UNITED STATES

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, T97m4+u6xvTfvq+JAskh8Ks6ViFBRVvL2ofqTutr2qYHPM5feWtuSctG6NI3uRJf uyGSF0e3dyPH/hsUvjmf4Q== 0000912960-02-000022.txt : 20021101 0000912960-02-000022.hdr.sgml : 20021101 20021101160700 ACCESSION NUMBER: 0000912960-02-000022 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 7 FILED AS OF DATE: 20021101 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: ROBERT ELISABETH B CENTRAL INDEX KEY: 0001179486 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: C/O VERMONT TEDDY BEAR CO. INC STREET 2: 6655 SHELBURNE RD. CITY: SHELBURNE STATE: VT ZIP: 05482 BUSINESS PHONE: 8029851309 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: VERMONT TEDDY BEAR CO INC CENTRAL INDEX KEY: 0000912960 STANDARD INDUSTRIAL CLASSIFICATION: DOLLS & STUFFED TOYS [3942] IRS NUMBER: 030291679 STATE OF INCORPORATION: NY FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-46020 FILM NUMBER: 02806871 BUSINESS ADDRESS: STREET 1: 6655 SHELBURNE RD STREET 2: PO BOX 965 CITY: SHELBURNE STATE: VT ZIP: 05482 BUSINESS PHONE: 8029851309 MAIL ADDRESS: STREET 1: 6655 SHELBURNE ROAD STREET 2: P O BOX 965 CITY: SHELBURNE STATE: VT ZIP: 05482 SC 13D 1 v13debr1002.htm SCHEDULE 13D FOR ELISABETH B. ROBERT 10/23/02 UNITED STATES

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.  20549

SCHEDULE 13D
(RULE 13d-101)

INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO
RULE 13D-1(A) AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13D-2(A)

(AMENDMENT NO. ______)

The Vermont Teddy Bear Co., Inc.

(Name of issuer)

Common Stock, $.05 par value per share

(Title of class of securities)

000912960

(CUSIP number)

Elisabeth B. Robert
c/o The Vermont Teddy Bear Co., Inc.
6655 Shelburne Road
 Shelburne, VT 05482
(802) 985-1309

(Name, address and telephone number of person
authorized to receive notices and communications)

October 23,  2002

(Date of event which requires filing of this statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box [_].

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7(b) for other parties to whom copies are to be sent.


(Continued on following pages)


________________________________

*The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).



SCHEDULE 13D

CUSIP NO. 0000912960

1    Name of Reporting Persons.
      S.S. or I.R.S. Identification Nos. of above persons

      Elisabeth B. Robert

2     Check the Appropriate Box if a Member of a Group (See Instructions)
        (a) [_]
        (b) [_]

3     SEC Use Only

4     Source of Funds (See Instructions)

       PF

5    Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d)
      or 2(e) [_]

6     Citizenship or Place of Organization

       U.S.A.

                                         7     SOLE VOTING POWER 709,710
NUMBER OF                							
SHARES                         8     SHARED VOTING POWER  0
BENEFICIALLY           							
OWNED BY EACH      9     SOLE DISPOSITIVE POWER 709,710
REPORTING                 							
PERSON WITH           10    SHARED DISPOSITIVE POWER 0
	
11    Aggregate Amount Beneficially Owned by Each Reporting Person

         709,710

12    Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
        Instructions) [_]

13    Percent of Class Represented by Amount in Row (11)

         13.8%

14    Type of Reporting Person (See Instructions)

        IN




ITEM 1.  Security and Issuer.

The securities to which this statement relates are the Common Stock, par value $.05 per share (the "Common Stock"), of The Vermont Teddy Bear Co, Inc., a New York corporation (the "Company"). The principal executive offices of the Company are located at 6655 Shelburne Road, Shelburne, VT 05482.

ITEM 2.  Identity and Background.

(a) Elisabeth B. Robert (the "Reporting Person")

(b) 1644 Greenbush Road

Charlotte, VT 05445

6655 Shelburne Road

Shelburne, VT 05482

(d) No

(e) No

(f) United States of America

ITEM 3. Source and Amount of Funds or Other Considerations.

On October 23, 2002, the Reporting Person acquired 56,250 shares of common stock by exercise of stock options at an exercise price of $1.00 per share.  The Reporting Person paid the Company $56,250 in cash with personal funds for the shares.


ITEM 4.  Purpose of the Transaction.

The Reporting Person acquired the 56,250 shares for investment purposes.

The Reporting Person does not have any plans or proposals which relate to or would result in any of the events described in subitems (a) through (j) of Item 4.


ITEM 5.  Interest in Securities.

(a) 709,710 shares of Common Stock (355,000 shares of which are not currently owned but may be acquired by the Reporting Person by exercise of stock options) (13.8%)

(b) 709,710 = sole power to vote/direct the vote

(2) October 23, 2002

(3) 56, 250 shares of Common Stock

(4) $1.00 per share

(5) The Vermont Teddy Bear Co., Inc.

6655 Shelburne Road

Shelburne, VT 05482

Exercise of Options

(d) N/A

(e) N/A

ITEM 6.  Contracts, Arrangements, Understandings or Relationships With
                Respect to Securities of the Issuer.

The Reporting Person has an employment contract and option agreements with the Company all of which are filed as exhibits hereto.

ITEM 7.  Material to be Filed as Exhibits.

(1) Employment Agreement between the Reporting Person and the Company dated November 21, 2001.

(2) Option Agreement between the Reporting Person and the Company dated July 1, 1996.

(3) Option Agreement between the Reporting Person and the Company

dated July 1, 1996.

(4) Option Agreement between the Reporting Person and the Company dated November 14, 1997.

(5) Option Agreement between the Reporting Person and the Company dated October 29, 1998.

(6) Option Agreement between the Reporting Person and the Company dated June 11, 1999.

Exhibits


SIGNATURES

     After reasonable inquiry and to the best of our knowledge and belief, we certify that the information set forth in this statement is true, complete and correct.




Date: October 23, 2002



by: /s/  Elisabeth B. Robert
Name: Elisabeth B. Robert


EXHIBIT INDEX

Exhibit
- - -------

A   Employment Contract between the Reporting Person and the Company dated                     November 21, 2001.

B   Option Agreement between the Reporting Person and the Company dated                          July 1, 1996.

C Option Agreement between the Reporting Person and the Company dated July 1, 1996.

D Option Agreement between the Reporting Person and the Company dated November 14, 1997.

E Option Agreement between the Reporting Person and the Company dated October 29, 1998.

F Option Agreement between the Reporting Person and the Company dated June 11, 1999.

EX-10 3 vcontractebr112101.htm EXHIBIT A EMPLOYMENT CONTRACT FOR ELISABETH B. ROBERT DATED 11/21/01 The Vermont Teddy Bear Company, Inc

The Vermont Teddy Bear Company, Inc.

6655 Shelburne Road

Shelburne, Vermont 05482

November 21, 2001

Ms. Elizabeth B. Robert

Shelburne, VT 05482

Re: Employment Agreement

Dear Liz:

This letter is to follow up on recent discussions by the Board and confirms our agreement concerning the terms of your continued employment by The Vermont Teddy Bear Co., Inc. (the "Company"). Except as specifically set forth in this letter, this agreement is intended to supersede all of your prior or existing employment agreements. Our agreement is as follows:

1. Position. You shall continue to be employed as President and Chief Executive Officer of the Company. You shall continue to devote all of your business time, attention, skill, and efforts to the business and affairs of the Company, with such duties as shall be assigned to you by the Board of Directors. You shall be based at the Company's Shelburne, Vermont offices.

2. Term. Your employment shall commence on October 23, 2001 and shall continue until October 22, 2004, unless earlier terminated in accordance with this agreement.

3. Base Salary. Commencing October 23, 2001, your base salary shall be $220,000, increasing to $235,000 on October 23, 2002, and to $250,000 on October 23, 2003.

4. Annual Cash Bonus Based on Increased Revenues and Pre-Tax Profits. In addition to your base salary, you will be entitled to a cash bonus for each fiscal year during the term of your employment equal to the sum of the following:

(a) .25% of the first $3 million of increased consolidated revenues of the Company over consolidated revenues of the prior fiscal year;

(b) 1.5% of any additional increased consolidated revenues exceeding $3 million over consolidated revenues of the prior fiscal year;

(d) 1.5% of the any additional pre-tax income in excess of $ 3 million.

In calculating the Company's pre-tax income for purposes of determining your bonus under this paragraph 4, the amount of the bonus to be paid to you shall be treated as an expense of the Company. The examples set forth on Exhibit A attached to this agreement illustrate the computation of the annual bonus pursuant to this paragraph 4.

The cash bonus shall be paid in cash within sixty (60) days following the end of the fiscal year to which the bonus relates.

5. Discretionary Cash Bonus. The Board reserves the discretion to award a supplemental cash bonus in fiscal year 2002 based on your performance in the event the targets set forth above are not met due to the uncertainty of the times.

6. Stock Options. In addition to the stock options previously granted to you, you shall be entitled to participate in any equity or option incentive plans adopted in connection with any new ventures of the Company, such as SendAMERICA and PajamaGrams.

7. Benefits. You shall receive the following Company benefits: (a) a Thirty Thousand Dollar ($30,000) life insurance policy, (b) a company car of your choice, subject to the Company's approval, which shall not be unreasonably withheld, and (c) participation in all other benefit plans available to senior executive employees of the Company in accordance with the policies and procedures currently or then in effect, as the case may be.

8. Indemnification. The Company shall indemnify you (and your estate) in accordance with the Company's by-laws as in effect from time to time. This indemnification by the Company shall survive termination or expiration of this agreement.

9. Termination.

(a) This agreement may be terminated by either you or by the Company at any time. If your employment is terminated by (a) you for "Good Reason" or (b) the Company, for any reason other than for "Cause" at any time, (i) you shall receive in lieu of any other payment or benefit (except as set forth in subparagraph (e) of this paragraph) continuation of your then current base salary for a period of eighteen (18) months, plus a bonus for the year in which your employment was terminated, pro rated for the period you were employed, calculated in accordance with paragraph 4 of this agreement, and (ii) all your outstanding stock options which were subject to vesting on or prior to the end of the fiscal year in which your employment was terminated shall immediately vest and all your outstanding stock options which were subject to vesting on the basis of the price of the Company's Common Stock shall vest if the stock price meets the applicable benchmark at or prior to the end of the fiscal year in which your employment was terminated, and all such vested exercisable for a period of ten years after the date of their grant.

(b) Upon termination of your employment by the Company at any time (other than for "Cause"), the Company shall provide you with reasonable outplacement services.

(c) Except as set forth in subparagraph (e) of this paragraph, upon a termination by the Company for "Cause" or by you without "Good Reason", you shall not be entitled to receive any further payments or benefits following the date of your termination.

(d) If your employment is terminated on account of your death or your disability which lasts (or is likely, based on reasonable medical evidence, to last) for more than six consecutive months and renders you unable to perform your duties under this agreement, all outstanding stock options which were subject to vesting on or prior to the end of the fiscal year in which your employment was terminated shall immediately vest and all your stock options shall continue to be exercisable for a period of ten years after the date of their grant. Upon such termination for your death or disability, neither you nor your estate shall be entitled to receive the salary continuation referred to in clause (i) of subparagraph (a) of this paragraph 9 with respect to a termination by the Company for any reason other than "Cause".

(e) In the event that your employment is terminated for any reason during the period commencing on the date a definitive agreement is executed by the Company providing for a "Change or Control" or, if earlier, the date which is 90 days prior to a "Change of Control" and ending on the date which is 2 years after a "Change in Control", then, in lieu of the salary continuation benefits to which you would be entitled under subparagraph (a) in the event of a termination by the Company for any reason other than "Cause" or a termination by you for "Good Reason", you shall receive a lump-sum payment, payable within 10 days of the date of your termination, equal to the total cash compensation you received in the 12-month period prior to termination multiplied by two and all your outstanding stock options shall vest and continue to be exercisable for a period of ten years after the date of their grant.

(f) For purposes of this agreement the terms "Cause", "Change in Control", and "Good Reason" shall be defined as follows:

"Cause" means (i) your conviction for, or guilty plea to, any felony (ii) your commission of an act of personal dishonesty or breach of fiduciary duty which involves personal profit in connection with employment by the Company or (iii) your material breach or contravention of any material provision of this agreement or your commission of an act of gross negligence or willful misconduct in the conduct of your duties to the Company; provided, however, that in the cases of clauses (ii) and (iii), the Company shall have given you ten business days' notice thereof, a reasonable opportunity to be heard by the Board of Directors and, during such ten business day period, an opportunity to cure.

"Change of Control" means (i) the Company is merged or consolidated with another corporation or entity, (ii) one person (together with its affiliates) becomes the beneficial owner of 50% or more of the issued and outstanding equity securities of the Company or (iii) all or substantially all of the assets of the Company are acquired by another corporation or entity; provided, however, that the term "Change of Control" shall not include any of the above transactions if it is part of a "going private" transaction in which you participate as a continuing shareholder of the Company and remain the President and Chief Executive Officer of the Company immediately following the consummation of the transaction.

"Good Reason" means (i) the breach or contravention by the Company of any provision of this agreement, (ii) the assignment to you of any duties inconsistent with your status as a senior officer of the Company or a substantial adverse alteration in the nature or status of your responsibilities from those in effect on the commencement date of your employment pursuant to this agreement, (iii) a reduction in your annual base salary as set forth herein or as the same may be increased from time to time and (iv) the failure of the Company to provide you with the benefits contemplated herein. Your continued employment shall not constitute consent to, or a waiver of rights with respect to, any act or failure to act constituting Good Reason hereunder.

10. Repayment of Outstanding Loan. The amount of your outstanding loan to the Company shall be repaid by you to the Company by way of payroll deduction over the 3-year term of this agreement. In the event your employment with the Company is terminated by the Company for Cause or by you for other than Good Reason, the outstanding balance of the loan shall become immediately due and payable. Upon a termination of your employment in any other circumstance, your outstanding loans shall be repaid by reduction of the amounts otherwise due to you under this agreement.

11. Covenant Not to Compete; Anti-Solicitation; Confidentiality.

(a) During the term of your employment and for a period of eighteen (18) months following termination of your employment with the Company, you shall not, directly or indirectly, whether as stockholder, officer, director, employee, consultant or otherwise (except as a beneficial owner of less than 5% of the number of shares of any publicly traded securities) engage in any business that, with respect to 5% or more of its sales, competes with the Company in the business of (i) marketing and selling stuffed teddy bears or animals, or (ii) marketing or selling gift delivery products or services competitive with any registered or pending service mark services of the Company or any product of the Company that accounts for more than 5% of the Company's annual sales.

(b) During the term of your employment and for a period of eighteen (18) months after termination of your employment, you will not, directly or indirectly, on your own behalf or in the service or on behalf of others, (i) solicit customers or accounts of the Company, including parties identified as active prospects of the Company (other than by way of general commercial advertising) or (ii) solicit or attempt to solicit or take away any employee of the Company.

(c) During the term of your employment, you will be working with sensitive business data and trade secrets belonging to the Company. You acknowledge that this information is confidential and/or constitutes trade secrets and is the exclusive property of the Company. You agree that you will not disclose to anyone, either directly or indirectly, during the term of your employment or at any time thereafter, any such confidential information, nor will you use the same for any purpose other than in the course of your service to the Company or its subsidiaries and for the exclusive benefit of the Company. You agree that disclosure of any confidential information or trade secrets to competitors of the Company, both during and after the term of your employment, or your use of such confidential information and trade secrets for your own benefit after your employment terminates would constitute misappropriation of such confidential information or trade secrets. You expressly acknowledge that the abov e-described information derives independent economic value, actual or potential, from not being generally known to the public or to other persons who can obtain economic value from its disclosure or use. You further expressly acknowledge that such information is and has been the subject of efforts that are reasonable under the circumstances to maintain its confidentiality.

(d) The term "confidential information" shall not include any knowledge or information which (i) is or becomes generally available to the public other than as a result of a disclosure by you or by disclosure by another person who is under a contractual, legal, fiduciary, or other duty to keep the information confidential, (ii) information which was in your possession or known by you prior to being furnished to you by the Company (which prior possession by you is evidenced by written or electronic records), (iii) information which becomes available to you on a non-confidential basis from a source which is not prohibited from disclosing such information by a legal, contractual or fiduciary obligation but only if you provide the Company with written notice of your possession of such information promptly upon becoming aware of it, (iv) information which has been independently developed by you and which independent development is memorialized in writing or by an electronic record which predates the date on which the information was disclosed to you by the Company. Notwithstanding these confidentiality obligations, in the event you are legally compelled by subpoena, other legal process, or requests pursuant to an investigation by a governmental agency to disclose confidential information of the Company, you will be permitted to disclosed such information, to the extent you are so compelled, provided you have given prompt prior written notice to the Company, as the case may be, upon receipt of the subpoena, legal process, or request so as to enable the Company to seek a protective order or other appropriate remedy.

(e) You agree that any work of authorship created or developed by you, either individually or jointly with others, in the course of your employment with the Company (including, but not limited to software source code, blueprints, diagrams, flow charts, specifications or functional descriptions of software) shall be deemed a "work for hire," and the property of the Company.

(f) With respect to any invention, trade secret, or work of authorship (to the extent not deemed a "work for hire" by operation of law) created or developed in the course of your employment with the Company, you hereby irrevocably assign, transfer, and convey to the Company all of your right, title and interest in such property, including but not limited to, all rights of patent, copyright, trade secret or other proprietary rights in such property. Further, you agree to execute any documents or take any action reasonably requested by the Company to perfect the Company's ownership of any such property.

(g) You acknowledge the extreme importance being placed on the scope and duration of the covenants set forth in the preceding subparagraphs of this paragraph 11 and fully agree to these restrictions. You acknowledge that the law concerning restrictive covenants is based on facts and circumstances. Therefore, you specifically agree that if any court or board of arbitration to which a dispute over these restrictions is referred shall find any of these restrictions overbroad or unreasonable, then you authorize the court or board to enforce the restrictions to the greatest extent it deems reasonable. You further agree that in the event of a breach of any of the restrictions, the Company shall be entitled to secure an order in any suit brought for that purpose to enjoin you from further violating such restrictions. Pending the hearing and decision of the application for such an order, the Company shall be entitled to a temporary restraining order or injunctive relief without prejudice to any othe r legal or equitable remedy available to the Company.

(h) As used in this paragraph 11, the term "Company" shall mean the Company and any of its subsidiaries.

If the foregoing terms are acceptable to you, please sign and date the enclosed copy of this letter where indicated below and return it to me.

Very truly yours,

/s/ Fred Marks

Fred Marks, Chairman of the Board

ACKNOWLEDGED AND AGREED:

/s/ Elisabeth B. Robert

Elisabeth B. Robert

Dated: November 29, 2001

EXHIBIT A

The following table illustrates the computation of the annual bonus pursuant to paragraph 4 of the employment agreement (hereinafter the "Bonus Formula") between Elisabeth B. Robert and The Vermont Teddy Bear Co., Inc.

LINE

FY 2002

FY 2003

1

Current FY Consolidated Revenues

$41,000,000

$49,000,000

Assumed

2

Prior FY Consolidated Revenues

$37,200,000

$41,000,000

Assumed

3

Excess Revenues over Prior FY

$3,800,000

$8,000,000

Computed

4

Less: $3 million threshold

($3,000,000)

($3,000,000)

Per Bonus Formula

5

Excess over $3 million threshold

$800,000

$5,000,000

Computed

6

Percentage on first $3 million

0.25%

0.25%

Per Bonus Formula

7

Percentage on excess over $3 million

1.50%

1.50%

Per Bonus Formula

8

Pre-Tax Income

$4,000,000

$6,200,000

Assumed

9

Less: $3 million threshold

($3,000,000)

($3,000,000)

Per Bonus Formula

10

Excess over $3 million threshold

$1,000,000

$3,200,000

Computed

11

Percentage on first $3 million

0.25%

0.25%

Per Bonus Formula

12

Percentage on excess over $3 million

1.50%

1.50%

Per Bonus Formula

COMPUTATIONS:

13

Bonus on First $ 3 million of Consol. Revenues

$7,500

$7,500

Line 4 x Line 6

14

Bonus on Excess Consol. Revenues

$12,000

$75,000

Line 5 x Line 7

15

Bonus on First $ 3 million of Pre-Tax Profit

$7,500

$7,500

Line 9 x Line 11

16

Bonus on Excess Pre-Tax Profit

$15,000

$48,000

Line 10 x Line 12

17

Total Bonus

$42,000

$138,000

EX-99 4 v070196ebr3.htm EXHIBIT B OPTION AGREEMENT DATED 07/01/96

INCENTIVE STOCK OPTION AGREEMENT

1. Grant of Option. Pursuant to the Incentive Stock Option Plan (the "Plan") for certain employees of The Vermont Teddy Bear Co., Inc. (the "Company"), the Company grants to Elisabeth B. Robert (the "Option Holder") an option to purchase from the Company a total of 75,000 Shares of Common Stock of the Company at $1.00 per share (being at least the fair market value per share of the Common Stock on the date of this grant), in the amounts, during the periods and upon the terms and conditions set forth in this Agreement.

2. Time of Exercise. Except only as specifically provided elsewhere in this agreement, this option is exercisable in the following cumulative installments:

First Installment. Up to 25% of the total optioned shares at any time on or after July 1, 1997;

Second Installment. Up to an additional 25% of the total optioned shares at any time on or after July 1, 1998;

Third Installment. Up to an additional 25% of the total optioned shares at any time on or after July 1, 1999; and

Fourth Installment. Up to an additional 25% of the total optioned shares at any time on or after July 1, 2000;

If an installment covers a fractional share, such installment will be rounded off to the next highest share, except the final installment, which will be for the balance of the total optioned shares. In the event that (i) the Option Holder terminates her employment without Good Reason, or (ii) the Company terminates her employment for Cause, this option will only be exercisable to the extent that the Option Holder could have exercised it on the date of her termination of employment. If the Option Holder's employment with the Company is (i) terminated by her for Good Reason, (ii) by the Company for any reason other than Cause, or (iii) due to her death or disability which lasts (or is likely, based on reasonable medical evidence, to last) for more than six consecutive months and renders her unable to perform her duties, then this option will be exercisable to the extent that it would have been exercisable one day after the end of the Company's fiscal year in which the Option Holder's emplo yment is terminated. In the event that the Company undergoes a Change in Control, this option shall immediately be exercisable in full and the Option Holder shall be entitled to purchase the balance of the total optioned shares not yet purchased. The terms "Good Reason," "Cause" and "Change in Control" shall have the same meanings as in the Option Holder's Employment Agreement.

3. Subject to Plan. This option and the grant and exercise thereof are subject to the terms and conditions of the Plan, which is incorporated herein by reference and made a part hereof, but the terms of the Plan shall not be considered an enlargement of any benefits under this Agreement. In addition, this option is subject to any rules and regulations promulgated pursuant to the Plan, now or hereafter in effect.

4. Term. This option will terminate at 5 p.m. ten years from the date of grant.

5. Cancellation of Outstanding Options. Any options granted to the Option Holder prior to the date of this agreement are cancelled effective June 3, 1997.

6. Who May Exercise. During the lifetime of the Option Holder, this option may be exercised only by the Option Holder. If the Option Holder dies or becomes disabled (within the meaning of Section 22(e)(3) of the Internal Revenue Code) prior to the termination date specified in Section 4 hereof without having exercised the option as to all of the shares covered thereby, the option may be exercised to the extent the Option Holder could have exercised the option on the date of her death or disability at any time prior to the earliest of the dates specified in Section 4(a) and (b) hereby by (i) the Option Holder's estate or a person who acquired the right to exercise the option by bequest or inheritance or by reason of the death of the Option Holder in the event of the Option Holder's death, or (ii) the Option Holder or her personal representative in the event of the Option Holder's disability, subject to the other terms of this Agreement, the Plan and applicable laws, r ules and regulations. For purposes of this Agreement, the Company shall determine the date of disability of the Option Holder.

7. Restrictions on Exercise. This option:

(a) may be exercised only with respect to full shares and no fractional share of stock shall be issued; and

(b) may not be exercised in whole or in part and no cash or certificates representing shares subject to such option shall be delivered, if any requisite approval or consent of any government authority of any kind having jurisdiction over the exercise of options shall not have been secured.

8. Disqualifying Exercise. In the event that this option is not exercised on or before the date three months after the Option Holder's employment terminates with the Company or a subsidiary of the Company, or the date six months after the date the Option Holder's employment with the Company and its subsidiaries terminates by reason of the Option Holder's death, or the date one year after the Option Holder's employment terminates due to disability, upon the exercise of the option federal income taxes will not be deferred, rather, the Option Holder shall recognize ordinary income upon exercise of the option and the Company may be required to comply with the income tax withholding requirements of the Internal Revenue Code.

9. Manner of Exercise. Subject to such administrative regulations as the Board of Directors of the Company may from time to time adopt, the Option Holder or beneficiary shall, in order to exercise this option, give written notice to the Company of the number of shares being purchased and purchase price to be paid therefore accompanied by the following:

(a) full payment in United States Dollars of the option price in the form of cash or check for the shares of stock being purchased; and

(b) such documents as the Company in its discretion deems necessary (i) to evidence the exercise, in whole or in part, of the option evidenced by this Agreement, (ii) to comply with any Shareholder's Agreement then in effect with respect to the shareholders of the Company and (iii) to comply with or satisfy the requirements of the Securities Act of 1933, or any other law, as then in effect.

10. Non-Assignability. This option is not assignable or transferable by the Option Holder except by will or by the laws of descent and distribution.

11. Rights of Stockholder. The Option Holder will have no rights as a stockholder with respect to any shares covered by this option until the issuance of a certificate or certificates to the Option Holder for the shares. Except as otherwise provided in Section 11 hereof, no adjustment shall be made for dividends or other rights for which the record date is prior to the issuance of such certificate or certificates.

12. Capital Adjustment. The number of shares of Common Stock covered by this option, and the option price thereof, shall be subject to such adjustment as the Board of Directors of the Company deems appropriate to reflect any stock dividend, stock split, share combination, exchange of shares, recapitalization, merger, consolidation, separation, reorganization, liquidation or the like, of or by the Company.

IN WITNESS WHEREOF, the Company has caused this Agreement to be exercised by its duly authorized officer, and the Option Holder to evidence her consent and approval of all the terms hereof, has duly executed this Agreement as of the 3rd day of June, 1997.

THE VERMONT TEDDY BEAR CO., INC.

BY: /s/ Fred Marks

Its Duly Authorized Agent

/s/ Elisabeth B. Robert

Elisabeth B. Robert
EX-99 5 v070196ebr5.htm EXHIBIT C OPTION AGREEMENT DATED 07/01/96

INCENTIVE STOCK OPTION AGREEMENT

1. Grant of Option. Pursuant to the Incentive Stock Option Plan (the "Plan") for certain employees of The Vermont Teddy Bear Co., Inc. (the "Company"), the Company grants to Elisabeth B. Robert (the "Option Holder") an option to purchase from the Company a total of 150,000 Shares of Common Stock of the Company at $1.00 per share (being at least the fair market value per share of the Common Stock on the date of this grant), in the amounts, during the periods and upon the terms and conditions set forth in this Agreement.

2. Time of Exercise. Except only as specifically provided elsewhere in this agreement, this option is exercisable in the following cumulative installments:

First Installment. Up to 25% of the total optioned shares at any time on or after July 1, 1997;

Second Installment. Up to an additional 25% of the total optioned shares at any time on or after July 1, 1998;

Third Installment. Up to an additional 25% of the total optioned shares at any time on or after July 1, 1999; and

Fourth Installment. Up to an additional 25% of the total optioned shares at any time on or after July 1, 2000;

4. Term. This option will terminate at 5 p.m. ten years from the date of grant.

5. Cancellation of Outstanding Options. Any options granted to the Option Holder prior to the date of this agreement are cancelled effective June 3, 1997.

7. Restrictions on Exercise. This option:

(a) may be exercised only with respect to full shares and no fractional share of stock shall be issued; and

(a) full payment in United States Dollars of the option price in the form of cash or check for the shares of stock being purchased; and

10. Non-Assignability. This option is not assignable or transferable by the Option Holder except by will or by the laws of descent and distribution.

THE VERMONT TEDDY BEAR CO., INC.

BY: /s/ Fred Marks

Its Duly Authorized Agent

/s/ Elisabeth B. Robert

Elisabeth B. Robert
EX-99 6 v111497ebr.htm EXHIBIT D OPTION AGREEMENT DATED 11/14/97

INCENTIVE STOCK OPTION AGREEMENT

1. Grant of Option. Pursuant to the Incentive Stock Option Plan (the "Plan") for certain employees of The Vermont Teddy Bear Co., Inc. (the "Company"), the Company grants to Elisabeth B. Robert (the "Option Holder") an option to purchase from the Company a total of 100,000 Shares of Common Stock of the Company at $1.25 per share (being at least the fair market value per share of the Common Stock on the date of this grant), in the amounts, during the periods and upon the terms and conditions set forth in this Agreement.

2. Time of Exercise. Except only as specifically provided elsewhere in this agreement, this option is exercisable in the following cumulative installments:

First Installment. Twenty-Five Thousand (25,000) shares when the Company's closing stock price has averaged Two Dollars ($2.00) for a three (3) month period;

Second Installment. Twenty-Five Thousand (25,000) shares when the Company's closing stock price has averaged Two Dollars and Twenty-five Cents ($2.25) for a three (3) month period;

Third Installment. Twenty-Five Thousand (25,000) shares when the Company's closing stock price has averaged Two Dollars and Fifty Cents ($2.50) for a three (3) month period;

Fourth Installment. Twenty-Five Thousand (25,000) shares when the Company's closing stock price has averaged Three Dollars ($3.00) for a three (3) month period;

If an installment covers a fractional share, such installment will be rounded off to the next highest share, except the final installment, which will be for the balance of the total optioned shares. In the event that (i) the Option Holder terminates her employment without Good Reason, or (ii) the Company terminates her employment for Cause, this option will only be exercisable to the extent that the Option Holder could have exercised it on the date of her termination of employment. If the Option Holder's employment with the Company is (i) terminated by her for Good Reason, (ii) by the Company for any reason other than Cause, or (iii) due to her death or disability which lasts (or is likely, based on reasonable medical evidence, to last) for more than six consecutive months and renders her unable to perform her duties, then this option will be exercisable to the extent that it would have been exercisable at the end of the Company's fiscal year in which the Option Holder's employment is te rminated. In the event that the Company undergoes a Change in Control, this option shall immediately be exercisable in full and the Option Holder shall be entitled to purchase the balance of the total optioned shares not yet purchased. The terms "Good Reason," "Cause" and "Change in Control" shall have the same meanings as in the Option Holder's Employment Agreement.

4. Term. This option will terminate at 5 p.m. ten years from the date of grant.

5. Who May Exercise. During the lifetime of the Option Holder, this option may be exercised only by the Option Holder. If the Option Holder dies or becomes disabled (within the meaning of Section 22(e)(3) of the Internal Revenue Code) prior to the termination date specified in Section 4 hereof without having exercised the option as to all of the shares covered thereby, the option may be exercised to the extent the Option Holder could have exercised the option on the date of her death or disability at any time prior to the earliest of the dates specified in Section 4(a) and (b) hereby by (i) the Option Holder's estate or a person who acquired the right to exercise the option by bequest or inheritance or by reason of the death of the Option Holder in the event of the Option Holder's death, or (ii) the Option Holder or her personal representative in the event of the Option Holder's disability, subject to the other terms of this Agreement, the Plan and applicable laws, r ules and regulations. For purposes of this Agreement, the Company shall determine the date of disability of the Option Holder.

6. Restrictions on Exercise. This option:

(a) may be exercised only with respect to full shares and no fractional share of stock shall be issued; and

7. Disqualifying Exercise. In the event that this option is not exercised on or before the date three months after the Option Holder's employment terminates with the Company or a subsidiary of the Company, or the date six months after the date the Option Holder's employment with the Company and its subsidiaries terminates by reason of the Option Holder's death, or the date one year after the Option Holder's employment terminates due to disability, upon the exercise of the option federal income taxes will not be deferred, rather, the Option Holder shall recognize ordinary income upon exercise of the option and the Company may be required to comply with the income tax withholding requirements of the Internal Revenue Code.

8. Manner of Exercise. Subject to such administrative regulations as the Board of Directors of the Company may from time to time adopt, the Option Holder or beneficiary shall, in order to exercise this option, give written notice to the Company of the number of shares being purchased and purchase price to be paid therefore accompanied by the following:

(a) full payment in United States Dollars of the option price in the form of cash or check for the shares of stock being purchased; and

9. Non-Assignability. This option is not assignable or transferable by the Option Holder except by will or by the laws of descent and distribution.

10. Rights of Stockholder. The Option Holder will have no rights as a stockholder with respect to any shares covered by this option until the issuance of a certificate or certificates to the Option Holder for the shares. Except as otherwise provided in Section 11 hereof, no adjustment shall be made for dividends or other rights for which the record date is prior to the issuance of such certificate or certificates.

11. Capital Adjustment. The number of shares of Common Stock covered by this option, and the option price thereof, shall be subject to such adjustment as the Board of Directors of the Company deems appropriate to reflect any stock dividend, stock split, share combination, exchange of shares, recapitalization, merger, consolidation, separation, reorganization, liquidation or the like, of or by the Company.

THE VERMONT TEDDY BEAR CO., INC.

BY: /s/ Fred Marks

Its Duly Authorized Agent

/s/ Elisabeth B. Robert

Elisabeth B. Robert
EX-99 7 v102998ebr.htm EXHIBIT E OPTION AGREEMENT DATED 10/29/98

INCENTIVE STOCK OPTION AGREEMENT

1. Grant of Option. Pursuant to the Incentive Stock Option Plan (the "Plan") for certain employees of The Vermont Teddy Bear Co., Inc. (the "Company"), the Company granted on October 29, 1998 to Elisabeth Robert (the "Option Holder") an option to purchase from the Company a total of 225,000 Shares of Common Stock of the Company at $1.00 per share (being at least the fair market value per share of the Common Stock on the date of this grant), in the amounts, during the periods and upon the terms and conditions set forth in this Agreement.

2. Time of Exercise. Except only as specifically provided elsewhere in this agreement, this incentive stock option shall vest according to the following schedule:

First Installment. Seventy-five thousand (75,000) shares when the average of the Company's closing price of its Common Stock for each trading day within a three (3) month period is equal to or greater than Two Dollars ($2.00);

Second Installment. Seventy-five thousand (75,000) shares when the average of the Company's closing price of its Common Stock for each trading day within a three (3) month period is equal to or greater than Three Dollars ($3.00);

Third Installment. Seventy-five thousand (75,000) shares when the average of the Company's closing price of its Common Stock for each trading day within a three (3) month period is equal to or greater than Four Dollars ($4.00);

If an installment covers a fractional share, such installment will be rounded off to the next highest share, except the final installment, which will be for the balance of the total optioned shares. These options shall vest on seven years after the original date of grant regardless of the market price of the Company's stock on that date. In the event of the Option Holder's termination of employment for whatever reason, this option will only be exercisable to the extent that the Option Holder could have exercised it on the date of her termination of employment.

Term. This option will terminate 5 p.m. on ten years from the date of grant.

exercised the option on the date of her death or disability at any time prior to the earliest of the dates specified in Section 4(a) and (b) hereby by (i) the Option Holder's estate or a person who acquired the right to exercise the option by bequest or inheritance or by reason of the death of the Option Holder in the event of the Option Holder's death, or (ii) the Option Holder or her personal representative in the event of the Option Holder's disability, subject to the other terms of this Agreement, the Plan and applicable laws, rules and regulations. For purposes of this Agreement, the Company shall determine the date of disability of the Option Holder.

6. Restrictions on Exercise. This option:

(a) may be exercised only with respect to full shares and no fractional share of stock shall be issued; and there

7. Disqualifying Exercise. In the event that this option is not exercised on or before the date three months after the Option Holder's employment terminates with the Company or a subsidiary of the Company for any reason other than the employee's death or disability, upon exercise of the option, federal income taxes will not be deferred, rather, the Option Holder shall recognize ordinary income upon exercise of the option and the Company may be required to comply with the income tax withholding requirements of the Internal Revenue Code. If employment is terminated as a result of the Option Holder's death or disability, exercise of the option during the remainder of its term shall not constitute a disqualifying exercise.

(a) full payment in United States Dollars of the option price in the form of cash or check for the shares of stock being purchased; and

9. Non-Assignability. This option is not assignable or transferable by the Option Holder except by will or by the laws of descent and distribution.

IN WITNESS WHEREOF, the Company has caused this Agreement to be exercised by its duly authorized officer, and the Option Holder to evidence his or her consent and approval of all the terms hereof, has duly executed this Agreement as of the 10th day of December, 1998.

THE VERMONT TEDDY BEAR CO., INC.

BY: /s/ Fred Marks

Its Duly Authorized Agent

/s/ Elisabeth B. Robert

Elisabeth Robert
EX-99 8 v061199ebr.htm EXHIBIT F OPTION AGREEMENT DATED 06/11/99 INCENTIVE STOCK OPTION AGREEMENT INCENTIVE STOCK OPTION AGREEMENT

1. Grant of Option. Pursuant to the Incentive Stock Option Plan (the "Plan") for certain employees of The Vermont Teddy Bear Co., Inc. (the "Company"), the Company grants to Elisabeth Robert (the "Option Holder") an option to purchase from the Company a total of 50,000 shares of Common Stock of the Company at $3.1875 per share (being at least the fair market value per share of the Common Stock on the date of this grant), in the amounts, during the periods and upon the terms and conditions set forth in this Agreement.

2. Time of Exercise. Except only as specifically provided elsewhere in this agreement, this option is exercisable in the following cumulative installments.

First Installment. Up to 50% of the total optioned shares on the earlier of (i) the date the average of the Company's closing stock price of its Common Stock for a thirty (30) day period is equal to or greater than Six Dollars ($6.00) or (ii) the date the Company reports annual pre-tax income of at least $3,000,000;

Second Installment. Up to 50% of the total optioned shares on the earlier of (i) the date the average of the Company's closing stock price of its Common Stock for a thirty (30) day period is equal to or greater than Nine Dollars ($9.00) or (ii) the date the Company reports annual pre-tax income of at least $4,000,000;

If an installment covers a fractional share, such installment will be rounded off to the next highest share, except the final installment, which will be for the balance of the total optioned shares. These options shall vest on seven years after the original date of grant regardless of the market price of the Company's stock on that date. In the event that (i) the Option Holder terminates his employment without Good Reason, or (ii) the Company terminates his employment for Cause, this option will only be exercisable to the extent that the Option Holder could have exercised it on the date of his termination of employment. If the Option Holder's employment with the Company is (i) terminated by him for Good Reason, (ii) by the Company for any reason other than Cause, or (iii) due to his death or disability which lasts (or is likely, based on reasonable medical evidence, to last) for more than six consecutive months and renders him unable to perform his duties, then this option will be exerci sable to the extent that it would have been exercisable at the end of the Company's fiscal year in which the Option Holder's employment is terminated. In the

event that the Company undergoes a Change in Control, this option shall immediately be exercisable in full and the Option Holder shall be entitled to purchase the balance of the total optioned shares not yet purchased. The terms "Good Reason," "Cause" and "Change in Control" shall have the same meanings as in the Option Holder's Employment Agreement.

4. Term. This option will terminate at 5 p.m. on ten years from date of grant.

5. Who May Exercise. During the lifetime of the Option Holder, this option may be exercised only by the Option Holder. If the Option Holder dies or becomes disabled (within the meaning of Section 22(e)(3) of the Internal Revenue Code) prior to the termination date specified in Section 4 without having exercised the option as to all of the shares covered thereby, the option may be exercised to the extent the Option Holder could have exercised the option on the date of his or her death or disability at any time prior to the earliest of the dates specified in Section 4(a) and (b) by (i) the Option Holder's estate or a person who acquired the right to exercise the option by bequest or inheritance or by reason of the death of the Option Holder in the event of the Option Holder's death, or (ii) the Option Holder or his personal representative in the event of the Option Holder's disability, subject to the other terms of this Agreement, the Plan and applicable laws, rules an d regulations. For purposes of this Agreement, the Company shall determine the date of disability of the Option Holder.

6. Restrictions on Exercise. This option:

(a) may be exercised only with respect to full shares and no fractional share of stock shall be issued;

may be exercised only if at all times during the period beginning with the date of the granting of the option and ending on the date one week prior to the date of exercise the Option Holder was an employee of either the Company or a subsidiary of the Company; provided, if the Option Holder's continuous employment is terminated by (i) disability, the option may be exercised in accordance with Section 5, or (ii) death, or if the Option Holder dies within said one-week period, the option may be exercised in accordance with Section 5.

7. Disqualifying Exercise. In the event that this option is not exercised on or before the date three months after the Option Holder's employment terminates with the Company or a subsidiary of the Company for any reason other than the employee's death or disability, upon exercise of the option, federal income taxes will not be deferred, rather, the Option Holder shall recognize ordinary income upon exercise of the option and the Company may be required to comply with the income tax withholding requirements of the Internal Revenue Code. If employment is terminated as a result of the Option Holder's death or disability, exercise of the option during the remainder of its term shall not constitute a disqualifying exercise.

(a) full payment in United States dollars of the option price in the form of cash or check for the shares of stock being purchased; and

9. Non-Assignability. This option is not assignable or transferable by the Option Holder except by will or by the laws of descent and distribution.

10. Rights of Stockholder. The Option Holder will have no rights as a stockholder with respect to any shares covered by this option until the issuance of a certificate or certificates to the Option Holder for the shares. Except as otherwise provided in Section 10 hereof, no adjustment shall be made for dividends or other rights for which the record date is prior to the issuance of such certificate of certificates.

IN WITNESS WHEREOF, the Company has caused this Agreement to be exercised by its duly authorized officer and the Option Holder, to evidence his or her consent and approval of all the terms hereof, has duly executed this Agreement as of the 11^th day of June, 1999.

THE VERMONT TEDDY BEAR CO., INC

BY: /s/ Fred Marks

Its Duly Authorized Agent

BY: /s/ Elisabeth B. Robert

Elisabeth Robert

INCENTIVE STOCK OPTION AGREEMENT

1. Grant of Option. Pursuant to the Incentive Stock Option Plan (the "Plan") for certain employees of The Vermont Teddy Bear Co., Inc. (the "Company"), the Company grants to Gerald Howatt (the "Option Holder") an option to purchase from the Company a total of 2,500 shares of Common Stock of the Company at $3.1875 per share (being at least the fair market value per share of the Common Stock on the date of this grant), in the amounts, during the periods and upon the terms and conditions set forth in this Agreement.

2. Time of Exercise. Except only as specifically provided elsewhere in this agreement, this option is exercisable in the following cumulative installments.

First Installment. Up to 25% of the total optioned shares when the average of the Company's closing stock price of its Common Stock for each trading day within a three (3) month period is equal to or greater than Three Dollars ($3.00);

Second Installment. Up to 25% of the total optioned shares when the average of the Company's closing stock price of its Common Stock for each trading day within a three (3) month period is equal to or greater than Four Dollars ($4.00);

Third Installment. Up to 25% of the total optioned shares when the average of the Company's closing stock price of its Common Stock for each trading day within a three (3) month period is equal to or greater than Five Dollars ($5.00);

Fourth Installment. Up to 25% of the total optioned shares when the average of the Company's closing stock price of its Common Stock for each trading day within a three (3) month period is equal to or greater than Six Dollars ($6.00);

If an installment covers a fractional share, such installment will be rounded off to the next highest share, except the final installment, which will be for the balance of the total optioned shares. These options shall vest on seven years after the original date of grant regardless of the market price of the Company's stock on that date. In the event of the Option Holder's termination of employment for whatever reason, this option will only be exercisable to the extent that the Option Holder could have exercised it on the date of her termination of employment.

Term. This option will terminate at the first of the following:

(a) 5 p.m. on ten years from date of grant.

(b) 5 p.m. on the date one year following the date the Option Holder's employment with the Company and its subsidiaries terminates by reason of the Option Holder's death or disability (within the meaning of Section 22(e)(3) of the Internal Revenue Code).

(c) 5 p.m. on the date ninety days following the date the Option Holder's employment with the Company and its subsidiaries terminates for a reason other than death or disability.

5. Who May Exercise. During the lifetime of the Option Holder, this option may be exercised only by the Option Holder. If the Option Holder dies or becomes disabled (within the meaning of Section 22(e)(3) of the Internal Revenue Code) prior to the termination date specified in Section 4 without having exercised the option as to all of the shares covered thereby, the option may be exercised to the extent the Option Holder could have exercised the option on the date of his or her death or disability at any time prior to the earliest of the dates specified in Section 4(a) and (b) by (i) the Option Holder's estate or a person who acquired the right to exercise the option by bequest or inheritance or by reason of the death of the Option Holder in the event of the Option Holder's death, or (ii) the Option Holder or his personal representative in the event of the Option Holder's disability, subject to the other terms of this Agreement, the Plan and applicable laws, rules an d regulations. For purposes of this Agreement, the Company shall determine the date of disability of the Option Holder.

6. Restrictions on Exercise. This option:

(a) may be exercised only with respect to full shares and no fractional share of stock shall be issued;

(c) may be exercised only if at all times during the period beginning with the date of the granting of the option and ending on the date one week prior to the date of exercise the Option Holder was an employee of either the Company or a subsidiary of the Company; provided, if the Option Holder's continuous employment is terminated by (i) disability, the option may be exercised in accordance with Section 5, or (ii) death, or if the Option Holder dies within said one-week period, the option may be exercised in accordance with Section 5.

7. Manner of Exercise. Subject to such administrative regulations as the Board of Directors of the Company may from time to time adopt, the Option Holder or beneficiary shall, in order to exercise this option, give written notice to the Company of the number of shares being purchased and purchase price to be paid therefore accompanied by the following:

(a) full payment in United States dollars of the option price in the form of cash or check for the shares of stock being purchased; and

8. Non-Assignability. This option is not assignable or transferable by the Option Holder except by will or by the laws of descent and distribution.

9. Rights of Stockholder. The Option Holder will have no rights as a stockholder with respect to any shares covered by this option until the issuance of a certificate or certificates to the Option Holder for the shares. Except as otherwise provided in Section 10 hereof, no adjustment shall be made for dividends or other rights for which the record date is prior to the issuance of such certificate of certificates.

10. Capital Adjustment. The number of shares of Common Stock covered by this option, and the option price thereof, shall be subject to such adjustment as the Board of Directors of the Company deems appropriate to reflect any stock dividend, stock split, share combination, exchange of shares, recapitalization, merger, consolidation, separation, reorganization, liquidation or the like, of or by the Company.

THE VERMONT TEDDY BEAR CO., INC

BY: ____________________________

Its Duly Authorized Agent

BY: ____________________________

Gerald Howatt
-----END PRIVACY-ENHANCED MESSAGE-----

LINE		FY 2002	FY 2003
1	Current FY Consolidated Revenues	$41,000,000	$49,000,000	Assumed

2	Prior FY Consolidated Revenues	$37,200,000	$41,000,000	Assumed

3	Excess Revenues over Prior FY	$3,800,000	$8,000,000	Computed

4	Less: $3 million threshold	($3,000,000)	($3,000,000)	Per Bonus Formula

5	Excess over $3 million threshold	$800,000	$5,000,000	Computed

6	Percentage on first $3 million	0.25%	0.25%	Per Bonus Formula

7	Percentage on excess over $3 million	1.50%	1.50%	Per Bonus Formula

8	Pre-Tax Income	$4,000,000	$6,200,000	Assumed

9	Less: $3 million threshold	($3,000,000)	($3,000,000)	Per Bonus Formula

10	Excess over $3 million threshold	$1,000,000	$3,200,000	Computed

11	Percentage on first $3 million	0.25%	0.25%	Per Bonus Formula

12	Percentage on excess over $3 million	1.50%	1.50%	Per Bonus Formula

	COMPUTATIONS:

13	Bonus on First $ 3 million of Consol. Revenues	$7,500	$7,500	Line 4 x Line 6

14	Bonus on Excess Consol. Revenues	$12,000	$75,000	Line 5 x Line 7

15	Bonus on First $ 3 million of Pre-Tax Profit	$7,500	$7,500	Line 9 x Line 11

16	Bonus on Excess Pre-Tax Profit	$15,000	$48,000	Line 10 x Line 12

17	Total Bonus	$42,000	$138,000