BUILD-A-BEAR WORKSHOP INC

The objective of the Company’s long-term incentive program is to provide a long-term retention incentive for the NEOs and to align their interests directly with those of our stockholders by way of stock ownership and payouts based on the Company’s financial performance.

In February and March 2025, the Committee reviewed a report of updated market data and industry compensation trends developed by Meridian. The Committee also reviewed the Company’s recent financial and share price performance and the availability of shares to grant under our 2020 Omnibus Incentive Plan.

In June 2025, utilizing this market data and other information, the Committee determined the market value of the proposed total long-term incentive program awards (“LTI Market Value”) for each NEO (except for Mr. Fundler, who joined us in August 2025) and determined the value of the proposed grants of annual long-term incentive awards consisting of three-year performance-based awards and time-based restricted stock for NEOs. The proposed awards for the Chief Executive Officer were split between performance-based restricted stock (70% weighting) and time-based restricted stock (30% weighting). The proposed awards for the other NEOs were split evenly between performance-based restricted stock and time-based restricted stock. The performance-based restricted stock awards will be earned if pre-established revenue goals are attained in fiscal 2025-2027. The Company structured the 2025 long-term incentive awards in the form of restricted stock as a reward and retention mechanism. The design and mix of time- and performance-based awards were structured to maintain a strong emphasis on performance and to align with peer practices. Although long-term incentive program award amounts historically have been approved in April, the Committee postponed approval of the awards in fiscal 2025 until June due to economic uncertainty relating to tariffs.

In June 2025, the Committee approved the following 2025 long-term incentive awards to the NEOs:

*On December 12, 2025, 5,011 of unvested performance-based restricted stock awards and 10,792 of unvested time-based restricted stock awards were forfeited by Mr. Fencl upon his retirement from the Company. Only 1,353 of unvested performance-based restricted stock awards issued in 2025 remained outstanding following Mr. Fencl’s retirement. When Mr. Fundler was appointed Chief Legal Officer and Secretary, effective August 4, 2025, the Committee approved the following 2025 long-term incentive awards:

The target number of shares of three-year performance-based restricted stock awarded to the Chief Executive Officer was derived by dividing 70% of the Chief Executive Officer’s LTI Market Value by the closing sale price of the Company’s common stock on the NYSE on April 15, 2025 and rounding the resulting number to the closest whole number. The target number of shares of three-year performance-based restricted stock awarded to the other NEOs (except for Mr. Fundler) was derived by dividing 50% of his LTI Market Value by the closing sale price of the Company’s common stock on the NYSE on April 15, 2025 and rounding the resulting number to the closest whole number.

When Mr. Fundler was appointed Chief Legal Officer and Secretary, effective August 4, 2025, the Committee determined the LTI Market Value for his position and approved a grant of an annual long-term incentive award consisting of three-year performance-based awards and time-based restricted stock, each prorated for the portion of the fiscal year in which he served as an executive. The target number of shares of three-year performance-based restricted stock awarded to Mr. Fundler was derived by dividing 50% of his prorated LTI Market Value by the closing sale price of the Company’s common stock on the NYSE on August 1, 2025 and rounding the resulting number to the closest whole number.

The number of three-year performance-based restricted stock shares, if any, that will be earned by the NEOs will be calculated by multiplying the Target Number of Shares of Three-Year Performance-Based Restricted Stock noted in the tables above by the Total Earned Percentage (defined below) based on the Company’s achievement of profitability and revenue goals for fiscal 2025, fiscal 2026 and fiscal 2027. The three-year performance-based restricted stock that is earned, if any, will vest on April 30, 2028.

The Committee established specific CAGR of Total Revenues objectives for fiscal 2025-2027. The Total Earned Percentage (“Total Earned Percentage”) of the performance-based stock awards will be determined the Company’s achievement level over the three-year period.

Consolidated financial results that fall between any of the established achievement levels will be interpolated between the applicable achievement levels.