EXHIBIT 10.5

CEC ENTERTAINMENT, INC.

FORM OF 1997 NON-STATUTORY STOCK OPTION AGREEMENT

[This is a Transferable Agreement/This is a Non-Transferable Agreement]

THIS NON-STATUTORY STOCK OPTION AGREEMENT (“the Agreement”) is made and entered
into on                     , 20         (the “Granting Date”), by and between
CEC ENTERTAINMENT, INC., a Kansas corporation (the “Company”), and
                     (the “Optionee”).

WITNESSETH:

WHEREAS, the Shareholders of the Company (the “Shareholders”) have adopted the
CEC Entertainment, Inc. Non-Statutory Stock Option Plan (the “Plan”), pursuant
to which the Stock Option Committee of the Board of Directors (the “Committee”)
may grant, from time to time, on or prior to the termination date specified in
the Plan, options to purchase shares of the Common Stock of the Company to
individuals who are key employees of the Company or of any of its subsidiaries,
in such amounts and under such form of agreement as shall be determined by the
Committee; and

WHEREAS, pursuant to the Plan, the Committee has determined that the Optionee
shall be granted an option to purchase shares of the Common Stock of the Company
on the terms and conditions herein set forth;

NOW, THEREFORE, in consideration of the mutual promises and covenants herein
contained and other good and valuable consideration, the parties hereto do
hereby agree as follows:

1. Incorporation of the Plan. A copy of the Plan is attached hereto and
incorporated herein by reference, and all of the terms, conditions and
provisions contained therein shall be deemed to be terms, conditions and
provisions of this Agreement. All terms used herein which are defined in the
Plan shall have the meanings given them in the Plan. The terms and conditions of
the Plan will prevail in the event of any inconsistency between the terms and
conditions of this Agreement and the Plan.

2. Grant of Option. Pursuant to the authorization of the Committee, and subject
to the terms, conditions and provisions contained in the Plan and this
Agreement, the Company hereby grants to the Optionee, an option (the “Option”)
to purchase from the Company all or any part of an aggregate of             
shares of Common Stock of the Company, at the purchase price of $            
per share. The date first written above shall be deemed to be the Granting Date
of the Option.

3. Period of Exercise. The Option granted hereunder shall be exercisable from
time to time by the Optionee subject to the following restrictions:

(a) Vesting and Expiration Dates. Optionee may exercise up to an aggregate of
                    , and an aggregate of one hundred percent (100%) of the
option after                     . The Option shall expire at 12:00 midnight on
                    .

 

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(b) Exercise During Lifetime of Optionee. Except as may otherwise be provided
for in the Plan and this Agreement, the Option shall be exercisable during the
lifetime of the Optionee only by him or her.

(c) Exercise after Death of Optionee. The Option shall be exercisable after the
death of the Optionee only if the Optionee shall at the time of his or her death
have been an employee of the Company or a subsidiary, and then (i) only by or on
behalf of such person or persons to whom the Optionee’s rights under the Option
shall have been passed by the Optionee’s will or, if the right to exercise the
Option is not specifically bequeathed by will, by his or her legal
representative or representatives, (ii) only to the extent that the Optionee was
entitled to exercise said Option at the date of his or her death, and (iii) only
if said Option is exercised prior to the expiration of the time period provided
for in the Plan following the date of his or her death.

(d) Cessation of Employment. The Option may not be exercised by the Optionee
except while he or she is an employee of the Company or a subsidiary, or, if he
or she shall cease to be an employee for any other reason other than death after
he or she has been continuously so employed, for at least one (1) year from the
Granting Date, he or she may, but only within the time period provided for in
the Plan next succeeding such cessation of employment, exercise his or her
option.

4. Manner of Exercise. The Option granted hereunder shall be exercised by
delivering to the Company from time to time within the time limits specified in
Paragraph 3 hereof a notice specifying the number of shares the Optionee then
desires to purchase (and with respect to which the Optionee has acquired the
right to purchase, as described in Paragraph 3(a) above), together with either;
(i) cash or other instrument acceptable to the Company for an amount equal to
the option price for such number of shares; or (ii) with the prior consent of
the Committee, and upon receipt of all regulatory approvals, certificate for
Common Stock of the Company, valued at the Fair Market Value (determined as
provided in the Plan) of such Common Stock on the date of exercise of this
option, as payment of all or any portion of the option price for such number of
shares; and (iii) such other instruments or agreements duly signed by the
Optionee as may be specified by the Company in order that the issuance of such
number of shares comply with applicable rules and regulations under the
Securities Act of 1933, as amended (the “Act”), any appropriate state securities
laws or any requirement of any national securities exchange or market system on
which such stock may be traded. As soon as practicable after any such exercise
of the Option in whole or in part by the Optionee, the Company will deliver to
the Optionee a certificate or electronic recording of any such shares acquired
by the Optionee through the exercise of his or her options.

5. Withholding. To the extent required by law the Company shall withhold any
taxes required to be withheld under any applicable Federal, state or other law
and transmit such withheld amounts to the appropriate taxing authority. The
Company may condition the transfer of stock after the exercise of the Option
upon the Optionee’s remittance to the Company of the amount of employment taxes
which are required to be withheld or, with the consent of the Committee, to
satisfy such withholding obligation by means of Share Withholding, as such term
is defined in the Plan.

 

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6. Notices. All notices, surrenders and other communications required or allowed
to be made or given in connection with the Option granted hereunder shall be in
writing, shall be effective when received, and shall be hand delivered or sent
by registered or certified mail (i) if to the Company, to CEC Entertainment,
Inc., 4441 West Airport Freeway, Irving, Texas 75062, or (ii) if to the
Optionee, to the Optionee at the address shown beneath his or her signature
hereto, or to such other address as to which may have notified the Company
pursuant to this section.

7. Binding Effect. This Agreement shall bind, and except as specifically
provided in the Plan and this Agreement, shall inure to the benefit of, the
respective heirs and legal representatives of the parties hereto.

8. Governing Law. This Agreement and the rights of all persons claiming
hereunder shall be construed and determined in accordance with the laws of the
State of Texas.

9. Multiple Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its
officer hereunto duly authorized, and the Optionee has hereunto set his or her
hand, effective as of the date and year first written above.

 

  CEC ENTERTAINMENT, INC.   By:       Name:       Title:    

 

ATTESTED TO:       , Secretary

 

      Optionee Signature   Printed Name:    

  Location Number:    

  Tax I.D. Number:    

  Address:  

4441 West Airport Freeway

Irving, Texas 75062

 

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