UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 8-K

 

CURRENT REPORT PURSUANT

TO SECTION 13 OR 15 (d) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

Date of report (Date of earliest event

reported) May 8, 2014

 

 

   Build-A-Bear Workshop, Inc.    
(Exact Name of Registrant as Specified in Its Charter)

 

     Delaware       

     001-32320       

     43-1883836       

(State or Other

Jurisdiction of

Incorporation)

(Commission

File Number)

(IRS Employer

Identification No.)

 

 

  

1954 Innerbelt Business Center Drive
St. Louis, Missouri

  

63114

  

 

(Address of Principal Executive Offices)

  

(Zip Code)

  

 

         (314) 423-8000       
(Registrant’s Telephone Number, Including Area Code)

   

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2. below):

 

☐     Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐     Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐     Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐     Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 
 
 

 

Item 5.02.

Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

 

    (d)     On May 8, 2014, Mr. Michael Shaffer was elected to the board of directors (the “Board”) of Build-A-Bear Workshop, Inc. (the “Company”) by the Board. Mr. Shaffer will serve as a Class II director and his term will expire at the 2015 annual meeting of stockholders of the Company.

 

     There is no arrangement or understanding between Mr. Shaffer and any other person pursuant to which Mr. Shaffer was elected as a director. Mr. Shaffer was determined to be independent by the Board and will serve as Chairman of the Board’s Audit Committee and a member of the Board’s Nominating and Corporate Governance Committee.

 

     In addition, in connection with his election to the Board and in accordance with the Company’s non-employee director compensation policies, the Compensation and Development Committee (the “Compensation Committee”) approved an award to Mr. Shaffer of 5,495 shares of restricted stock under the Company's Third Amended and Restated 2004 Stock Incentive Plan. Pursuant to his restricted stock award agreement, the shares will vest May 8, 2015, subject to Mr. Shaffer’s continued service on the Company’s Board. Mr. Shaffer’s ongoing annual compensation will be consistent with that provided to the Company’s other non-employee directors, as described in the Company’s most recent proxy statement filed with the Securities and Exchange Commission (the “SEC”).

 

     The Company is not aware of any transactions, proposed transactions, or series of either to which the Company or any of its subsidiaries was or is to be a party, in which the amount involved exceeds $120,000 and in which Mr. Shaffer had, or will have, a direct or indirect material interest.

 

     On May 12, 2014, the Company issued a press release announcing the election of Mr. Shaffer to the Board, a copy of which is filed as Exhibit 99.1 to this Current Report on Form 8-K

 

     (e)      On March 18, 2014, the Board adopted, subject to stockholder approval, certain amendments to the Build-A-Bear Workshop, Inc. Second Amended and Restated 2004 Stock Incentive Plan restated in the Third Amended and Restated 2004 Stock Incentive Plan (the “Amended Incentive Plan”). On May 8, 2014, at the Company’s 2014 Annual Meeting of Stockholders (the “Annual Meeting”), the Company’s stockholders approved the Amended Incentive Plan. The Amended Incentive Plan, which is administered by the Compensation Committee, permits the grant of stock options (including both incentive and non-qualified stock options), stock appreciation rights, restricted stock, cash or stock and other stock-based awards, some of which may be performance-based pursuant to the terms of the Amended Incentive Plan. The Board may amend, modify or terminate the Amended Incentive Plan at any time, except as provided in the Amended Incentive Plan. The Amended Incentive Plan will terminate on March 18, 2024, unless earlier terminated by the Board.

 

Among other things, the amendments:

 

 

●

Provide that the number of shares authorized for issuance under the Amended Incentive Plan as of December 29, 2013 is 1,475,000, subject to adjustments as described in the Amended Incentive Plan and below;

 

 
2
 

   

 

●

amend the share counting method with respect to awards issued under the Amended Incentive Plan;

 

 

●

implement changes required to comply with Section 162(m) of the Internal Revenue Code of 1986, as amended;

 

 

●

clarify the method by which exercise prices of options and SARs may be paid;

 

 

●

specify the methods by which the payment of required federal, state and local taxes with respect to awards may be satisfied;

 

 

●

revise the performance measures upon which performance-based awards may be conditioned; and

 

 

●

make certain other ministerial changes.

 

Under the Amended Incentive Plan, a recipient of restricted stock or non-qualified stock options, or both, will enter into a Restricted Stock & Non-Qualified Stock Option Agreement (the “Award Agreement”) which sets forth terms applicable to awards in addition to those terms contained in the Amended Incentive Plan. With respect to restricted stock, the Award Agreement provides for the following, among other things:

 

 

●

The restricted stock award vests in three equal annual installments, beginning on the first anniversary of the grant date, as long as the recipient is still an employee of the Company on the respective annual grant date anniversary;

 

 

●

In the event of the death or disability of the recipient or a change of control, the restricted stock award shall fully vest; and

 

 

●

Recipients are entitled to all rights of a stockholder with respect to the shares of restricted stock as of the grant date, including the right to vote and receive dividends.

 

With respect to non-qualified stock options, the Award Agreement provides for the following, among other things:

 

 

●

The options vest in three equal annual installments, beginning on the first anniversary of the grant date;

 

 

●

The options expire 10 years from the date of grant;

 

 

●

In the event of a change of control, all unvested stock options shall become exercisable;

 

 

●

In the event of termination of the recipient’s employment for a reason other than cause, the options, if exercisable on the termination date, shall be exercisable for up to 90 days after the termination date and may be exercised for a longer period, as the Compensation Committee may permit in its sole discretion, but not after 10 years from the date of grant;

 

 

●

In the event of the death of the recipient while he or she is employed by the Company, or within three months after the termination of his or her employment for a reason other than cause, the options shall become fully vested and may be exercised by the recipient’s representatives at any time within one year after his or her death, but not after 10 years from the date of grant; and

 

 
3
 

 

 

●

In the event of the recipient’s disability, the options shall become fully vested and may be exercised by the recipient at any time within three months after his or her employment is terminated, but not after 10 years from the date of grant.

 

The foregoing summaries of the Amended Incentive Plan and the Award Agreement are qualified in their entirety by reference to the full text of such documents, copies of which are included as Exhibits 10.1 and 10.2, respectively, to this Current Report on Form 8-K and incorporated herein by reference. A more detailed summary of the Amended Incentive Plan can be found in the Company’s Proxy Statement for the Annual Meeting filed with the SEC on April 4, 2014.

 

 

Item 5.07

Submission of Matters to a Vote of Security Holders.

 

The Company held its Annual Meeting on May 8, 2014. The following proposals were submitted by the Board to a vote of the Company’s stockholders and the final results of the voting on each proposal are noted below.

 

Proposal 1.     Election of Directors

 

The following two directors were nominated to serve for three-year terms expiring at the 2017 annual meeting of stockholders or until their successors are duly elected and qualified. The two directors, as indicated below, were elected as directors of the Company.

 

Nominee

For

Withheld

Broker Non-Votes

Maxine Clark

10,552,708

2,135,022

2,941,435

Sharon John

12,350,280

337,450

2,941,435

 

 

Proposal 2.     Ratification of Appointment of Independent Accountants

 

The stockholders were asked to ratify the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for the fiscal year ending January 3, 2015. The appointment was approved by the requisite vote of a majority of the shares represented in person or by proxy and entitled to vote, as indicated below.

 

For

Against

Abstain

Broker Non-Votes

15,144,252

337,562

147,351

—

 

 
4
 

 

 

Proposal 3.     Advisory Vote Approving Executive Compensation

 

The stockholders were asked to approve the executive compensation as disclosed in the Compensation Discussion and Analysis included in the Company’s Proxy Statement pursuant to the compensation disclosure rules of the SEC. The proposal was approved by the requisite vote of a majority of the shares represented in person or by proxy and entitled to vote, as indicated below.

 

For

Against

Abstain

Broker Non-Votes

11,502,627

925,605

259,498

2,941,435

 

 

Proposal 4.     Approval of the Company’s Third Amended and Restated 2004 Stock Incentive Plan

 

The stockholders were asked to approve the Build-a-Bear Workshop, Inc. Third Amended and Restated 2004 Stock Incentive Plan. The proposal was approved by the requisite vote of a majority of the shares represented in person or by proxy and entitled to vote, as indicated below.

 

For

Against

Abstain

Broker Non-Votes

11,417,790

1,167,785

102,155

2,941,435

 

 

 

 

Item 9.01           Financial Statements and Exhibits .

 

(d)      Exhibits

 

Exhibit Number  

Description of Exhibit

   

10.1

Third Amended and Restated Build-A-Bear Workshop, Inc. 2004 Stock Incentive Plan

10.2

Form of Restricted Stock and Non-Qualified Stock Option Grant Agreement under the Build-A-Bear Workshop, Inc. 2004 Stock Incentive Plan

99.1

Press release dated as of May 12, 2014

 

 
5
 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

     

BUILD-A-BEAR WORKSHOP, INC.   

   

  

 
   

  

 

Date:

May 12, 2014

By:

/s/ Tina Klocke

 

  

 

Name:

Tina Klocke

     

Title:

Chief Operations and Financial

       

Bear and Treasurer

 

6

Exhibit 10.1

 

BUILD-A-BEAR WORKSHOP, INC.
THIRD AMENDED AND RESTATED

2004 STOCK INCENTIVE PLAN
as amended and restated effective March 18 , 2014

 

 

 
 
 

 

BUILD-A-BEAR WORKSHOP, INC.
THIRD AMENDED AND RESTATED

2004 STOCK INCENTIVE PLAN

 

Table of Contents

 

 

      Page
       

1.

Purpose of the Plan

1

   

 

2.

Definitions

1

 

A.

“Act”

1

 

B.

“Award”

1

 

C.

“Award Agreement”

1

 

D.

“Board”

1

 

E.

“Cash-Based Award”

2

 

F.

“Change in Control”

2

 

G.

“Code”

2

 

H.

“Committee”

2

 

I.

“Company”

2

 

J.

“Employer”

2

 

K.

“Fair Market Value”

2

 

L.

“Incentive Stock Option”

3

 

M.

“Non-qualified Stock Option”

3

 

N.

“Officer”

3

 

O.

“Option”

3

 

P.

“Other Stock-Based Award”

3

 

Q.

“Parent”

3

 

R.

“Participant”

3

 

S.

“Performance-Based Award”

3

 

T.

“Plan”

3

  U. “Statutory Option Stock” 3
  V. “Stock” 3
 

W.

“Stock Appreciation Right”

3

 

X.

“Subsidiary”

4

 

Y.

“Trading Date”

4

   

3.

Stock Subject to the Plan

4

   

4.

Administration

4

   

5.

[Reserved.]

5

   

6.

Options

5

 

A.

Type of Option

5

 

B.

Option Prices

5

 

C.

Exercise - Elections and Restrictions

5

 

D.

Option Terms

6


 
i 
 

   

 

E.

Successive Option Grants

6

 

F.

Additional Incentive Stock Option Requirements

6

 

G.

Deferral of Gain on a Non-qualified Stock Option

7

     

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

10

     

11.

Tax Withholding

10

     

12.

Adjustments Upon Changes in Capitalization or Corporation Acquisitions

11

     

13.

Amendment and Termination

11

     

14.

Effectiveness of the Plan

12

     

15.

Time of Granting of an Award

12

     

16.

Term of Plan

12

     

17.

Severability

12

     

18.

Non-Waiver of Rights

13

     

19.

Assignment

13

     

20.

No Right To Continued Employment or Other Status

13

     

21.

Choice of Law

13

     

22.

Awards to Employees of Non-United States Subsidiaries

13

     

23.

Section 409A.

14

 

 
ii 
 

 

BUILD-A-BEAR WORKSHOP, INC.
THIRD AMENDED AND RESTATED

2004 STOCK INCENTIVE PLAN

 

WHEREAS, the Company previously adopted the Build-A-Bear Workshop, Inc. 2004 Stock Incentive Plan and subsequently amended and restated the Plan, effective July 26, 2006 and effective March 17, 2009 (the “Plan”); and

 

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

 

WHEREAS, the Board deems it advisable to amend the Plan in certain respects and to completely restate the Plan effective March 18, 2014;

 

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

 

1.

Purpose of the Plan .

 

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

 

2.

Definitions .

   

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

 

 

A.

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

 

 

B.

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

 

 

C.

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

 

 

D.

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

 

 
 
 

   

 

E.

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

 

 

F.

“Change in Control” means (i) the purchase or other acquisition (other than from the Company) by any person, entity or group of persons, within the meaning of Section 13(d) or 14(d) of the Act (excluding, for this purpose, the Company or its subsidiaries or any employee benefit plan of the Company or its subsidiaries), of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Act) of 20% or more of either the then-outstanding shares of common stock of the Company or the combined voting power of the Company’s then-outstanding voting securities entitled to vote generally in the election of directors; or (ii) individuals who, as of the date hereof, constitute the Board (and, as of the date hereof, the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board, provided that any person who becomes a director subsequent to the date hereof whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be, for purposes of this Section, considered as though such person were a member of the Incumbent Board; (iii) a reorganization, merger or consolidation involving the Company, 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 (iv) a liquidation or dissolution of the Company, or 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 Compensation and Development Committee of the Board of Directors, or any committee appointed by the Board of Directors in accordance with the Company's Bylaws from among its members for the purpose of administering the Plan. Members of the Committee shall be “Non-Employee Directors” within the meaning of Rule 16b-3 under the Act, and “Outside Directors” as defined in Code Section 162(m) and any guidance issued thereunder.

 

 

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 the Stock is listed on any established stock exchange its Fair Market Value shall be the closing sales price for such stock on such exchange for the Trading Day applicable to the date of determination, as reported in The Wall Street Journal or such other source as the Board deems reliable; or (ii) in the absence of an established market for the Stock, the Fair Market Value thereof shall be determined in good faith by the Board.

 

 
2
 

   

   

For these purposes, the determination date shall mean for employees receiving an Award in connection with an initial hire or a promotion within the Company, the determination date shall mean the Trading Date which is the first date of hire or promotion. For all other Awards, the determination date shall mean the Trading Date on which the Committee (or its delegate) approves the Award.

 

 

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.

“Officer” means an officer of the Company as defined in Rule 16a-1(f) of the Act.

 

 

O.

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

 

 

P.

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

 

 

Q.

“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.

 

 

R.

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

 

 

S.

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

 

 

T.

“Plan” means the Third Amended and Restated Build-A-Bear Workshop, Inc. 2004 Stock Incentive Plan.

 

 

U.

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

 

 

V.

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

   

 

W.

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

 

 
3
 

   

 

X.

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

 

 

Y.

“Trading Date” means a day on which national stock exchanges and the Nasdaq System are open for trading.

 

3.

Stock Subject to the Plan .

 

The number of shares of Stock allocated to the Plan and reserved to satisfy Awards under the Plan as of December 29, 2013 (the “Share Reserve”) shall be an aggregate of One Million Four Hundred Seventy Five Thousand (1,475,000) shares of Stock in addition to shares of Stock subject to awards outstanding under (i) this Plan; and (ii) the Build-A-Bear Workshop, Inc. 2002 Stock Incentive Plan that may lapse, terminate, be forfeited or otherwise expire. Awards shall be counted against this limit as one (1) share of Stock for every one (1) share of Stock subject to the Awards.

 

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.

 

Shares of Stock subject to an Award that is forfeited, expires or is settled for cash (in whole or in part) shall, to the extent of such forfeiture, expiration or cash settlement, be added to the shares of Stock available for Awards under the Plan. Notwithstanding anything to the contrary herein, the following shares of Stock shall not be added to the shares authorized for issuance under this Section 3: (i) shares of Stock tendered by the Participant in payment of the purchase price of an Option; (ii) shares of Stock tendered by the Participant or withheld by the Company to satisfy any tax withholding obligation with respect to Options or Stock Appreciation Rights; (iii) shares of Stock subject to a Stock Appreciation Right that are not issued in connection with its share settlement on exercise thereof; and (iv) shares of Stock reacquired by the Company on the open market or otherwise using cash proceeds from the exercise of Options.

 

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.

 

 
4
 

 

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; provided, however, that no Award granted hereunder may be repriced without approval by the stockholders of the Company. The Committee’s determinations on the matters referred to in this Section 4 shall be conclusive, subject to the restrictions noted herein.

 

The Committee may, to the extent permitted by law, delegate its responsibilities and authority hereunder to an executive officer of the Company. Notwithstanding anything herein to the contrary, Chief Executive Officer and Chief President Bear, Chief Operations Bear, and Chief Human Resources Bear are specifically designated under the Plan to have plenary authority, in their discretion, as applicable, to also determine individuals, other than themselves or other Officers, to whom, and the time or times at which, Awards shall be granted and the number of shares, if applicable, subject to such Award.

 

5.

[Reserved.] .

   

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 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.

 

 

C.

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

 

 
5
 

 

   

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 having a Fair Market Value equal to the cash exercise price of the Option being exercised, (iii) in the discretion of the Committee, by withholding shares of Stock otherwise issuable pursuant to the Option having a Fair Market Value equal to the cash exercise price of the Option being exercised, (iv) in the discretion of the Committee, by any other means allowable pursuant to applicable law, or (v) in the discretion of the Committee, by any combination of the payment methods specified in clauses (i), (ii), (iii)  and (iv) hereof; provided that, no shares of Statutory Option Stock may be tendered in exercise of an Incentive Stock Option unless (a) such shares have been held by the Participant for at least one year and (b) at least two years have elapsed since such Statutory Option Stock was granted. 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, subject to the provisions of this Plan.

 

 

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. To the extent Options are subject to restrictions, Options shall vest in whole shares only, and the holder of an Option shall not be deemed vested in any fractional share regardless of anything to the contrary in any Award Agreement. The holder of an Option shall have none of the rights of a stockholder with respect to the shares subject to Option until such shares shall be issued to him or her upon the exercise of his or her Option.

 

E.

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

 

F.

Additional Incentive Stock Option Requirements .

 

 

(1)

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

 

 
6
 

 

 

(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 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 as approved by the Committee after such termination, or for such longer period as the Committee may permit in its sole and absolute discretion, 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), or within three (3) months after the termination of his or her employment other than for cause, 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 (1) year after his or her death, but not after ten (10) years from the date of grant as specified in the Award Agreement; provided, however, that if such Option is subject to vesting conditions other than the passage of time, the provisions of this paragraph shall apply only if such other vesting conditions have been satisfied as of the date of the Participant’s death. The Committee may, in any Award Agreement, provide additional provisions for the exercise of an Option after the death of a Participant.

 

 

G.

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

 

 
7
 

 

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 granted independent of an Option shall not be less than 100% of the Fair Market Value of the Stock at the time of the granting of the Stock Appreciation Right. 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 of Stock, 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. The term of each Stock Appreciation Right 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

 

 

C.

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

 

8.

Other Stock-Based Awards and Cash-Based Awards .

 

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

 

 
8
 

 

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; operating income before depreciation and amortization; return on stockholders’ equity; 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; earnings before interest, taxes, depreciation and amortization; earnings before extraordinary or special items; earnings before income taxes and any provision for Performance-Based Awards or other cash bonuses; gross revenues or revenue growth; sales; market share; expense management; improvements in capital structure; profit margins; Stock price; total stockholder return; cash flow; cash flow from operations; free cash flow; net cash provided by operations; cash flow in excess of cost of capital; average cash balance; net cash; cash position; interest expense after taxes; working capital; economic value added/economic profit; gross or net operating margins; gross or net profits; operational performance measures; strategic business criteria consisting of one or more objectives based on meeting specified development, strategic partnering, licensing, market penetration, geographic business expansion goals, cost targets, customer satisfaction, employee satisfaction, management of employment practices and employee benefits, supervision of litigation and information technology, and goals relating to acquisitions or divestitures of subsidiaries, joint ventures or affiliates. To the extent consistent with Code Section 162(m), the Committee (i) may appropriately adjust any measurement of performance under a performance measure to eliminate the effects of charges for restructurings, discontinued operations, unusual or nonrecurring or extraordinary items and all items of gain, loss or expense determined to be extraordinary or unusual in nature or related to the disposal of a segment of a business or related to a change in accounting principle all as determined in accordance with accounting principles generally accepted in the United States, as well as the cumulative effect of accounting changes, in each case as determined in accordance with accounting principles generally accepted in the United States or identified in the Company's financial statements or notes to the financial statements, and (ii) may appropriately adjust any measurement of performance under a performance measure to exclude the effects of any of the following events that occurs during a performance period: (A) asset write-downs; (B) litigation, claims, judgments or settlements; (C) changes in tax law or other such laws or provisions affecting reported results; (D) reorganization and restructuring programs; and (E) payments made or due under this Plan or any other compensation arrangement maintained by the Company. The performance measures may relate to the Company, a Parent, a Subsidiary, an Employer or one or more units of such an entity and may be measured annually; at a point in time during a performance period; as an average of values determined at various points of time during a performance period; cumulatively over a period of years; on an absolute basis; relative to a pre-established target, prior period results or designated comparison group; or as a change in values during or between performance periods, in each case as specified by the Committee.

 

 
9
 

 

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, but shall not have the ability to pay a Performance-Based Award greater than such Performance-Based Award achieved based upon applicable performance goals.

 

An Award shall be a Performance-Based Award only if the Committee 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 of 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.

Tax Withholding .

 

The Committee shall have the right to condition the delivery, vesting and retention of Stock, cash or other property under an Award upon full satisfaction by the Participant of all tax withholding requirements with respect to the Award. The Committee will prescribe such rules for the withholding of federal, state and local taxes, including social security and Medicare withholding tax, as it deems necessary. In satisfaction of tax withholding requirements, the Committee may, but need not, hold back shares of Stock from an Award or permit a Participant to tender previously owned shares of Stock (but not in excess of the minimum withholding required by law) or sell any shares of Stock contingently issued or credited by the Company for the purpose of paying such Award or any other Award under this Plan to raise the amount necessary to satisfy applicable withholding requirements.

 

 
10
 

 

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

 

 

(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.

 

 
11
 

 

Without limiting the generality of the foregoing, to the extent applicable, notwithstanding anything herein to the contrary, this Plan and Awards issued hereunder shall be interpreted in accordance with Section 409A of the Code and Department of Treasury regulations and other interpretive guidance issued thereunder, including without limitation any such regulations or other guidance that may be issued after the effective date of this Plan. Notwithstanding any provision of the Plan to the contrary, in the event that the Committee determines that any amounts payable hereunder will be taxable to a Participant under Section 409A of the Code and related Department of Treasury guidance, prior to payment to such Participant of such amount, the Company may (i) adopt such amendments to the Plan and Awards and appropriate policies and procedures, including amendments and policies with retroactive effect, that the Committee determines necessary or appropriate to preserve the intended tax treatment of the benefits provided by the Plan and Awards hereunder and/or (ii) take such other actions as the Committee determines necessary or appropriate to avoid the imposition of and additional tax under Section 409A of the Code.

 

14.

Effectiveness of the Plan .

 

The Plan became effective upon adoption by the Board, subject, however, to its further approval by the stockholders of the Company given within twelve (12) months of the date the Plan is adopted by the Board at a regular meeting of the stockholders or at a special meeting duly called and held for such purpose. Grants of Awards may be made prior to such stockholder approval but all Award grants made prior to stockholder approval shall be subject to the obtaining of such approval and if such approval is not obtained, such Awards shall not be effective for any purpose. This amendment and restatement shall become effective upon adoption by the Board. If any amendment requiring approval of the Company’s stockholders is not approved by the Company’s stockholders, the Second Amended and Restated 2004 Stock Incentive Plan as in effect immediately prior to March 18, 2014 will continue to operate according to its terms.

 

15.

Time of Granting of an Award .

 

An Award grant under the Plan shall be deemed to be made on the date on which the Committee, by formal action of its members duly recorded in the records thereof, makes an Award to a Participant (but in no event prior to the adoption of the Plan by the Board); provided that, such Award is evidenced by a written Award Agreement duly executed on behalf of the Company and on behalf of the Participant, if applicable, within a reasonable time after the date of the Committee action. Notwithstanding the foregoing, an Award granted under the Plan by Chief Executive Bear, Chief Operations Bear, or Chief Human Resources Bear shall be deemed to be the determination date described above in Section 2(K).

 

16.

Term of Plan .

 

This amendment and restatement of the Plan shall terminate ten (10) years after the date on which it was first 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 shall be ineffective to the extent of such violation or prohibition without invalidating or affecting the remaining provisions herein.

 

 
12
 

 

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 or Other Status .

 

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

 

21.

Choice of 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.

 

22.

Awards to Employees of Non-United States Subsidiaries .

 

The terms of an Award granted to an employee of a non-United States subsidiary of the Company shall be governed by the otherwise applicable provisions of the Plan, unless such provisions are modified by sub-plans or special rules adopted by the Committee to modify the terms of the Plan as applied to employees of such non-United States subsidiary who are resident outside the United States. Such sub-plans or special rules shall be designed to achieve desired tax or other objectives in particular jurisdictions outside the United States or achieve other business objectives in the determination of the Committee. The Committee may, in its sole discretion, amend the terms of the Plan or Awards with respect to such Participants in order to conform such terms with the requirements of local law or to obtain more favorable tax or other treatment for a Participant, the Company or a Subsidiary.

 

 
13
 

   

23.

Section 409A .

 

Notwithstanding other provisions of the Plan or any Award Agreements thereunder, no Award shall be granted, deferred, accelerated, extended, paid out or modified under this Plan in a manner that would result in the imposition of an additional tax under Section 409A of the Code upon a Participant. In the event that it is reasonably determined by the Committee that, as a result of Section 409A of the Code, payments in respect of any Award under the Plan may not be made at the time contemplated by the terms of the Plan or the relevant Award Agreement, as the case may be, without causing the Participant holding such Award to be subject to taxation under Section 409A of the Code, the Company will make such payment on the first day that would not result in the Participant incurring any tax liability under Section 409A of the Code; which, if the Participant is a “specified employee” within the meaning of the Section 409A, shall be the first day following the six-month period beginning on the date of Participant’s termination of employment. The Company shall use commercially reasonable efforts to implement the provisions of this Section 23 in good faith; provided that neither the Company, the Committee nor any of the Company’s employees, directors or representatives shall have any liability to Participants with respect to this Section 23.

 

The foregoing Plan, as amended and restated, was approved and adopted by the Board on March 18, 2014.

 

       
       
 

BUILD-A-BEAR WORKSHOP, INC.

       
       
 

By:

/s/ Sharon Price John

 

 

 

14

Exhibit 10.2

 

BUILD-A-BEAR WORKSHOP, INC.

RESTRICTED STOCK &

NON-QUALIFIED STOCK OPTION

AGREEMENT

Date of Grant:

 

Employee:

 

No. of Shares of Restricted Stock:

 

No. of Shares Subject to Option:

 

Exercise Price of Option:

$ 

 

 

This Agreement will certify that the employee named above (“ Employee ”) is awarded the total number of restricted shares of common stock, $0.01 par value per share (the “ Common Stock ”), of Build-A-Bear Workshop, Inc. (the “ Company ”) designated above (the “ Restricted Stock ”), and an option to purchase the number of shares of Company Common Stock designated above (the “ Option ”), pursuant to the Build-A-Bear Workshop, Inc. 2004 Stock Incentive Plan, as amended through the date hereof (the “ Plan ”), as of the date indicated above (the “ Grant Date ”) and subject to the terms, conditions and restrictions in the Plan and those set forth below. Any capitalized, but undefined, term used in this Agreement shall have the meaning ascribed to it in the Plan. Employee’s electronic acceptance within 60 days on his/her personal Merrill Lynch account constitutes Employee’s acceptance of this award and acknowledgement of Employee’s agreement to all the terms, conditions and restrictions contained in the Plan and this Agreement. If the Employee does not accept this award on his/her personal Merrill Lynch account within 60 days of the Date of Grant, the Employer may revoke this grant.

 

 

 

BUILD-A-BEAR WORKSHOP, INC.

         
         
         
 

By:

/s/ Sharon Price John

   
   

Sharon Price John

   
   

Chief Executive Officer

   

 

 

Terms and Conditions

 

A.      Terms and Conditions Applicable to Restricted Stock

 

1.      Terms of Restricted Stock Award . Pursuant to action of the Compensation and Development Committee (the “ Committee ”), the Company awards to the Employee the number of shares of Restricted Stock set forth above. The Restricted Stock is nontransferable by the Employee during the period described below and is subject to the risk of forfeiture as described below. Prior to the time shares become transferable, the shares of Restricted Stock shall bear a legend indicating their nontransferability, and, subject to the terms of this Agreement, if the Employee terminates service as an Employee of the Company prior to the time a restriction lapses, the Employee shall forfeit any shares of Restricted Stock which are still subject to the restrictions at the time of termination of such service.

 

The restrictions on transfer described in this Section A.1 shall lapse and be of no further force and effect as follows, if the Employee is still an employee of the Company on the respective annual anniversary, and has been continuously serving as such an employee of the Company during such 12-month period ending on the annual anniversary:

 

Date

 

Portion of Grant for which Restrictions Lapse on Indicated Date

Grant Date

 

0

1 st Anniversary of Grant Date:

 

One-third

2 nd Anniversary of Grant Date:

 

One-third

3 rd Anniversary of Grant Date:

 

One-third

 

 
 
 

 

For avoidance of doubt, on the date ending thirty-six (36) months after the Grant Date, one hundred percent (100%) of the shares of Restricted Stock shall be transferable by the Employee if the Employee is still an Employee, and has been continuously serving during such thirty-six (36) month period as such an employee of the Company on such date.

 

Notwithstanding the foregoing, in the event of a Change of Control, all previously granted shares of Restricted Stock not yet free of the restrictions of this Section A.1 shall become immediately free of such restrictions.

 

2.       Death or Disability of the Employee . In the event of (i) the death of the Employee, or (ii) the Company terminates the Employee’s employment due to a permanent and total disability which results in the Employee’s inability to return to work, all previously granted shares of Restricted Stock not yet free of the restrictions of Section A.1 shall become immediately free of such restrictions.

 

3.      Cost of Restricted Stock . The purchase price of the shares of Restricted Stock shall be $0.00.

 

4.      Rights as Stockholder . The Employee shall be entitled to all of the rights of a stockholder with respect to the shares of Restricted Stock including the right to vote such shares and to receive dividends and other distributions payable with respect to such shares since the Grant Date .

 

5.      Escrow of Share Certificates . Certificates for the Restricted Stock shall be issued in the Employee’s name and shall be held in escrow by the Company until all restrictions lapse or such shares are forfeited as provide herein. A certificate or certificates representing the Restricted Stock as to which restrictions have lapsed shall be delivered to the Employee upon such lapse .

 

6.      Government Regulations . Notwithstanding anything contained herein to the contrary, the Company’s obligation to issue or deliver certificates evidencing the Restricted Stock shall be subject to all applicable laws, rules and regulations and to such approvals by any governmental agencies or national securities exchanges as may be required.

 

7.      Withholding Taxes . The Company shall have the right to require the Employee to remit to the Company, or to withhold from other amounts payable to the Employee, as compensation or otherwise, an amount sufficient to satisfy all federal, state and local withholding tax requirements.

 

B.      Terms and Conditions Applicable to the Option

 

1.      Grant and Terms of Option . Pursuant to action of the Committee, the Company grants to the Employee the Option to purchase the number of shares of Common Stock set forth above, for a period of ten (10) years from the Grant Date, at the exercise price set forth above; provided, however, that the right to exercise such Option shall be, and is hereby, restricted as follows:

 

(a)(i)     No shares may be purchased prior to the first anniversary of the Grant Date;

 

(ii)     At any time during the term of the Option granted hereby on or after first anniversary of the Grant Date, the Employee may purchase up to one-third of the total number of shares to which the Option granted hereby relates;

 

(iii)     At any time during the term of the Option granted hereby on or after the second anniversary of the Grant Date, the Employee may purchase up to an additional one-third of the total number of shares to which the Option granted hereby relates; and

 

(iv)     At any time during the term of the Option granted hereby on or after the third anniversary of the Grant Date, the Employee may purchase up to an additional one-third of the total number of shares to which the Option granted hereby relates; and

 

so that on or after third anniversary of the Grant Date, during the term hereof, the Employee will have become entitled to purchase the entire number of shares to which the Option granted hereby relates.

 

 
2
 

 

(b)     Notwithstanding the foregoing, in the event of a Change of Control, the Employee may purchase 100% of the total number of shares to which the Option granted hereby relates.

 

(c)     In no event may the Option granted hereby or any part thereof be exercised after the expiration of ten (10) years 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 the Employee, 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 the provisions of the Plan. Notwithstanding the preceding sentence, the Employee 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 the Employee 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 Common Stock may be tendered in exercise of the Option granted hereby if such shares were acquired by the Employee through the exercise of an Incentive Stock Option (within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended), unless (i) such shares have been held by the Employee for at least one year, and (ii) at least two years have elapsed since such Incentive Stock Option was granted.

 

2.      Termination of Employment . In the event of the termination of employment of the Employee for any reason other than for cause, as shall be determined in the sole discretion of the Committee, the Option granted, to the extent it was eligible for exercise at the date of such termination of employment: (i) shall be exercisable for up to ninety (90) days after the date of such termination; and (ii) may, subject to the Committee’s sole discretion and consent, be exercised for such longer period as the Committee may permit, but not after ten (10) years from the Date of Grant.

 

3.      Death or Disability of the Employee . In the event of the death of the Employee during the term of this Agreement and while he or she is employed by the Company (or a subsidiary) or within three (3) months after the termination of his or her employment other than for cause, the Option granted hereby shall become fully vested (if not already fully vested) and may be exercised by a legatee or legatees of the Employee under his or her last will, or by his or her personal representatives or distributees, at any time within a period of one (1) year after his or her death, but not after ten (10) years from the Date of Grant. In the event the Company terminates the Employee’s employment due to a permanent and total disability which results in the Employee’s inability to return to work, the Option granted hereby shall become fully vested (if not already fully vested) and may be exercised by the Employee at any time within a period of three (3) months after his or her employment is so terminated, but not after ten (10) years from the Date of Grant.

 

4.      Shares Issued on Exercise of Option . It is the intention of the Company that on any exercise of the Option granted hereby it will transfer to the Employee shares of its authorized but unissued stock or transfer Treasury shares, or utilize any combination of Treasury shares and authorized but unissued shares, to satisfy its obligations to deliver shares on any exercise hereof.

 

5.      Option Not an Incentive Stock Option . It is intended that the Option granted hereby shall not be treated as an incentive stock option under Section 422 of the Internal Revenue Code of 1986, as amended.

 

 
3
 

 

C.     Terms and Conditions Applicable to All Awards

 

1.      Adjustments Upon Changes in Capitalization or Corporate Acquisitions . Notwithstanding any other provision in the Agreement, if there is any change in the Common Stock by reason of stock dividends, spin-offs, split ups, recapitalizations, mergers, consolidations, reorganizations, combinations or exchanges of shares, the number of shares of Common Stock under this award of Restricted Stock not yet vested, and the price thereof, as applicable, shall be appropriately adjusted by the Committee.

 

2.      No Right to Continued Service . Nothing in this Agreement shall be deemed to create any limitation or restriction on such rights as the Company otherwise would have to terminate the service of the Employee.

 

3.      Committee Administration . This award has been made pursuant to a determination made by the Committee, and the 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 Agreement, shall have plenary authority to interpret any provision of this Agreement and to make any determinations necessary or advisable for the administration of this Agreement and may waive or amend any provisions hereof in any manner not adversely affecting the rights granted to the Employee by the express terms hereof.

 

4.      Grant Subject to Plan . This Restricted Stock and Option award is granted under and is expressly subject to all the terms and provisions of the Plan, and the terms of the Plan are incorporated herein by reference. The Employee hereby acknowledges receipt of a copy of the Plan and agrees to be bound by all the terms and provisions thereof. The Committee has been appointed by the Board of Directors and designated by it, as the Committee to make grants of Restricted Stock.

 

5.      Governing Law . This Agreement shall be construed under the laws of the State of Delaware.

 

 

4 

Exhibit 99.1

 

 

 

Contact:

 

Jill Saunders      

314-423-8000 ext. 5293        

jills@buildabear.com    

 

BUILD-A-BEAR WORKSHOP Inc., Names Michael Shaffer

To Its Board of Directors

 

ST. LOUIS (May 12, 2014) –Build-A-Bear Workshop, Inc. (NYSE: BBW) announced today that Michael Shaffer has been appointed to the Company’s board of directors.

 

Mr. Shaffer, 51, will serve as Chairman of the Audit Committee and a member of the Nominating and Corporate Governance Committee. With Mr. Shaffer’s appointment, the Build-A-Bear Workshop board has eight members, six of whom, including Mr. Shaffer, are deemed independent by the Board under New York Stock Exchange rules and other applicable regulations.

 

As previously announced, Virginia Kent and Louis Mucci did not stand for reelection when their terms expired at the Build-A-Bear Workshop 2014 Annual Meeting of Stockholders.

 

Mr. Shaffer is Executive Vice President and Chief Operating & Financial Officer for New York-based PVH Corp. where he oversees the retail division, treasury, corporate finance, information technology, and logistics services.

 

Mr. Shaffer joined PVH Corp. in 1990 and has held numerous positions in its wholesale and retail divisions, including Director of Accounting Operations, Division Controller, Vice President and Controller, Senior Vice President of Retail Operations, and Executive Vice President of Finance. In 2006, he was named Executive Vice President, Chief Financial Officer before being promoted to his current role.

 

Prior to joining PVH Corp., Mr. Shaffer served as a Senior Auditor at Deloitte & Touche LLP. He has more than 25 years of diverse financial management and executive leadership experience in the apparel and financial industries.

 

“We are very fortunate to have Mike join our Board. Under his leadership, PVH has consistently ranked in the top tier for apparel companies in terms of revenue growth, EPS growth and shareholder return. His expertise is a great addition and complements the strengths of our existing Board,” said Sharon John, chief executive officer of Build-A-Bear Workshop.

 

Mr. Shaffer graduated from George Washington University with a bachelor’s degree in accounting and is a Certified Public Accountant.

 

About Build-A-Bear Workshop, Inc.

Founded in St. Louis in 1997, Build-A-Bear Workshop, Inc. is the only global company that offers an interactive make-your-own stuffed animal retail-entertainment experience. There are approximately 400 Build-A-Bear Workshop stores worldwide, including company-owned stores in the U.S., Puerto Rico, Canada, the United Kingdom and Ireland, and franchise stores in Europe, Asia, Australia, Africa, the Middle East, and Mexico. The company was named to the FORTUNE 100 Best Companies to Work For ®  list for the sixth year in a row in 2014.  Build-A-Bear Workshop (NYSE:BBW) posted total revenue of $379.1 million in fiscal 2013.  For more information, call 888.560.BEAR (2327) or visit the Investor Relations section of its award-winning Web site at buildabear.com ® .

 

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