EXHIBIT 10.3.4
EMPLOYEE NONQUALIFIED STOCK OPTION AGREEMENT
UNDER THE
BUILD-A-BEAR WORKSHOP, INC. 2004 STOCK INCENTIVE PLAN
THIS AGREEMENT, made this _______ day of __________, _____, by
and between Build-A-Bear Workshop, Inc., a Delaware corporation ("Company"), and
____________ ("Optionee"),
WITNESSETH THAT:
WHEREAS, the Board of Directors of the Company ("Board of
Directors") has adopted the Build-A-Bear Workshop, Inc. 2004 Stock Incentive
Plan (the "Plan") pursuant to which options covering an aggregate of 2,700,000
shares of the Common Stock of the Company may be granted to employees and
directors of the Company, a parent or subsidiary, as such terms are defined in
the Plan; and
WHEREAS, Optionee is now an employee of the Company, a parent
or a subsidiary; and
WHEREAS, the Company desires to grant to Optionee certain
nonqualified options to purchase certain shares of its stock under the terms of
the Plan;
NOW, THEREFORE, in consideration of the premises and of the
mutual agreements hereinafter set forth, it is covenanted and agreed as follows:
1. Grant Subject to Plan. This option is granted under
and is expressly subject to all the terms and provisions of the Plan, and the
terms of such Plan are incorporated herein by reference. Optionee hereby
acknowledges receipt of a copy of the Plan and agrees to be bound by all the
terms and provisions thereof. Terms not defined herein shall have the meaning
ascribed thereto in the Plan. The Committee referred to in Section 4 of the Plan
("Committee") has been appointed by the Board of Directors, and designated by
it, as the Committee to make grants of options.
2. Grant and Terms of Option. Pursuant to action of the
Committee, [which action was taken on ____________, _____ ("Date of Grant"),]
[OR] [effective as of the date the Securities and Exchange Commission declares
the Company's registration statement filed with respect to the initial public
offering of the Common Stock effective ("Date of Grant"),]1/ the Company grants
to Optionee the option to purchase all or any part of _____________ (__________)
shares of the Common Stock of the Company, of the par value of $____ per share
("Common Stock"), for a period of ten (10) years from the Date of Grant, at a
purchase price per share equal to the initial price to the public as set forth
in the final prospectus included in the registration statement filed with the
Securities and Exchange Commission for the initial public offering of
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1/ [If this alternative is selected most of Section 4 can be deleted.]
the Common Stock; provided, however, that the right to exercise such option
shall be, and is hereby, restricted as follows:
(a) No shares may be purchased prior to
__________, _____; that at any time during the term of this option on
or after __________, _____, Optionee may purchase up to 25% of the
total number of shares to which this option relates; that at any time
during the term of this option on or after __________, _____, Optionee
may purchase up to an additional 25% of the total number of shares to
which this option relates; that at any time during the term of this
option on or after __________, _____, Optionee may purchase up to an
additional 25% of the total number of shares to which this option
relates; and that at any time on or after __________, _____, Optionee
may purchase up to an additional 25% of the total number of shares to
which this option relates; so that on or after __________, _____,
during the term hereof, Optionee will have become entitled to purchase
the entire number of shares to which this option relates.
(b) Notwithstanding the foregoing, in the event
of a Change of Control Optionee may purchase 100% of the total number
of shares to which this option relates. For purposes of this Agreement,
a Change in Control means:
(1) The purchase or other acquisition
(other than from the Company) by any person, entity or group
of persons, within the meaning of Section 13(d) or 14(d) of
the Securities Exchange Act of 1934, as amended (the "Exchange
Act") (excluding, for this purpose, the Company or its
subsidiaries or any employee benefit plan of the Company or
its subsidiaries), of beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the Exchange Act) of 20% or
more of either the then-outstanding shares of common stock of
the Company or the combined voting power of the Company's
then-outstanding voting securities entitled to vote generally
in the election of directors; or
(2) Individuals who, as of the date
hereof, constitute the Board of Directors of the Company (the
"Board" and, as of the date hereof, the "Incumbent Board")
cease for any reason to constitute at least a majority of the
Board, provided that any person who becomes a director
subsequent to the date hereof whose election, or nomination
for election by the Company's shareholders, was approved by a
vote of at least a majority of the directors then comprising
the Incumbent Board (other than an individual whose initial
assumption of office is in connection with an actual or
threatened election contest relating to the election of
directors of the Company, as such terms are used in Rule
14a-11 of Regulation 14A promulgated under the Exchange Act)
shall be, for purposes of this section, considered as though
such person were a member of the Incumbent Board; or
(3) Approval by the stockholders of the
Company of a reorganization, merger or consolidation, in each
case with respect to which persons who were the stockholders
of the Company immediately prior to such reorganization,
merger or consolidation do not, immediately thereafter, own
more
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than 50% of, respectively, the common stock and the combined
voting power entitled to vote generally in the election of
directors of the reorganized, merged or consolidated
corporation's then-outstanding voting securities, or of a
liquidation or dissolution of the Company or of the sale of
all or substantially all of the assets of the Company.
(c) In no event may this option 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
Optionee, or (iii) in the discretion of the Committee, by a combination
of methods of payment specified in clauses (i) and (ii), all in
accordance with Section 6 of the Plan. Notwithstanding the preceding
sentence, Optionee may request that the Committee agree that payment in
full of the option price need not accompany the written notice of
exercise; provided that, the notice of exercise directs that the
certificate or certificates for the shares of Common Stock for which
the option is exercised be delivered to a licensed broker acceptable to
the Committee as the agent for Optionee and, at the time such
certificate or certificates are delivered, the broker tenders to the
Committee cash (or cash equivalents acceptable to the Committee) equal
to the option price for the shares of Common Stock purchased pursuant
to the exercise of the option plus the amount (if any) of any
withholding obligations on the part of the Company. Such request may be
granted or denied in the sole discretion of the Committee.
(e) No shares of Common Stock may be tendered in
exercise of this option if such shares were acquired by Optionee
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 Optionee for at least one
year, and (ii) at least two years have elapsed since such Incentive
Stock Option was granted.
(f) The Optionee shall not participate in or be
a party to the Stockholders' Agreement.
3. Anti-Dilution Provisions. In the event that, during
the term of this Agreement, there is any change in the number of shares of
outstanding Common Stock of the Company by reason of stock dividends,
recapitalizations, mergers, consolidations, split-ups, combinations or exchanges
of shares and the like, the number of shares covered by this option agreement
and the price thereof shall be adjusted, to the same proportionate number of
shares and price as in this original agreement.
4. Investment Purpose and Other Restrictions on
Transfer. Optionee represents that, in the event of the exercise by Optionee of
the option hereby granted, or any part thereof, he or she intends to purchase
the shares acquired on such exercise for investment and not with a view to
resale or other distribution; except that the Company, at its election, may
waive or release this condition in the event the shares acquired on exercise of
the option are registered
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under the Securities Act of 1933, or upon the happening of any other contingency
which the Company shall determine warrants the waiver or release of this
condition. Optionee agrees that the certificates evidencing the shares acquired
by him or her on exercise of all or any part of this option, may bear a
restrictive legend, if appropriate, indicating that the shares have not been
registered under said Act and are subject to restrictions on the transfer
thereof, which legend may be in the following form (or such other form as the
Company shall determine to be proper), to-wit:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933, but have been
issued or transferred to the registered owner pursuant to the
exemption afforded by Section 4(2) of said Act. No transfer or
assignment of these shares by the registered owner shall be
valid or effective, and the issuer of these shares shall not
be required to give any effect to any transfer or attempted
transfer of these shares, including without limitation, a
transfer by operation of law, unless (a) the issuer shall have
received an opinion of its counsel that the shares may be
transferred without requirement of registration under said
Act, or (b) there shall have been delivered to the issuer a
'no-action' letter from the staff of the Securities and
Exchange Commission, or (c) the shares are registered under
said Act."
In addition to the restrictions described above, Optionee may
not sell, pledge, transfer, donate, assign or otherwise dispose of
(collectively, "transfer"), whether voluntarily or by operation of law, any
shares of Common Stock acquired pursuant to the exercise of an option under this
Agreement except as provided in this Section 4.
(a) Right of First Refusal.
(1) If the Optionee intends to transfer
any shares of Common Stock pursuant to a bona fide purchase
offer of an offeror ("Offeror"), the Optionee shall deliver to
the Company a written notice (the "Notice") of such intention
to transfer such shares, setting forth in reasonable detail:
(i) the proposed price, (ii) the number of shares proposed to
be transferred, (iii) the other terms and conditions of the
proposed transfer of such shares, (iv) an offer to sell the
shares to the Company as provided herein and (v) the identity
of the Offeror. The shares proposed to be transferred are
hereinafter referred to as the "Offered Shares."
(2) The Company may elect to purchase
all (but not less than all) of the Offered Shares at any time
during the thirty (30) day period following its receipt of the
Notice. The Company shall be entitled to purchase the Offered
Shares from the Optionee at the same price and on the same
terms and conditions as those pursuant to which the Optionee
proposes to transfer the Offered Shares, as described in the
Notice. If the Company fails to respond to such offer within
the 30-day period, it shall be deemed to have rejected the
offer.
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(3) Unless the Optionee and the Company
otherwise agree, the closing of the purchase of the Offered
Shares shall take place at the principal offices of the
Company at 10:00 a.m. on the tenth day (or if such day is not
a business day on the next business day) after the expiration
of the 30-day period. At the closing, the Optionee shall
tender the Offered Shares, together with appropriate
instruments of transfer endorsed to the Company, and the
Company shall tender a certified check, cashier's check or a
wire transfer of immediately available funds in the amount of
the purchase price therefor.
(4) If the Offered Shares are not
purchased by the Company pursuant to this Section 4, the
Optionee shall be entitled to sell all of the Offered Shares
to the Offeror at the price and on the terms and conditions
specified in the Notice, provided that such sale is
consummated within one-hundred twenty (120) days from the date
the Notice is delivered to the Company. For any sale of shares
after such one-hundred twenty (120) day period, the Optionee
shall give a new notice which shall reinstate the rights of
the Company set forth in this Section 4 to purchase the
Offered Shares.
(b) Take-Along Rights. If an offeror desires to
purchase all of the outstanding shares of Common Stock and if the
owners of at least 50% of the outstanding shares desire to make such
sale, the Optionee agrees to sell all of his or her shares to such
offeror on the terms and conditions approved by the owners of at least
50% of the outstanding shares.
(c) Effect of Prohibited Transfer. If any
transfer of shares is made or attempted by an Optionee other than in
accordance with the terms of this Agreement, the Company may refuse for
any purpose to recognize any transferee who receives shares and any
such transferee shall have no right to claim or retain any dividends on
such shares which were paid or become payable subsequent to the date on
which the prohibited transfer was made or attempted. In addition to any
other legal or equitable rights that it may have, the Company may
enforce its rights by specific performance to the extent permitted by
law.
(d) Buy-Back Rights. If the Optionee terminates
employment for any reason, the Optionee must, upon request by the
Committee, sell his or her shares of Common Stock to the Company at a
price equal to the Fair Market Value of such shares of Common Stock on
the date of such sale. The Company shall exercise the buy-back right
with respect to the Optionee no later than twelve (12) months after the
date the Optionee terminates employment.
(e) Exceptions to Transfer Restrictions.
Notwithstanding anything to the contrary in this Agreement, the
restrictions upon transfer set forth in this Section 4 shall not apply
to a transfer of shares of Common Stock by an Optionee to any of (i)
the Optionee's heirs, executors, administrators or other personal
representative upon death of the Optionee or (ii) the Optionee's
spouse, children or grandchildren, or a trust for their or
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the Optionee's benefit; provided that, the restrictions on transfer in
this Section 4 shall continue to apply to the shares received by any
such permitted transferee, including without limitation that such
permitted transferee shall not again transfer such shares except in
accordance with this Section 4.
(f) Termination of Transfer Restrictions. The restrictions
described in Sections 4(a) through 4(e) shall terminate on the earlier
of a Public Offering of shares of Common Stock or mutual agreement of
the parties to this Agreement.
5. Non-Transferability. Neither the option hereby
granted nor any rights thereunder or under this Agreement may be assigned,
transferred or in any manner encumbered except by will or the laws of descent
and distribution, and any attempted assignment, transfer, mortgage, pledge or
encumbrance except as herein authorized, shall be void and of no effect. The
option may be exercised during Optionee's lifetime only by Optionee or his or
her guardian or legal representative.
6. Termination of Employment. In the event of the
termination of employment of Optionee other than by death, the option granted
may no longer be exercised on or after the date of such termination. If the
Optionee's employment is terminated other than for cause, the determination of
which shall be made in the sole discretion of the Committee, the option may be
exercised, to the extent it was eligible for exercise at the date of such
termination of employment, at any time within three (3) months after such
termination, but not after ten (10) years from the Date of Grant.
7. Death of Optionee. In the event of the death of
Optionee during the term of this Agreement and while he or she is employed by
the Company (or its parent or a subsidiary) or within three (3) months after the
termination of his or her employment, this option shall become fully vested (if
not already fully vested) and may be exercised by a legatee or legatees of
Optionee under his or her last will, or by his or her personal representatives
or distributees, at any time within a period of one year after his or her death,
but not after ten (10) years from the Date of Grant, and only if he or she was
entitled to exercise the option at the date of his or her death.
8. Shares Issued on Exercise of Option. It is the
intention of the Company that on any exercise of this option it will transfer to
Optionee shares of its authorized but unissued stock 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.
9. Committee Administration. This option has been
granted pursuant to a determination made by the Committee, and such Committee or
any successor or substitute committee authorized by the Board of Directors or
the Board of Directors itself, subject to the express terms of this option,
shall have plenary authority to interpret any provision of this option and to
make any determinations necessary or advisable for the administration of this
option and the exercise of the rights herein granted, and may waive or amend any
provisions hereof in any manner not adversely affecting the rights granted to
Optionee by the express terms hereof.
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10. Option Not an Incentive Stock Option. It is intended
that this option shall not be treated as an incentive stock option under Section
422 of the Internal Revenue Code of 1986, as amended.
11. No Contract of Employment. Nothing contained in this
Agreement shall be considered or construed as creating a contract of employment
for any specified period of time.
12. Severability. Any word, phrase, clause, sentence or
other provision herein which violates or is prohibited by any applicable law,
court decree or public policy shall be modified as necessary to avoid the
violation or prohibition and so as to make this Agreement enforceable as fully
as possible under applicable law, and if such cannot be so modified, the same
shall be ineffective to the extent of such violation or prohibition without
invalidating or affecting the remaining provisions herein.
13. Non-Waiver of Rights. The Company's failure to
enforce at any time any of the provisions of this agreement or to require at any
time performance by Optionee of any of the provisions hereof shall in no way be
construed to be a waiver of such provisions or to affect either the validity of
this agreement, or any part hereof, or the right of the Company thereafter to
enforce each and every provision in accordance with the terms of this agreement.
14. Entire Agreement; Amendments. No modification,
amendment or waiver of any of the provisions of this agreement shall be
effective unless in writing specifically referring hereto, and signed by the
parties hereto. This agreement supersedes all prior agreements and
understandings between Optionee and the Company to the extent that any such
agreements or understandings conflict with the terms of this agreement.
15. Assignment. This agreement shall be freely assignable
by the Company to and shall inure to the benefit of, and be binding upon, the
Company, its successors and assigns and/or any other entity which shall succeed
to the business presently being conducted by the Company.
16. Choice of Forum and Governing Law. In light of the
Company's substantial contacts with the State of Missouri, the parties'
interests in ensuring that disputes regarding the interpretation, validity and
enforceability of this agreement are resolved on a uniform basis, and the
Company's execution of, and the making of, this agreement in Missouri, the
parties agree that: (i) any litigation, validity and/or enforceability of the
agreement, shall be filed and conducted exclusively in the state or federal
courts in St. Louis County, Missouri; and (ii) the agreement shall be
interpreted in accordance with and governed by the laws of the State of
Delaware, without regard for any conflict of law principles.
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IN WITNESS WHEREOF, the Company has caused this Agreement to
be executed on its behalf by the undersigned officer pursuant to due
authorization, and Optionee has signed this Agreement to evidence his or her
acceptance of the option herein granted and of the terms hereof, all as of the
date hereof.
BUILD-A-BEAR WORKSHOP, INC.
By
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ATTEST:
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Secretary
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Optionee
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