Document:

EX-10.1

Exhibit 10.1

REGENERON PHARMACEUTICALS, INC.

AMENDED AND RESTATED 2000 LONG-TERM INCENTIVE PLAN

1. Purpose; Establishment

     The Regeneron Pharmaceuticals, Inc. 2000 Long-Term Incentive Plan (the “Plan”) is intended to
promote the interests of the Company (as defined below) and its shareholders by providing officers
and other employees of the Company (including directors who are also employees of the Company) with
appropriate incentives and rewards to encourage them to enter into and continue in the employ of
the Company and to acquire a proprietary interest in the Long-Term success of the Company; to
compensate the Company’s nonemployee directors and provide incentives to such nonemployee directors
that are directly linked to increases in stock value; and to reward the performance of individual
officers, other employees, consultants and nonemployee directors in fulfilling their personal
responsibilities for long-range achievements.

     The Plan was adopted and approved by the Board of Directors (defined below) on April 25, 2000 and
became effective as of such date, subject to the approval of the shareholders of the Company which
occurred on June 9, 2000. Thereafter, and prior to the adoption and approval of this Amended and
Restated 2000 Long-Term Incentive Plan, the Plan was amended from time to time by the Board of
Directors and such amendments were approved by the shareholders of the Company.

2. Definitions

     As used in the Plan, the following definitions apply to the terms indicated below:

	 	(a)	 	“Affiliate” means any entity if, at the time of granting of an Award (A) the
Company, directly or indirectly, owns at least 50% of the combined voting power of all
classes of stock of such entity or at least 50% of the ownership interests in such
entity or (B) such entity, directly or indirectly, owns at least 50% of the combined
voting power of all classes of stock of the Company.
	 
	 	(b)	 	“Agreement” shall mean the written agreement between the Company and a
Participant evidencing an Award.
	 
	 	(c)	 	“Award” shall mean any Option, Restricted Stock, Phantom Stock, Stock Bonus
or Other Award granted pursuant to the terms of the Plan.
	 
	 	(d)	 	“Board of Directors” shall mean the Board of Directors of Regeneron
Pharmaceuticals, Inc.
	 
	 	(e)	 	A “Change in Control” shall be deemed to have occurred if the event set forth
in any one of the following paragraphs shall have occurred:

	 	(1)	 	any Person is or becomes the “Beneficial Owner” (as defined
in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities
of the Company (not including in the securities Beneficially Owned by such
Person any securities acquired directly from the Company) representing 20% or
more of the Company’s then outstanding securities, excluding any Person who is
an officer or director of the Company or who becomes such a Beneficial Owner
in connection with a transaction described in clause (A) of paragraph (3)
below; or
	 
	 	(2)	 	the following individuals cease for any reason to constitute
a majority of the number of directors then serving: individuals who, on the
Effective Date, constitute the Board of Directors and any new director (other
than a director whose initial assumption of office is in connection with an
actual or threatened election contest, including but not limited to a consent
solicitation, relating to the election of di-

 

 

	 	 	 	rectors of the Company) whose
appointment or election by the Board of Directors
or nomination for election by the Company’s shareholders was approved or
recommended by a vote of at least two-thirds (2/3) of the directors then
still in office who either were directors on the Effective Date or whose
appointment, election or nomination for election was previously so approved
or recommended; or

	 	(3)	 	there is consummated a merger or consolidation of the Company
with any other corporation other than (A) a merger or consolidation which
would result in the voting securities of the Company outstanding immediately
prior to such merger or consolidation continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity or any parent thereof) at least 60% of the combined voting
power of the voting securities of the Company or such surviving entity or any
parent thereof outstanding immediately after such merger or consolidation, or
(B) a merger or consolidation effected to implement a recapitalization of the
Company (or similar transaction) in which no Person is or becomes the
Beneficial Owner, directly or indirectly, of securities of the Company (not
including in the securities Beneficially Owned by such Person any securities
acquired directly from the Company) representing 20% or more of the combined
voting power of the Company’s then outstanding securities; or
	 
	 	(4)	 	the shareholders of the Company approve a plan of complete
liquidation or dissolution of the Company or there is consummated an agreement
for the sale or disposition by the Company of all or substantially all of the
Company’s assets, other than a sale or disposition by the Company of all or
substantially all of the Company’s assets to an entity at least 75% of the
combined voting power of the voting securities of which are owned by Persons
in substantially the same proportions as their ownership of the Company
immediately prior to such sale.

	 	(f)	 	“Code” shall mean the Internal Revenue Code of 1986, as amended from time to
time, and any regulations promulgated thereunder.
	 
	 	(g)	 	“Committee” shall mean, at the discretion of the Board of Directors, the full
Board of Directors or a committee of the Board of Directors, which shall consist of
two or more persons, each of whom, unless otherwise determined by the Board of
Directors, is an “outside director” within the meaning of Section 162(m) of the Code
and a “nonemployee director” within the meaning of Rule 16b-3.
	 
	 	(h)	 	“Company” shall mean Regeneron Pharmaceuticals, Inc., a New York corporation,
and, where appropriate, each of its Affiliates.
	 
	 	(i)	 	“Company Stock” shall mean the common stock of the Company, par value $.001
per share.
	 
	 	(j)	 	“Covered Employee” shall have the meaning set forth in Section 162(m) of the
Code.
	 
	 	(k)	 	“Effective Date” shall mean April 25, 2000.
	 
	 	(l)	 	“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended
from time to time.
	 
	 	(m)	 	The “Fair Market Value” of a share of Company Stock, as of a date of
determination, shall mean (1) the average of the high and low sales price per share of
Company Stock on the national securities exchange or national market system on which
such stock is principally traded on such date or, if such date is not a trading day,
on the last preceding date on which there was a sale of such stock on such exchange,
or (2) if the shares of Company Stock are not then listed on a national securities
exchange or national market system, or the value of such shares is not otherwise
determinable, such value as determined by the Committee in good faith.
	 
	 	(n)	 	“Incentive Stock Option” shall mean an Option that is an “incentive stock
option” within the 

 

 

	 	 	 	meaning of Section 422 of the Code, or any successor provision, and
that is designated by the Committee as an Incentive Stock Option.

	 	(o)	 	“Nonemployee Director” shall mean a member of the Board of Directors who is
not an employee of the Company.
	 
	 	(p)	 	“Nonqualified Stock Option” shall mean an Option other than an Incentive
Stock Option.
	 
	 	(q)	 	“Option” shall mean an option to purchase shares of Company Stock granted
pursuant to Section 7 (or, with respect to a Nonemployee Director, pursuant to Section
12 hereof).
	 
	 	(r)	 	“Other Award” shall mean an award granted pursuant to Section 11 hereof.
	 
	 	(s)	 	“Participant” shall mean an employee or consultant of the Company to whom an
Award is granted pursuant to the Plan, or upon the death of the employee or
consultant, his or her successors, heirs, executors and administrators, as the case
may be.
	 
	 	(t)	 	“Person” shall have the meaning set forth in Section 3(a)(9) of the Exchange
Act, as modified and used in Sections 13(d) and 14(d) thereof, except that such term
shall not include (1) the Company, (2) a trustee or other fiduciary holding securities
under an employee benefit plan of the Company, (3) an underwriter temporarily holding
securities pursuant to an offering of such securities, or (4) a corporation owned,
directly or indirectly, by the shareholders of the Company in substantially the same
proportions as their ownership of stock of the Company.
	 
	 	(u)	 	“Phantom Stock” shall mean the right, granted pursuant to Section 9, to
receive in cash or shares the Fair Market Value of a share of Company Stock.
	 
	 	(v)	 	“Restricted Stock” shall mean a share of Company Stock which is granted
pursuant to the terms of Section 8 hereof and which is subject to the restrictions set
forth in Section 8(d).
	 
	 	(w)	 	“Rule 16b-3” shall mean the Rule 16b-3 promulgated under the Exchange Act, as
amended from time to time.
	 
	 	(x)	 	“Securities Act” shall mean the Securities Act of 1933, as amended from time
to time.
	 
	 	(y)	 	“Stock Bonus” shall mean a bonus payable in shares of Company Stock granted
pursuant to Section 10.
	 
	 	(z)	 	“Subsidiary” shall mean a “subsidiary corporation” within the meaning of
Section 424(f) of the Code.
	 
	 	(aa)	 	“Vesting Date” shall mean the date established by the Committee on which a
share of Restricted Stock or Phantom Stock may vest.

3. Stock Subject to the Plan

	 	(a)	 	Shares Available for Awards
	 
	 	 	 	The shares of Company Stock that may be issued with respect to Awards made under
the Plan may be authorized but unissued Company Stock or authorized and issued Company
Stock held in the Company treasury (including authorized and issued shares of Company
Stock acquired or purchased by the Company and held by the Company as treasury shares).
Subject to the subsequent provisions of this Section 3, including the
adjustment provisions contained herein, the maximum number of shares of Company Stock
that may be delivered pursuant to Awards made under the Plan shall equal the sum of:
(i) 28,500,000 shares of Company Stock; (ii) any shares of Company Stock previously
reserved for issuance under the Company’s 1990 Long-Term Incentive Plan (the “Prior
Plan”), but which remain unissued as of June 14, 2002 and any shares of Company Stock
that are represented by 

 

 

	 	 	 	awards granted under the Prior Plan which are forfeited,
expire, or are cancelled without delivery of shares of Company Stock; and (iii) any shares
of Company Stock that again become available for Awards pursuant to Section
3(e) below. Notwithstanding the foregoing, the maximum number of shares of Company
Stock that may be issued pursuant to
Incentive Stock Options shall be 28,500,000 shares.

	 	(b)	 	Individual Limitation
	 
	 	 	 	To the extent required by Section 162(m) of the Code, the total number of shares
of Company Stock subject to Awards (including Awards which may be payable in cash but
denominated as shares of Company Stock, i.e., Phantom Stock), awarded to any employee
shall not exceed 1,500,000 shares during any tax year of the Company in which the
employee first becomes employed by the Company or a Subsidiary, or 1,000,000 shares in
any other tax year of the Company (in each case subject to adjustment as provided
herein). In addition, for any tax year of the Company, the maximum number of shares
of Restricted Stock that may be granted to a Covered Employee for which the lapse of
the restrictions of Section 8(d) is subject to the attainment of preestablished
performance goals in accordance with Section 8(j) shall not exceed 200,000 (subject to
adjustment as provided herein).
	 
	 	(c)	 	Adjustment for Change in Capitalization
	 
	 	 	 	In the event that any dividend or other distribution is declared (whether in the
form of cash, Company Stock, or other property), or there occurs any recapitalization,
Company Stock split, reverse Company Stock split, reorganization, merger,
consolidation, spin-off, combination, repurchase, or share exchange, or other similar
corporate transaction or event, unless the Committee determines that it is otherwise
inappropriate, (1) the number and kind of shares of Company Stock which may thereafter
be issued in connection with Awards, (2) the number and kind of shares of Company
Stock issued or issuable in respect of outstanding Awards, (3) the exercise price,
grant price or purchase price relating to any Award, and (4) the maximum number of shares
subject to Awards which may be awarded to any employee during any tax year of
the Company shall be equitably adjusted as necessary to prevent the dilution or
enlargement of the rights of Participants and Nonemployee Directors without change in
the aggregate purchase price; provided that, with respect to Incentive Stock Options,
such adjustment shall be made in accordance with Section 424 of the Code.
	 
	 	(d)	 	Adjustment for Change or Exchange of Shares for Other Consideration
	 
	 	 	 	In the event the outstanding shares of Company Stock shall be changed into or
exchanged for any other class or series of capital stock or cash, securities or other
property pursuant to a recapitalization, reclassification, merger, consolidation,
combination or similar transaction (“Transaction”), then, unless otherwise determined
by the Committee in its sole and absolute discretion, (1) each Option shall thereafter
become exercisable for the number and/or kind of capital stock, and/or the amount of
cash, securities or other property so distributed, into which the shares of Company
Stock subject to the Option would have been changed or exchanged had the Option been
exercised in full prior to such transaction, provided that, if the kind or amount of
capital stock or cash, securities or other property received in such transaction is
not the same for each outstanding share, then the kind or amount of capital stock or
cash, securities or other property for which the Option shall thereafter become
exercisable (or the other Award shall thereafter represent) shall be the kind and
amount so receivable per share by a plurality of the shares of Company Stock, and
provided further that, if necessary, the provisions of the Option shall be
appropriately adjusted so as to be applicable, as nearly as may reasonably be, to any shares
of capital stock, cash, securities or other property thereafter issuable or
deliverable upon exercise of the Option, and (2) each Award that is not an Option and
that is not automatically changed in connection with the Transaction shall represent
the number and/or kind of shares of capital stock, and/or the amount of cash,
securities or other property so distributed, into which the number of shares of
Company Stock covered by the Award would have been changed or exchanged had they been
held by a shareholder of the Company.
	 
	 	(e)	 	Reuse of Shares

 

 

	 	 	 	The following shares of Company Stock shall again become available for Awards:
(1) any shares subject to an Award that remain unissued upon the cancellation,
surrender, exchange or termination of such award for any reason whatsoever and any shares
of Restricted Stock forfeited, and (2) any previously owned or withheld shares
of Company Stock obtained by
the Participant pursuant to an Option exercise and received by the Company (whether
by actual delivery or attestation) in exchange for Option shares upon a
Participant’s exercise of an Option, as permitted under Section 7(c)(3) hereof.

4. Administration of the Plan

     The Plan shall be administered by the Committee. The Committee shall have the authority in its
sole discretion, subject to and not inconsistent with the express provisions of the Plan, to
administer the Plan and to exercise all the powers and authorities either specifically granted to
it under the Plan or necessary or advisable in the administration of the Plan, including, without
limitation, the authority to grant Awards; to determine the persons to whom and the time or times
at which Awards shall be granted; to determine the type and number of Awards to be granted, the
number of shares of Stock to which an Award may relate and the terms, conditions, restrictions and
performance criteria relating to any Award; to determine whether, to what extent, and under what
circumstances an Award may be settled, canceled, forfeited, exchanged, or surrendered; to make
adjustments in the performance goals in recognition of unusual or nonrecurring events affecting the
Company or the financial statements of the Company (to the extent not inconsistent with Section
162(m) of the Code, if applicable), or in response to changes in applicable laws, regulations, or
accounting principles; to construe and interpret the Plan and any Award; to prescribe, amend and
rescind rules and regulations relating to the Plan; to determine the terms and provisions of
Agreements; and to make all other determinations deemed necessary or advisable for the
administration of the Plan.

     The Committee may, in its sole and absolute discretion, without amendment to the Plan, (a)
accelerate the date on which any Option granted under the Plan becomes exercisable, waive or amend
the operation of Plan provisions respecting exercise after termination of employment or otherwise
adjust any of the terms of such Option, and (b) subject to Section (b) hereof, accelerate the
Vesting Date, or waive any condition imposed hereunder, with respect to any share of Restricted
Stock, Phantom Stock or other Award or otherwise adjust any of the terms applicable to any such
Award. Except pursuant to the operation of Section 3(c) or 3(d), the Committee shall not have the
authority to decrease the exercise price of Options granted under the Plan.

5. Eligibility

     The persons who shall be eligible to receive Awards pursuant to the Plan shall be such employees of
the Company (including officers of the Company, whether or not they are directors of the Company),
Nonemployee Directors and nonemployee service providers and consultants, in each case as the
Committee shall select from time to time. Nonqualified Stock Options shall be granted to
Nonemployee Directors in accordance with the provisions of Section 12 hereof and as otherwise
determined by the Committee. The grant of any Award hereunder at any time to any employee, service
provider or consultant shall not entitle such person to a grant of an Award at any future time.

6. Awards Under the Plan; Agreement

     The Committee may grant Options, shares of Restricted Stock, shares of Phantom Stock, Stock Bonuses
and Other Awards in such amounts and with such terms and conditions as the Committee shall
determine, subject to the provisions of the Plan. Nonqualified Stock Options shall be granted to
Nonemployee Directors in accordance with Section 12 hereof.

     Each Award granted under the Plan (except an unconditional Stock Bonus) shall be evidenced by an
Agreement which shall contain such provisions as the Committee may in its sole discretion deem
necessary or desirable which are not in conflict with the terms of the Plan. By accepting an
Award, a Participant thereby agrees that the award shall be subject to all of the terms and
provisions of the Plan and the applicable Agreement.

7. Options

	 	(a)	 	Identification of Options

 

 

	 	 	 	Each Option shall be clearly identified in the applicable Agreement as either an
Incentive Stock Option or a Nonqualified Stock Option.
	 
	 	(b)	 	Exercise Price
	 
	 	 	 	Each Agreement with respect to an Option shall set forth the amount (the “option
exercise price”) payable by the grantee to the Company upon exercise of the Option.
The option exercise price per share shall be determined by the Committee; provided,
however, that the option exercise price shall in no event be less than the Fair Market
Value of a share of Company Stock on the date the Option is granted.
	 
	 	(c)	 	Term and Exercise of Options

	 	(1)	 	Unless the applicable Agreement provides otherwise, an Option
shall become cumulatively exercisable as to 20% of the shares covered thereby
on each of the first, second, third, fourth, and fifth anniversaries of the
date of grant. The Committee shall determine the expiration date of each
Option; provided, however, that no Incentive Stock Option shall be exercisable
more than ten (10) years after the date of grant.
	 
	 	(2)	 	To the extent that an Option to purchase shares is not
exercised by a Participant when it becomes initially exercisable, it shall not
expire but carry forward and shall be exercisable until its expiration or as
provided by Section 7(e) hereof. If any Option is exercisable in the amount
of one hundred (100) or more full shares of Company stock, the Company shall
not be obligated to permit the partial exercise of such exercisable Option for
less than one hundred (100) full shares.
	 
	 	(3)	 	An Option shall be exercised by delivering notice as
specified in the Agreement on the form of notice provided by the Company.
Payment for shares of Company Stock purchased upon the exercise of an Option
shall be made on the effective date of such exercise by one or a combination
of the following means: (A) in cash or by personal check, certified check,
bank cashier’s check or wire transfer; (B) in shares of Company Stock owned by
the Participant for at least six months prior to the date of exercise and
valued at their Fair Market Value on the effective date of such exercise; or
(C) by any such other methods as the Committee may from time to time
authorize. In the case of a Participant or Nonemployee Director who is
subject to Section 16 of the Exchange Act, the Company may require that the
method of making such payment be in compliance with Section 16 and the rules
and regulations thereunder. Any payment in shares of Company Stock shall be
effected by the delivery of such shares to the Secretary of the Company, duly
endorsed in blank or accompanied by stock powers duly executed in blank,
together with any other documents and evidences as the Secretary of the
Company shall require.
	 
	 	(4)	 	Certificates for shares of Company Stock purchased upon the
exercise of an Option shall be issued in the name of or for the account of the
Participant, Nonemployee Director or other person entitled to receive such
shares, and delivered to the Participant, Nonemployee Director or such other
person as soon as practicable following the effective date on which the Option
is exercised.

	 	(d)	 	Limitations on Incentive Stock Options

	 	(1)	 	To the extent that the aggregate Fair Market Value of shares
of Company Stock with respect to which Incentive Stock Options are exercisable
for the first time by a Participant during any calendar year under the Plan
and any other stock option plan of the Company or a Subsidiary shall exceed
$100,000, such Options shall be treated as Nonqualified Stock Options. Such
Fair Market Value shall be determined as of the date on which each such
Incentive Stock Option is granted.
	 
	 	(2)	 	No Incentive Stock Option may be granted to an individual if,
at the time of the proposed grant, such individual owns (or is deemed to own
under the Code) stock 

 

 

	 	 	 	possessing more than ten percent of the total combined
voting power of all classes of stock of the Company unless (A) the exercise
price of such Incentive Stock Option is at least 110% of the Fair Market Value
of a share of Company Stock at the time such Incentive Stock Option is
granted, and (B) such Incentive Stock Option is not exercisable after the
expiration of five years from the date such Incentive Stock Option is granted.

	 	(e)	 	Effect of Termination of Employment

	 	(1)	 	In the event that the employment of a Participant with the
Company shall terminate for any reason other than (A) Cause, as defined in the
Agreement, or (B) death, the Options granted to such Participant, to the
extent that they are exercisable at the time of such termination, shall remain
exercisable for such period as may be provided in the Agreement (or as may be
provided by the Committee), but in no event following the expiration of its
term. The treatment of any Option that remains unexercisable as of the date
of termination shall be as set forth in the Agreement (or as may be otherwise
determined by the Committee).
	 
	 	(2)	 	In the event that the employment of a Participant with the
Company shall terminate on account of the death of the Participant, all
Options granted to such Participant that remain outstanding as of the date of
death, shall become fully exercisable and shall remain exercisable by the
Participant’s legal representatives, heirs or legatees for such period as may
be provided in the Agreement (or as otherwise may be determined by the
Committee), but in no event following the expiration of its term. Cessation
of active employment or service due to commencement of long-term disability as
determined by the Committee shall not be deemed to constitute a termination of
employment or service for purposes of the Plan, and during the continuance of
such long-term disability the individual shall be deemed to continue active
employment or service with the Company; provided, however, that the Committee
may in its sole discretion determine that a Participant’s long-term disability
constitutes a permanent disability and may deem such permanent disability to
be a termination of employment or service for any or all purposes under this
Plan.
	 
	 	(3)	 	In the event of the termination of a Participant’s employment
for Cause, as defined in the Agreement, all outstanding Options granted to
such Participant shall expire at the commencement of business on the date of
such termination.

	 	(f)	 	Acceleration of Exercise Date Upon Change in Control
	 
	 	 	 	The Committee in its sole and absolute discretion may provide, either at the time
of grant as provided in the Agreement or thereafter, that upon the occurrence of a
Change in Control, an Option granted under the Plan and outstanding at such time shall
(1) become immediately exercisable in whole or in part (in which case the Committee
shall determine the period during which such Option shall remain exercisable), and/or
(2) be canceled in exchange for the right to receive property equivalent in value to
such Option, as determined by the Committee.
	 
	 	(g)	 	Leave of Absence

     In the case of any Participant on an approved leave of absence, the Committee may make such
provision respecting the continuance of the Option while in the employ or service of the
Company as it may deem equitable, except that in no event may an Option be exercised after
its expiration.

8. Restricted Stock

	 	(a)	 	Price

 

 

	 	 	 	At the time of the grant of shares of Restricted Stock, the Committee shall
determine the price, if any, to be paid by the Participant for each share of
Restricted Stock subject to the Award.
	 
	 	(b)	 	Vesting Date
	 
	 	 	 	Subject to Section 31 hereof, at the time of the grant of shares of Restricted Stock, the
Committee shall establish a Vesting Date or Vesting Dates with respect to such shares.
The Committee may divide such shares into classes and assign a different Vesting Date
for each
class. Provided that all conditions to the vesting of a share of Restricted Stock
imposed pursuant to Section 8(c) are satisfied, and except as provided in Section
8(h), upon the occurrence of the Vesting Date with respect to a share of Restricted
Stock, such share shall vest and the restrictions of Section 8(d) shall lapse.
	 
	 	(c)	 	Conditions to Vesting
	 
	 	 	 	Subject to Section 31 hereof, at the time of the grant of shares of Restricted Stock, the
Committee may impose such restrictions or conditions to the vesting of such shares as
it, in its absolute discretion, deems appropriate.
	 
	 	(d)	 	Restrictions on Transfer Prior to Vesting
	 
	 	 	 	Prior to the vesting of a share of Restricted Stock, no transfer of a
Participant’s rights with respect to such share, whether voluntary or involuntary, by
operation of law or otherwise, shall be permitted. Immediately upon any attempt to
transfer such rights, such share, and all of the rights related thereto, shall be
forfeited by the Participant.
	 
	 	(e)	 	Dividends on Restricted Stock
	 
	 	 	 	The Committee in its discretion may require that any dividends paid on shares of
Restricted Stock be held in escrow until all restrictions on such shares have lapsed.
	 
	 	(f)	 	Issuance of Certificates

	 	(1)	 	Reasonably promptly after the date of grant with respect to shares of
Restricted Stock, the Company shall cause to be issued a stock
certificate, registered in the name of or for the account of the Participant
to whom such shares were granted, evidencing such shares. Each such stock
certificate shall bear the following legend:

	 	 	 	The transferability of this certificate
and the shares of stock represented hereby are subject to
the restrictions, terms and conditions (including forfeiture
provisions and restrictions against transfer) contained in
the Regeneron Pharmaceuticals, Inc. Amended and Restated
2000 Long Term Incentive Plan and an Agreement entered into
between the registered owner of such shares and the Company.
A copy of the Plan and Agreement is on file in the office
of the Secretary of the Company, 777 Old Saw Mill River
Road, Tarrytown, New York 10591-6707.

	 	 	 	Such legend shall not be removed until such shares vest pursuant
to the terms hereof.
	 
	 	(2)	 	Each certificate issued pursuant to this Section 8(f),
together with the stock powers relating to the shares of Restricted Stock
evidenced by such certificate, shall be held by the Company unless the
Committee determines otherwise.

	 	(g)	 	Consequences of Vesting

 

 

	 	 	 	Upon the vesting of a share of Restricted Stock pursuant to the terms hereof, the
restrictions of Section 8(d) shall lapse with respect to such share. Reasonably
promptly after a share of Restricted Stock vests, the Company shall cause to be
delivered to the Participant to whom such shares were granted, a certificate
evidencing such share, free of the legend set forth in Section 8(f).
	 
	 	(h)	 	Effect of Termination of Employment

	 	(1)	 	Except as the Committee in its sole and absolute discretion
may otherwise provide in the applicable Agreement, and subject to the
Committee’s amendment authority
pursuant to Section 4, upon the termination of a Participant’s employment
for any reason other than Cause, any and all shares to which restrictions
on transferability apply shall be immediately forfeited by the Participant
and transferred to, and reacquired by, the Company; provided that if the
Committee, in its sole and absolute discretion, shall within thirty (30)
days after such termination of employment notify the Participant in writing
of its decision not to terminate the Participant’s rights in such shares,
then the Participant shall continue to be the owner of such shares subject
to such continuing restrictions as the Committee may prescribe in such
notice. In the event of a forfeiture of shares pursuant to this section,
the Company shall repay to the Participant (or the Participant’s estate)
any amount paid by the Participant for such shares. In the event that the
Company requires a return of shares, it shall also have the right to
require the return of all dividends paid on such shares, whether by
termination of any escrow arrangement under which such dividends are held
or otherwise.
	 
	 	(2)	 	In the event of the termination of a Participant’s employment
for Cause, all shares of Restricted Stock granted to such Participant which
have not vested as of the date of such termination shall immediately be
returned to the Company, together with any dividends paid on such shares, in
return for which the Company shall repay to the Participant any amount paid by
the Participant for such shares.

	 	(i)	 	Effect of Change in Control
	 
	 	 	 	The Committee in its sole and absolute discretion may provide, either at the time
of grant or thereafter, that upon the occurrence of a Change in Control, shares of
Restricted Stock which have not theretofore vested shall immediately vest in whole or
in part and all restrictions on such shares shall immediately lapse in whole or in
part.
	 
	 	(j)	 	Special Provisions Regarding Awards
	 
	 	 	 	Notwithstanding anything to the contrary contained herein, Restricted Stock granted
pursuant to this Section 8 to Covered Employees may be based on the attainment by the
Company of performance goals pre-established by the Committee, based on one or more of
the following criteria (in each case, as determined in accordance with generally
accepted accounting principles): (1) return on total shareholder equity; (2) earnings
per share of Company Stock; (3) net income (before or after taxes); (4) earnings
before interest, taxes, depreciation and amortization; (5) revenues; (6) return on
assets; (7) market share; (8) cost reduction goals; (9) any combination of, or a
specified increase in, any of the foregoing; (10) the achievement of certain target
levels of discovery and/or development of products, including, without limitation, the
regulatory approval of new products; (11) the achievement of certain target levels of
sales of new products or licensing in or out of new drugs; (12) the achievement of
certain research and development objectives; (13) the formation of joint ventures,
research or development collaborations, or the completion of other corporate
transactions; and (14) such other criteria as the shareholders of the Company may
approve. In addition, such performance goals may be based upon the attainment of
specified levels of Company performance under one or more of the measures described
above relative to the performance of other corporations. To the extent permitted
under Section 162(m) of the Code (including, without limitation, compliance with any
requirements for shareholder approval), the Committee may designate additional
business criteria on which the performance goals may be based or adjust, modify or
amend the aforementioned business 

 

 

	 	 	 	criteria. Such shares of Restricted Stock shall be
released from restrictions only after the attainment of such performance measures has
been certified by the Committee.

9. Phantom Stock

	 	(a)	 	Vesting Date
	 
	 	 	 	Subject to Section 31 hereof, at the time of the grant of shares of Phantom Stock, the
Committee shall establish a Vesting Date or Vesting Dates with respect to such shares.
The Committee may divide such shares into classes and assign a different Vesting Date
for each class. Provided that all conditions to the vesting of a share of Phantom
Stock imposed
pursuant to Section 9(c) are satisfied, and except as provided in Section 9(d),
upon the occurrence of the Vesting Date with respect to a share of Phantom Stock,
such share shall vest.
	 
	 	(b)	 	Benefit Upon Vesting
	 
	 	 	 	Upon the vesting of a share of Phantom Stock, the Participant shall be entitled to
receive, within thirty (30) days of the date on which such share vests, an amount, in
cash and/or shares of Company Stock, as determined by the Committee, equal to the sum
of (1) the Fair Market Value of a share of Company Stock on the date on which such
share of Phantom Stock vests, and (2) the aggregate amount of cash dividends paid with
respect to a share of Company Stock during the period commencing on the date on which
the share of Phantom Stock was granted and terminating on the date on which such share
vests.
	 
	 	(c)	 	Conditions to Vesting
	 
	 	 	 	Subject to Section 31 hereof, at the time of the grant of shares of Phantom Stock, the
Committee may impose such restrictions or conditions to the vesting of such shares as
it, in its absolute discretion, deems appropriate, to be contained in the Agreement.
	 
	 	(d)	 	Effect of Termination of Employment
	 
	 	 	 	Except as the Committee in its sole and absolute discretion may otherwise provide in the
applicable Agreement, and subject to the Committee’s amendment authority pursuant to
Section 4, shares of Phantom Stock that have not vested, together with any dividends
credited on such shares, shall be forfeited upon the Participant’s termination of
employment for any reason.
	 
	 	(e)	 	Effect of Change in Control
	 
	 	 	 	The Committee in its sole and absolute discretion may provide, either at the time
of grant or thereafter, that upon the occurrence of a Change in Control, outstanding shares
of Phantom Stock which have not theretofore vested shall immediately vest in
whole or in part and payment in respect of such vested shares shall be made in
accordance with the terms of this Plan.
	 
	 	(f)	 	Special Provisions Regarding Awards
	 
	 	 	 	Notwithstanding anything to the contrary contained herein, the vesting of Phantom Stock
granted pursuant to this Section 9 to Covered Employees may be based on the attainment
by the Company of one or more of the performance criteria set forth in Section 8(j)
hereof, in each case, as determined in accordance with generally accepted accounting
principles. No payment in respect of any such Phantom Stock award shall be paid to a
Covered Employee until the attainment of the respective performance measures have been
certified by the Committee.

10. Stock Bonuses

 

 

     In the event that the Committee grants a Stock Bonus, a certificate for the shares of Company Stock
constituting such Stock Bonus shall be issued in the name of the Participant to whom such grant was
made and delivered to such Participant as soon as practicable after the date on which such Stock
Bonus is payable. Covered Employees shall be eligible to receive Stock Bonus grants hereunder only
after a determination of eligibility is made by the Committee, in its sole discretion.

11. Other Awards

     Other forms of Awards (“Other Awards”) valued in whole or in part by reference to, or otherwise
based on, Company Stock may be granted either alone or in addition to other Awards under the Plan.
Subject to the provisions of the Plan, the Committee shall have sole and complete authority to
determine the persons to whom and the time or times at which such Other Awards shall be granted,
the number of shares of Company Stock to be granted pursuant to such Other Awards and all other
conditions of such Other Awards, subject to
Section 31 hereof.

12. Nonemployee Director Formula Stock Options

     The provisions of this Section 12 shall apply only to grants of Nonqualified Stock Options to
Nonemployee Directors.

	 	(a)	 	General
	 
	 	 	 	Nonemployee Directors shall receive Nonqualified Stock Options under the Plan. The
exercise price per share of Company Stock purchasable pursuant to a Nonqualified Stock
Option granted to a Nonemployee Director shall be the Fair Market Value of a share of
Company Stock on the date of grant.
	 
	 	(b)	 	Timing of Grant
	 
	 	 	 	On the first business day (i.e., a day other than Saturday, Sunday or any other
day in which the securities exchange on which the Company Stock trades is closed)
following January 1 of each calendar year, each then serving Nonemployee Director
shall be automatically granted a Nonqualified Stock Option to purchase 15,000 shares
of Company Stock. In addition, on the date that shareholders approve this Plan, each
then Nonemployee Director shall be automatically granted a Nonqualified Stock Option
to purchase 5,000 shares of Company Stock.
	 
	 	(c)	 	Method and Time of Payment
	 
	 	 	 	Each Nonqualified Stock Option granted under this Section 12 shall be exercised in
the manner described in Section 7(c)(3).
	 
	 	(d)	 	Term and Exercisability
	 
	 	 	 	Each Nonqualified Stock Option granted under this Section 12 shall (1) become
cumulatively exercisable as to 33-1/3% of the shares covered thereby on each of the
first, second and third anniversaries of the date that the Nonqualified Stock Option
is granted and (2) expire ten years from the date of grant. The exercisability of
each Nonqualified Stock Option granted to a Nonemployee Director shall be subject to
an acceleration of exercisability upon a Change in Control as described in Section
7(f).
	 
	 	(e)	 	Termination
	 
	 	 	 	Except as the Committee in its sole and absolute discretion may otherwise provide in an
applicable Agreement, and subject to the Committee’s amendment authority pursuant to
Section 4, in the event of the termination of a Nonemployee Director’s service with
the Company other than for Cause, as defined in the Agreement, any outstanding
Nonqualified Stock Option held by such Nonemployee Director under this Section 12, to
the extent that it is exercisable on the date of such termination, may be exercised by
such Nonemployee 

 

 

	 	 	 	Director (or, if applicable, by his or her executors, administrator,
legatees or distributees) during such period as may be provided in the Agreement (or
as may be otherwise determined by the Committee) but in no event following the
expiration of such Nonqualified Stock Option, and the remainder of the Nonqualified
Stock Option which is not exercisable on the date of such termination, shall expire at
the commencement of business on the date of such termination. In the event of the
termination of a Nonemployee Director’s service with the Company for Cause, as defined
in the Agreement, all outstanding Nonqualified Stock Options granted to such
Nonemployee Director shall expire at the commencement of business on the date of such
termination. For purposes of the Plan, any termination of a Nonemployee Director’s
service with the Company shall not be deemed to occur if the Nonemployee Director
continues to serve as consultant, employee or in any other capacity.

13. Rights as a Shareholder

     No person shall have any rights as a shareholder with respect to any shares of Company Stock
covered by or relating to any Award until the date of issuance of a stock certificate with respect
to such shares. Except as otherwise expressly provided in Section 3(c), no adjustment to any Award
shall be made for dividends or other rights for which the record date occurs prior to the date such
stock certificate is issued.

14. No Employment Rights; No Right to Award

     Nothing contained in the Plan or any Agreement shall confer upon any Participant any right with
respect to the continuation of employment by the Company or interfere in any way with the right of
the Company, subject to the terms of any separate employment agreement to the contrary, at any time
to terminate such employment or to increase or decrease the compensation of the Participant.

     No person shall have any claim or right to receive an Award hereunder. The Committee’s granting of
an Award to a participant at any time shall neither require the Committee to grant any other Award
to such Participant or other person at any time or preclude the Committee from making subsequent
grants to such Participant or any other person.

15. Securities Matters

	 	(a)	 	The Company shall be under no obligation to effect the registration pursuant
to the Securities Act of any interests in the Plan or any shares of Company Stock to
be issued hereunder or to effect similar compliance under any state laws.
Notwithstanding anything herein to the contrary, the Company shall not be obligated to
cause to be issued or delivered any certificates evidencing shares of Company Stock
pursuant to the Plan unless and until the Company is advised by its counsel that the
issuance and delivery of such certificates is in compliance with all applicable laws,
regulations of governmental authority and the requirements of any securities exchange
on which shares of Company Stock are traded. The Committee may require, as a
condition of the issuance and delivery of certificates evidencing shares of Company
Stock pursuant to the terms hereof, that the recipient of such shares make such
agreements and representations, and that such certificates bear such legends, as the
Committee, in its sole discretion, deems necessary or desirable.
	 
	 	(b)	 	The transfer of any shares of Company Stock hereunder shall be effective only
at such time as counsel to the Company shall have determined that the issuance and
delivery of such shares is in compliance with all applicable laws, regulations of
governmental authority and the requirements of any securities exchange on which shares
of Company Stock are traded. The Committee may, in its sole discretion, defer the
effectiveness of any transfer of shares of Company Stock hereunder in order to allow
the issuance of such shares to be made pursuant to registration or an exemption from
registration or other methods for compliance available under federal or state
securities laws. The Committee shall inform the Participant in writing of its
decision to defer the effectiveness of a transfer. During the period of such deferral
in connection with the exercise of an Option, the Participant may, by written notice,
withdraw such exercise and obtain the refund of any amount paid with respect thereto.

16. Withholding Taxes

 

 

     Whenever cash is to be paid pursuant to an Award, the Company shall have the right to deduct
therefrom an amount sufficient to satisfy any federal, state and local withholding tax requirements
related thereto.

     Whenever shares of Company Stock are to be delivered pursuant to an Award, the Company shall have
the right to require the Participant to remit to the Company in cash an amount sufficient to
satisfy any federal, state and local withholding tax requirements related thereto. With the
approval of the Committee, a Participant may satisfy the foregoing requirement by electing to have
the Company withhold from delivery shares of Company Stock having a value equal to the minimum
amount of tax required to be withheld. Such shares shall be valued at their Fair Market Value on
the date of which the amount of tax to be withheld is determined. Fractional share amounts shall
be settled in cash. Such a withholding election may be made with respect to all or any portion of
the shares to be delivered pursuant to an Award.

17. Notification of Election Under Section 83(b) of the Code

     If any Participant shall, in connection with the acquisition of shares of Company Stock under the
Plan, make the election permitted under Section 83(b) of the Code, such Participant shall notify
the Company
of such election within ten (10) days of filing notice of the election with the Internal Revenue
Service.

18. Notification Upon Disqualifying Disposition Under Section 421(b) of the Code

     Each Agreement with respect to an Incentive Stock Option shall require the Participant to notify
the Company of any disposition of shares of Company Stock issued pursuant to the exercise of such
Option under the circumstances described in Section 421(b) of the Code (relating to certain
disqualifying dispositions), within ten (10) days of such disposition.

19. Amendment or Termination of the Plan

     The Board of Directors may, at any time, suspend or terminate the Plan or revise or amend it in any
respect whatsoever; provided, however, that shareholder approval shall be required if and to the
extent the Board of Directors determines that such approval is appropriate for purposes of
satisfying Sections 162(m) or 422 of the Code or Rule 16b-3 or other applicable law. Awards may be
granted under the Plan prior to the receipt of such shareholder approval but each such grant shall
be subject in its entirety to such approval and no award may be exercised, vested or otherwise
satisfied prior to the receipt of such approval. Nothing herein shall restrict the Committee’s
ability to exercise its discretionary authority pursuant to Section 4, which discretion may be
exercised without amendment to the Plan. No action hereunder may, without the consent of a
Participant, reduce the Participant’s rights under any outstanding Award.

20. Transferability

     Upon the death of a Participant or Nonemployee Director, outstanding Awards granted to such
Participant or Nonemployee Director may be exercised only by the executor or administrator of the
Participant’s or Nonemployee Director’s estate or by a person who shall have acquired the right to
such exercise by will or by the laws of descent and distribution. No transfer of an Award by will
or the laws of descent and distribution shall be effective to bind the Company unless the Committee
shall have been furnished with (a) written notice thereof and with a copy of the will and/or such
evidence as the Committee may deem necessary to establish the validity of the transfer, and (b) an
agreement by the transferee to comply with all the terms and conditions of the Award that are or
would have been applicable to the Participant or Nonemployee Director and to be bound by the
acknowledgments made by the Participant or Nonemployee Director in connection with the grant of the
Award.

     During the lifetime of a Participant or Nonemployee Director, the Committee may, in its sole and
absolute discretion, permit the transfer of an outstanding Option, unless such Option is an
Incentive Stock Option and the Committee and the Participant intends that it shall retain such
status. Subject to the approval of the Committee and to any conditions that the Committee may
prescribe, a Participant or Nonemployee Director may, upon providing written notice to the
Secretary of the Company, elect to transfer any or all Options granted to such Participant pursuant
to the Plan to members of his or her immediate family (including, but not limited to, children,
grandchildren and spouse or to trusts for the benefit of such immediate family members or to
partnerships in which such family members are the only partners) or to other persons or entities
approved by the Committee; provided, however, that no such transfer by any Participant or
Nonemployee Director may be made in exchange for consideration.

 

 

21. Expenses and Receipts

     The expenses of the Plan shall be paid by the Company. Any proceeds received by the Company in
connection with any Award shall be used for general corporate purposes.

22. Failure to Comply

     In addition to the remedies of the Company elsewhere provided for herein, failure by a Participant
or Nonemployee Director (or beneficiary) to comply with any of the terms and conditions of the Plan
or the applicable Agreement, unless such failure is remedied by such Participant or Nonemployee
Director (or beneficiary) within ten days after notice of such failure by the Committee, shall be
grounds for the cancellation and forfeiture of such Award, in whole or in part, as the Committee,
in its absolute discretion, may determine.

23. Effective Date and Term of Plan

     The Plan shall be subject to the requisite approval of the shareholders of the Company. In the
absence of such approval, any Awards shall be null and void. Unless earlier terminated by the
Board of Directors, the right to grant Awards under the Plan shall terminate on December 31, 2013.
Awards outstanding at Plan termination shall remain in effect according to their terms and the
provisions of the Plan.

24. Applicable Law

     Except to the extent preempted by any applicable federal law, the Plan shall be construed and
administered in accordance with the laws of the State of New York without reference to its
principles of conflicts of law.

25. Participant Rights

     No Participant shall have any claim to be granted any award under the Plan, and there is no
obligation for uniformity of treatment for Participants. Except as provided specifically herein, a
Participant or a transferee of an Award (including a transferee of a Nonemployee Director) shall
have no rights as a shareholder with respect to any shares covered by any Award until the date of
the issuance of a Company Stock certificate to him or her for such shares.

26. Unfunded Status of Awards

     The Plan is intended to constitute an “unfunded” plan for incentive and deferred compensation.
With respect to any payments not yet made to a Participant pursuant to an Award, nothing contained
in the Plan or any Agreement shall give any such Participant any rights that are greater than those
of a general creditor of the Company.

27. No Fractional Shares

     No fractional shares of Company Stock shall be issued or delivered pursuant to the Plan. The
Committee shall determine whether cash, other Awards, or other property shall be issued or paid in
lieu of such fractional shares or whether such fractional shares or any rights thereto shall be
forfeited or otherwise eliminated.

28. Beneficiary

     A Participant or Nonemployee Director may file with the Committee a written designation of a
beneficiary on such form as may be prescribed by the Committee and may, from time to time, amend or
revoke such designation. If no designated beneficiary survives the Participant or Nonemployee
Director, the executor or administrator of the Participant’s or Nonemployee Director’s estate shall
be deemed to be the grantee’s beneficiary.

29. Interpretation

     The Plan is designed and intended to comply with Rule 16b-3 and, to the extent applicable, with
Sec-

 

 

tions 162(m) and 409A of the Code, and all provisions hereof shall be construed in a manner to
so comply.

30. Severability

     If any provision of the Plan is held to be invalid or unenforceable, the other provisions of the
Plan shall not be affected but shall be applied as if the invalid or unenforceable provision had
not been included in the Plan.

31. Certain Limitations on Vesting of Awards Other than Options and Stock Appreciation
Rights.

     Notwithstanding any provisions of the Plan to the contrary (but subject to the last two
sentences of this Section 31), if the vesting condition for any Award (other than an Option or a
stock appreciation right) made to a Participant who is an employee is based solely upon continued
employment for a period of time, such vesting period shall not be less than 36 months for the
vesting of the entire Award; provided that one third of each such Award may vest on each
anniversary of the date of grant prior to the completion of such 36 month period. If the vesting
condition for any Award (other than an Option or a stock appreciation right) made to a Participant
who is an employee is based upon the attainment of specified performance measures,
such performance vesting period shall not be less than one (1) year. The provisions of this
Section 31 shall not be construed to limit the authority of the Committee to provide for
accelerated vesting upon a Change in Control or upon a termination of a Participant’s employment
and shall not apply to awards granted prior to April 28, 2008. In addition, the Committee may, in
its discretion, grant Awards after April 28, 2008 with respect to not more than 1,000,000 shares of
Company Stock which do not comply with the conditions of this Section 31 (for the avoidance of
doubt it being understood that this Section 31 does not limit or restrict in any way the vesting
conditions that may be applicable to Awards consisting of Options or stock appreciation rights).Exhibit 4.8

     AMENDMENT NUMBER 1 TO LOAN DOCUMENTS

     THIS AMENDMENT NUMBER 1 TO LOAN DOCUMENTS (this “First Amendment”), is entered into as of May
9, 2008, by and between GVECR II 2007 E Trust dated December 17, 2007 (“Lender”), PRIVATE EQUITY
MANAGEMENT GROUP, INC., a Nevada corporation, as the arranger and administrative agent for the
Lenders (in such capacity, “Agent”) under the Credit Agreement (as defined herein) and in its
capacity as a “Security holder” under the Registration Rights Agreement (as defined herein), and
BAKERS FOOTWEAR GROUP, INC., a Missouri corporation (“Borrower”), in its capacities as party to
both the Credit Agreement and the Registration Rights Agreement.

WITNESSETH

     WHEREAS, Borrower, Agent and the Lender are parties to that certain Second Lien Credit
Agreement, dated as of February 1, 2008 (as amended, restated, supplemented, or modified from time
to time, the “Credit Agreement”);

     WHEREAS, Borrower and Agent are parties to that certain Registration Rights Agreement dated as
of February 1, 2008 (as amended, restated, supplemented or modified from time to time, the
“Registration Rights Agreement”);

     WHEREAS, Borrower has informed Agent (a) of Borrower’s financial results for the fourth
quarter of fiscal year 2008, (b) that Borrower’s independent registered public accounting firm’s
report issued in Borrower’s Annual Report on Form 10-K for fiscal year 2008 included an
explanatory paragraph describing the existence of conditions that raise substantial doubt about
Borrower’s ability to continue as a going concern, and (c) that Borrower has provided updated
projection data to Agent (collectively, the “Updating Information”).

     WHEREAS, Borrower wishes to obtain relief from (a) the minimum EBITDA financial covenant for
Borrower’s fiscal quarter ending May 3, 2008 and (b) principal payments on the Term Loan due in
June, July and August, 2008;

     WHEREAS, subject to the satisfaction of the conditions set forth herein, Lender is willing to
grant Borrower the relief requested by Borrower;

     WHEREAS, the Lender Group desires that all future payments on account of the Obligations be
made to Lender’s Deposit Account instead of Agent’s Account;

     NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged., the parties agree to amend the Loan Documents as follows:

1. DEFINITIONS. Capitalized terms used herein and not otherwise defined herein shall have the
meanings ascribed to them in the Credit Agreement, as amended hereby.

2. AMENDMENT TO CREDIT AGREEMENT.

     (a) Section 2.2(c) of the Credit Agreement is amended and restated as follows:

 

 

          “(c) Subject to subsection (b) above and subsection (d) below, the principal of the Term Loan
shall be repaid in installments as follows:

               (A) commencing on March 1, 2008, and continuing on the first day of April and May, 2008,
equal installments of $208,333.33;

               (B) commencing on September 1, 2008, and continuing on the first day of each of the 28
consecutive months thereafter, equal installments of $229,166.66; and

               (C) on the Maturity Date, a final installment in an amount equal to the then unpaid principal
balance of the Term Loan.”

     (b) Section 6.16(b) of the Credit Agreement is amended and restated as follows:

          “(b) Minimum EBITDA. Fail to achieve EBITDA, measured on a fiscal year to date basis, of not
less than the required amount set forth in the following table for the applicable period set forth
opposite thereto:

	 	 	 	 	 
	Applicable Period	 	Applicable Amount
	February 3, 2008 to May 3, 2008
	 	 	($2,293,572	)
	February 3, 2008 to August 2, 2008
	 	 	($1,058,178	)
	February 3, 2008 to November 1, 2008
	 	 	($3,710,683	)
	February 3, 2008 to January 31, 2009
	 	$	4,305,231	 
	February 1, 2009 to May 2, 2009
	 	 	($1,338,523	)
	February 1, 2009 to August 1, 2009
	 	 	($1,266,327	)
	February 1, 2009 to October 31, 2009
	 	 	($4,134,907	)
	February 1, 2009 to January 30, 2010
	 	$	4,576,432	 
	January 31, 2010 to May 1, 2010
	 	 	($1,462,274	)
	January 31, 2010 to July 31, 2010
	 	 	($1,326,164	)
	January 31, 2010 to October 30, 2010
	 	 	($4,252,196	)

     (c) The Updating Information (or any decline in the market price of Borrower’s Stock
reasonably determined to arise as a result of such information) shall not be deemed to constitute a
Material Adverse Change.

     (d) Section 2.4(a) of the Credit Agreement is deleted and replaced by the following:

          ”(i) Except as otherwise expressly provided herein and subject to the Senior Loan
Subordination Agreement, all payments by Borrower shall be made in Dollars to Lender’s Account for
the account of the Lender Group and shall be made in immediately available funds, no later than
11:00 a.m. (California time) on the date specified herein . Any payment received by

2

 

Lender later than 11:00 a.m. (California time) shall be deemed to have been received on the
following Business Day, and any applicable interest or fee shall continue to accrue until such
following Business Day.”

     (e) Section 2.8 of the Credit Agreement is deleted and replaced by the following:

          “Crediting Payments. The receipt of any payment item by Lender shall not be considered a
payment on account unless such payment item is a wire transfer of immediately available federal
funds made to the Lender’s Account or unless and until such payment item is honored when presented
for payment. Should any payment item not be honored when presented for payment, then Borrower shall be deemed not to have made such payment and interest shall be calculated
accordingly. Anything to the contrary contained herein notwithstanding, any payment item shall be
deemed received by Lender only if it is received into the Lender’s Account on a Business Day on or
before 11:00 a.m. (California time). If any payment item is received into the Lender’s Account on
a non-Business Day or after 11:00 a.m. (California time) on a Business Day, it shall be deemed to
have been received by Lender as of the opening of business on the immediately following Business
Day.”

     (f) Schedule A-2 Lender’s Account shall be inserted after Schedule A-1 and read as set forth
on Exhibit 2(f) attached hereto.

     (g) In Schedule 1.1, the following shall be added:

          “Lender’s Account” means the Deposit Account of Lender identified on Schedule A-2.”

2.A. AMENDMENT TO REGISTRATION RIGHTS AGREEMENT

     The Registration Rights Agreement is amended as follows:

     (a) “Shares” shall be deemed to include the additional 50,000 shares of common stock of
Borrower issued pursuant hereto, so that “Shares” includes both the 350,000 previously issued to
Agent and the additional 50,000 shares issued pursuant to this First Amendment.

     (b) “Filing Date” shall mean “ a date no later than May 12, 2008.”

3. CONDITIONS PRECEDENT TO THIS FIRST AMENDMENT. The satisfaction of each of the following
shall constitute conditions precedent to the effectiveness of this First Amendment and each and
every provision hereof:

     (a) The representations and warranties in the Credit Agreement and the other Loan Documents
shall be true and correct in all material respects on and as of the date hereof, as though made on
such date (except to the extent that such representations and warranties relate solely to an
earlier date);

     (b) No Default or Event of Default shall have occurred and be continuing as of the date
hereof;

3

 

     (c) No injunction, writ, restraining order, or other order of any nature prohibiting, directly
or indirectly, the consummation of the transactions contemplated herein shall have been issued and
remain in force by any Governmental Authority against Borrower, Agent or any Lender;

     (d) Borrower
shall have issued to Agent 50,000 shares of common stock of Borrower, which will
be fully earned and non-refundable as of the date hereof; and

     (c) Borrower shall have executed and delivered this First Amendment to Lender by no later than
May 9, 2008.

4. CONSTRUCTION. THIS FIRST AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF CALIFORNIA APPLICABLE TO CONTRACTS MADE
AND TO BE PERFORMED IN THE STATE OF CALIFORNIA.

5. ENTIRE AMENDMENT; EFFECT OF SECOND AMENDMENT. This First Amendment, and terms and
provisions hereof, constitute the entire agreement among the parties pertaining to the subject
matter hereof and supersedes any and all prior or contemporaneous amendments relating to the
subject matter hereof. Except as expressly set forth in this First Amendment, the Credit Agreement,
the Registration Rights Agreement and the other Loan Documents shall remain unchanged and in full
force and effect. To the extent any terms or provisions of this First Amendment conflict with those
of the Credit Agreement, the Registration Rights Agreement or the other Loan Documents, the terms
and provisions of this First Amendment shall control. This First Amendment is a Loan Document.

6. COUNTERPARTS; TELEFACSIMLE EXECUTION. This First Amendment may be executed in any number of
counterparts, all of which taken together shall constitute one and the same instrument and any of
the parties hereto may execute this First Amendment by signing any such counterpart. Delivery of an
executed counterpart of this First Amendment by telefacsimile shall be equally as effective as
delivery of an original executed counterpart of this First Amendment. Any party delivering an
executed counterpart of this First Amendment by telefacsimile also shall deliver an original
executed counterpart of this First Amendment, but the failure to deliver an original executed
counterpart shall not affect the validity, enforceability, and binding effect of this First
Amendment.

7. MISCELLANEOUS.

     (a) Upon the effectiveness of this First Amendment, each reference in the Credit Agreement to
“this Agreement,” “hereunder,”
“herein,” “hereof” or words of like import referring to the Credit
Agreement shall mean and refer to the Credit Agreement as amended by this First Amendment.

     (b) Upon the effectiveness of this First Amendment, each reference in the Loan Documents to
the “Credit Agreement,” “thereunder,” “therein,” “thereof” or words of like import referring to the
Credit Agreement shall mean and refer to the Credit Agreement as amended by this First Amendment.

4

 

     (c) Upon the effectiveness of this First Amendment, each reference in the Registration Rights
Agreement to “this Agreement,” “hereunder,” “herein,” “hereof” or words of like import referring
to the Registration Rights Agreement shall mean and refer to the Registration Rights Agreement as
amended by this First Amendment.

     (d) Upon the effectiveness of this First Amendment, each reference in the Loan Documents to
the “Registration Rights Agreement.” “thereunder,” “therein,” “thereof” or words of like import
referring to the Registration Rights Agreement shall mean and refer to the Registration Rights
Agreement as amended by this First Amendment.

5

 

 

     IN WITNESS WHEREOF, the parties have caused this First Amendment to be executed and
delivered as of the date first written above.

	 	 	 	 	 
	 	BAKERS FOOTWEAR GROUP, INC.

 	 
	 	By:  	/s/ Peter A. Edison
 	 
	 	 	Title: Chairman, CEO, and President 	 
	 	 	 	 
	 
	 	PRIVATE EQUITY MANAGEMENT

GROUP, INC., as Agent and as Securityholder

 	 
	 	By:  	/s/ Robert J. Anderson
 	 
	 	 	Title: COO 	 
	 	 	 	 
	 	By:  	/s/ Wilbur Quon
 	 
	 	 	Title: CFO 	 
	 	 	 	 
	 
	 	GVECR II 2007 E Trust dated December 17,

2007, as Lender

 	 
	 	By:  	/s/ James D. Daily
 	 
	 	 	Title: Trustee	 
	 	 	 	 
	 
	 	By:  	/s/ William H. Knudson
 	 
	 	 	Title: Trustee	 
	 	 	 	 
	 

6

 

[EXHIBIT 2(f) (Lender’s Account Information) has been omitted.
The Registrants undertakes to furnish supplementally a copy of such exhibit upon request.]

7

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