FIRST AMENDMENT TO EMPLOYMENT, CONFIDENTIALITY AND NONCOMPETE AGREEMENT
EXHIBIT 10.5.1
FIRST AMENDMENT TO EMPLOYMENT, CONFIDENTIALITY AND
NONCOMPETE AGREEMENT
NONCOMPETE AGREEMENT
This First Amendment (the “Amendment”) to the Employment, Confidentiality and Non-compete
Agreement dated the 13th day of April, 2004 (the “Agreement”) is made effective as of
February 24, 2006, between BUILD-A-BEAR WORKSHOP, INC. (“Company”) and XXXXX XXXXX (“Employee” or
“Xx. Xxxxx”).
Recital
Company and Employee previously entered into the Agreement whereby Company hired Employee to
provide various services to Company under the title of President and Chief Operating Officer Bear.
Company and Employee now mutually desire to amend the Agreement pursuant to the terms of this
Amendment.
NOW, THEREFORE, in consideration of the premises and agreements hereinafter set forth, and
other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
| 1. | Section 3(b) of the Agreement is hereby amended as follows: |
Bonus. Should Company exceed its sales, profits, and other objectives for any fiscal
year, Employee shall be eligible to receive a bonus for such fiscal year in the amount
as determined by the Compensation Committee of the Board of Directors, provided however
the potential bonus opportunity for Employee in any given fiscal year will be set by
the Compensation Committee such that, if the Company exceeds its objectives, the
Company will pay Employee an amount no less than sixty percent (60%) of the Employee’s
base salary for such fiscal year. Any bonus payable to Employee will be payable in
cash, stock or stock options, or any combination thereof, and unless a different payout
schedule is applicable for all executive employees of the Company, any such bonus
payments will be payable in a single, lump sum payment. In the event of termination of
this Agreement because of Employee’s death or disability (as defined by Section
4.1(b)), termination by the Company without cause pursuant to Section 4.1(c), or
pursuant to Employee’s right to terminate this Agreement for Good Reason under Section
4.1(d), the bonus criteria shall not change and any bonus shall be pro-rated based on
the number of full calendar weeks during the applicable fiscal year which Employee was
employed hereunder.
Such bonus, if any, shall be payable after Company’s accountants have finally
determined the sales and profits and have issued their audit report with respect
thereto for the applicable fiscal year, which determination shall be binding on the
parties. Any such bonus shall be paid within seventy-five (75) days after the end of
each calendar year or thirty (30) days after the issuance of the
auditor’s report, whichever is later, regardless of Employee’s employment status at the
time payment is due. If timely payment is not made, the Company
EXHIBIT 10.5.1
shall indemnify the
Employee against any additional tax liability that the Employee may incur proximately
as a result of the payment being made after the seventy-five day period.
| 2. | Section 3(g) of the Agreement is hereby amended as follows: |
Other. Employee shall be eligible for such other perquisites as may from time to time
be awarded to Employee by Company payable at such times and in such amounts as Company,
in its sole discretion, may determine. All such compensation shall be subject to
customary withholding taxes and other employment taxes as required with respect
thereto. Employee shall also qualify for all rights and benefits for which Employee
may be eligible under any benefit plans including group life, medical, health, dental
and/or disability insurance or other benefits (“Welfare Benefits”) which are provided
for employees generally at his then current location of employment. Employee may, in
his sole discretion, decline any perquisite, proposed annual salary increase, or bonus
payment, provided such decision is communicated to the Company in writing.
| 3. | Section 4.1(b) of the Agreement is hereby amended as follows: |
(b) By the Company, upon thirty (30) day’s prior written notice to Employee in the
event Employee, by reason of permanent physical or mental disability (which shall be
determined by a physician selected by Company or its insurers and acceptable to
Employee or Employee’s legal representative (such agreement as to acceptability not to
be withheld unreasonably)), shall be unable to perform the essential functions of his
position, with or without reasonable accommodation, for six (6) consecutive months;
provided, however, Employee shall not be terminated due to permanent physical or mental
disability unless or until said disability also entitles Employee to benefits under
such disability insurance policy as is provided to Employee by Company.
| 4. | Section 4.1(c) of the Agreement is hereby amended as follows: |
(c) By the Company with or without Cause. For the purposes of this Agreement, “Cause”
shall mean: (i) Employee’s engagement in any conduct which, in Company’s reasonable
determination, constitutes gross misconduct, or is illegal, unethical or improper
provided such conduct brings detrimental notoriety or material harm to Company; (ii)
gross negligence or willful misconduct; (iii) conviction of fraud or theft; (v) a
material breach of a material provision of this Agreement by Employee, or (v) failure
of Employee to follow a written directive of the Chief Executive Bear or the Board of
Directors within thirty (30) days after receiving such notice, provided that such
directive is reasonable in scope or is otherwise within the Chief Executive Bear’s or
the Board’s reasonable business judgment, and is reasonably within Employee’s control;
provided Employee does not cure said conduct or breach
EXHIBIT 10.5.1
(to the extent curable) within
30 days after the Chief Executive Bear or the Board of Directors provides Employee with
written notice of said conduct or breach. In the event of termination for cause, the
Employee will afforded an opportunity prior to the actual date of termination to
discuss the matter with the Company.
| 5. | Section 4.2(b) of the Agreement is hereby amended as follows: |
(b) Severance. In the event (i) the Company terminates Employee’s employment during
the Employment Period without cause pursuant to Section 4.1 (c) or (ii) the Employee
terminates his employment for Good Reason pursuant to Section 4.1(d), the Company shall
continue his base salary for a period of twelve (12) months from termination (unless
such termination occurs within the first twelve (12) months following the date of this
Agreement, in which event such base salary shall be continued for twenty-four (24)
months), such payments to be reduced by the amount of any cash compensation from a
subsequent employer during such period. The Company shall also continue Employee’s
Welfare Benefits for such period to the extent permitted by the Company’s Welfare
Benefit Plans. Employee shall accept these payments in full discharge of all
obligations of any kind which Company has to him except obligations, if any, (i) for
post-employment benefits expressly provided under this Agreement and/or at law, (ii) to
repurchase any capital stock of Company owned by Employee; or (iii) for indemnification
under separate agreement by virtue of Employee’s status as a director/officer of the
Company. Employee shall also be eligible to receive a bonus with respect to the year
of termination as provided in Section 3(b).
| 6. | A new Section 20 is hereby inserted into the Agreement as follows: |
Board Seat. Employee is currently a Class III member of the Company’s Board of
Directors. Management of the Company will propose to the Nominating and Corporate
Governance Committee (or other successor committee) that Employee be nominated by the
Board of Directors for re-election to the Board, and Employee agrees to continue to
serve so long as Employee is re-elected by the shareholders, provided however should
Employee’s employment terminate at any time for any reason (or no reason), Employee
will voluntarily and promptly resign from the Board of Directors, unless the Company
requests that the Employee remain on the Board through the end of his current term, and
for any such terms that the shareholders may elect Employee following such termination.
Employee’s execution of this Amendment shall be deemed to serve as his written
resignation as a Director should his employment terminate
for any other reason, unless the Company has requested in writing that Employee
continue as a Director.
| 7. | Except to the extent expressly provided herein, the Agreement remains in full force and effect, in accordance with its terms. |
EXHIBIT 10.5.1
IN WITNESS WHEREOF, the parties have executed this First Amendment effective as of the date
indicated above.
| XXXXX XXXXX | BUILD-A-BEAR WORKSHOP, INC. | |||||
By:
|
/s/ Xxxxx Xxxxx | By: | /s/ Xxxxxx Xxxxx | |||
| Xxxxx Xxxxx | Xxxxxx Xxxxx | |||||
| Chief Executive Bear | ||||||
