EMPLOYMENT, AT ANY TIME WITHIN THREE (3) MONTHS AFTER SUCH
TERMINATION, BUT NOT AFTER TEN (10) YEARS (OR FIVE (5) YEARS, IF APPLICABLE)
FROM THE DATE OF GRANTING]

         7. Death of Optionee. In the event of the death of Optionee during the
term of this Agreement and while he or she is employed by the Company (or its
parent or a subsidiary), or within three (3) months after the termination of his
or her employment, this option shall become fully vested (if not already fully
vested) and may be exercised by a legatee or legatees of Optionee under his or
her last will, or by his or her personal representatives or distributees, at any
time within a period of one year after his or her death, but not after ten (10)
years (or five (5) years, if applicable) from the Date of Grant, and only if he
or she was entitled to exercise the option at the date of his or her death.

                                        6
<PAGE>

         8. Shares Issued on Exercise of Option. It is the intention of the
Company that on any exercise of this option it will transfer to Optionee shares
of its authorized but unissued stock, Treasury shares, or shares acquired on the
public market, if applicable, or it will utilize any combination of authorized
but unissued shares, Treasury shares and shares acquired on the public market,
if applicable, to satisfy its obligations to deliver shares on any exercise
hereof.

         9. Committee Administration. This option has been granted pursuant to a
determination made by the Committee, and such Committee or any successor or
substitute committee authorized by the Board of Directors or the Board of
Directors itself, subject to the express terms of this option, shall have
plenary authority to interpret any provision of this option and to make any
determinations necessary or advisable for the administration of this option and
the exercise of the rights herein granted, and may waive or amend any provisions
hereof in any manner not adversely affecting the rights granted to Optionee by
the express terms hereof.

         10. Option an Incentive Stock Option. It is intended that this option
shall be treated as an incentive stock option under Section 422 of the Internal
Revenue Code of 1986, as amended.

         11. No Contract of Employment. Nothing contained in this Agreement
shall be considered or construed as creating a contract of employment for any
specified period of time.

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

         13. Non-Waiver of Rights. The Company's failure to enforce at any time
any of the provisions of this agreement or to require at any time performance by
Optionee of any of the provisions hereof shall in no way be construed to be a
waiver of such provisions or to affect either the validity of this agreement, or
any part hereof, or the right of the Company thereafter to enforce each and
every provision in accordance with the terms of this agreement.

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

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

                                       7
<PAGE>

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

         IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed on its behalf by the undersigned officer pursuant to due authorization,
and Optionee has signed this Agreement to evidence his or her acceptance of the
option herein granted and of the terms hereof, all as of the date hereof.

                                      BUILD-A-BEAR WORKSHOP, INC.

                                      By
                                        ------------------------------------
ATTEST:

--------------------------------
Secretary

                                      --------------------------------------
                                      Optionee

                                       8

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